Record and brief — Jannotti v. United States
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APR 12
No. _
Besa ends
Supreme Court of the United States
October Term, 1981
HARRY P. JANNOTTI,
Petitioner
0.
UNITED STATES OF AMERICA,
Respondent
GEORGE X. SCHWARTZ,
Petitioner
v.
UNITED STATES OF AMERICA,
Respondent
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
. CLayton UNpercor.er, III
Of Counsel: OBERT N. pe Luca
Di_wortn, Paxson, KALISH 2600 The Fidelity Building
& KAUFFMAN Philadelphia, Pennsylvania 19109
Carot A. MEEHAN (215) 875-7000
2600 The Fidelity Building Attorneys for Petitioner
Philadelphia, Pennsylvania 19109 Harry P. Jannotti
Ricuarp A. SPRAGUE
Epwarp H. RusBENsTONE
Suite 400, Wellington Building
Of Counsel: 135 S. 19th Street
SPRAGUE & RUBENSTONE a 19103
Suite 400, Wellington Building 1-
135 S. 19th Street Attorneys for Petitioner
Philadelphia, Pennsylvania 19103 George X. Schwartz
International Printing Co., 711 So. SOth St. Phila., Pa. 19143 — Tel. (215) 727-8711
QUESTIONS PRESENTED
1. Whether the government's conduct of the ABSCAM
operation violated the most basic standards of due process
and fundamental fairness, reaching and exceeding that
degree of outrageousness which mandates dismissal of this
prosecution?
2. Whether, where the evidence of governmental in-
ducement is overwhelming, the government can meet its
burden to disprove entrapment when the only proof of
predisposition offered is the fact that the defendant com-
mitted the criminal act, which proof demonstrates neither
his pre-existing criminal inclination nor familiarity with
criminal techniques and procedures, and was manufac-
tured, in its entirety, by the government?
3. Whether, given the constitutional limitations in-
herent in Congress’ power to legislate under the commerce
clause, federal jurisdiction under the Hobbs Act can be
predicated upon wholly fictitious facts and circumstances
which could never have had, at any time, any actual or
_ potential effect on interstate commerce and which “facts,”
in any event, were formulated and injected into the trans-
action in question by the government?
4. Whether, under the Hobbs Act, criminal convic-
tions for extortion can be sustained absent proof of
“inducement” by the defendants charged?
(i)
TABLE OF CONTENTS
Page
GemmNNNS TUMMIITED onc cesses scccccccccsccssccccvccces i
TAGE GP AMUBTBTTED oo0o sc ccccccscccccccccccccscccosecs iii
SN BT ccc ccccccdcccceccctssendscccceseceses
III cin nc'nnd6060eecbes6oedectseacascenesbesecste
CONSTITUTIONAL AND STATUTORY PROvISIONS INVOLVED ......
STATEMENT OF THE CAGE 2... cece ccccccccccccccscccccess
REASONS FOR GRANTING THE WRIT .......-..-00000eeee eee 10
The Government’s Conduct of ABSCAM Violated the
Most Basic Standards of Due Process and Funda-
mental Fairness, Reaching and Exceeding That
Degree of Outrageousness Which Mandates Dis-
mafesal of Tiles Prosecution ........ccccceccsccees 10
Where the Evidence of Governmental Inducement Is
Overwhelming, the Government May Not Rely Upon
Evidence of “Ready Acquiescence” Manufactured by
It to Meet Its Burden, Nor Can a Court Sustain a
Conviction in an Entrapment Case on Proof of Com-
mission of the Criminal Act Alone ............... 17
The Third Circuit's Ruling on Hobbs Act Jurisdiction in
This Case Conflicts With the Rulings of Three Courts
of Appeals, Impacts on All Federal Criminal Legis-
lation Enacted Under the Commerce Clause, Misap-
plies Prior Holdings of This Court, and Is Erroneous
Under the Facts of This Case ................... 20
A Conviction for Extortion Under the Hobbs Act Absent
Proof of Inducement by a Defendant Should Not
Be Permitted, and Clarification of This Issue Is
ET bWhddddh00660 sens ccasdudacbesenceseses 26
TABLE OF AUTHORITIES
Cases: Page
Casey v. United States, 276 U. S. 413 (1928) .............. ll
Greene v. United States, 454 F. 2d 783 (9th Cir. 1971) ..... 11,13
Hampton v. United States, 425 U. S. 484 (1976) ........... ll
Olmstead v. United States, 277 U. S. 438 (1928) ............ ll
People v. Dioguardi, 8 N. Y. 2d 260, 203 N. Y. S. 2d 870, 168
Se OE gow ncccdusdsyucedcansseueccess 27
Perez v. United States, 402 U. S. 146 (1971) .............. 20, 21
Sherman v. United States, 356 U. S. 369 (1958) ............ ll
Sorrells v. United States, 287 U. S. 435 (1932) ............ 11,17
United States v. Adcock, 558 F’. 2d 397 (8th Cir.), cert.
es GO Oe Oe CD oi cnccckensasbesucvtacee 27
United States v. Addonizio, 451 F. 2d 49 (3d Cir.), cert.
Gee, GES TH, BH GE CIGD acc cccccccccsciccscccccs 27
United States v. Archer, 486 F. 2d 670 (2d Cir. 1973) ....11, 15, 24
United States v. Bocra, 623 F. 2d 281 (3rd Cir.), cert. denied,
i oo ce sence ceeeueseseenadseccee ll
United States v. Cerilli, 603 F. 2d 415 (3d Cir. 1979), cert.
denied, 444 U. S. 1043 (1980) .............. ccc eee 22
United States v. Duhon, 565 F. 2d 345 (5th Cir. ), cert. denied,
ee ee PE acd coe weaver ecabesucsusacass 28
United States v. Feola, 420 U. S. 671 (1975) ..... 20, 22, 23, 24, 25
United States v. French, 628 F. 2d 1069 (8th Cir.), cert.
denied, 101 S. Ct. 364 (1980) ..............cceeeeee. 26
United States v. Gerald, 624 F. 2d 1291 (5th Cir. 1980) ..... 28
United States v. Hathaway, 534 F. 2d 386 (lst Cir.), cert.
denied, 499 U. S. 810 (1976) .........ccccccccccccecs 27
United States v. Hedman, 630 F. 2d 1184 (7th Cir. 1980),
cert. denied, 450 U. S. 965 (1981) ................05. 27
United States v. Hyde, 448 F. 2d 815 (5th Cir. 1971), cert.
denied, 404 U. S. 1058 (1972) ......... cece cece eeees 27, 28
United States v. Johnson, 565 F. 2d 179 (1st Cir. 1977), cert.
Gre, GEG GG. BN CEG ones ccc ccvccccssccccces ll
(ii)
TABLE OF AUTHORITIES (Continued)
Cases (Continued): Page
United States v. Leja, 563 F. 2d 244 (6th Cir. 1977), cert.
denied, 434 U. S. 1074 (1978) ........ccccccccevcees ll
United States v. Phillips, 577 F. 2d 495 (9th Cir.), cert.
I, Ge Ge Gs Ge CPU occ cvccccvcsccsccesceces 21
United States v. Prairie, 572 F. 2d 1316 (9th Cir. 1978) ..... Il
United States v. Reifsteck, 535 F. 2d 1030 (8th Cir. 1976) ... 11
United States v. Rindone, 63] F. 2d 491 (7th Cir. 1980) .... 21
United States v. Russell, 459 F. 2d 671 (9th Cir. 1972), rev'd
i oD cieenesescendeccesennvesdsvecss ll
United States v. Spagnolo, 546 F. 2d 1117 (4th Cir. 1976)
(per curiam ), cert. denied, 433 U. S. 909 (1977) ....... 21, 22
United States v. Staszcuk, 517 F. 2d 53 (7th Cir.) (en banc),
cert. denied, 423 U. S. 837 (1975) .............. 21, 22, 25, 27
United States v. Twigg, 588 F. 2d 373 (3d Cir. 1978) ...... ll
United States v. Watson, 489 F. 2d 504 (3d Cir. 1973) ..... 17
United States v. West, 511 F. 2d 1083 (3d Cir. 1975) ...... ll
Williamson v. United States, 311 F. 2d 441 (5th Cir. 1962), on
appeal after remand, 340 F. 2d 612 (5th Cir.), cert.
I, Ge We CED occ ccdccccveccaseveciee 12
Constitution and Statutes:
United States Constitution, Amendment V ............ i, 2, 20, 25
United States Code, Title 18:
Re a ee 22
18 U. S. C. § 1951 (The “Hobbs Act”) ..... 2, 3, 8, 9, 20 et seq.
Be ae ee EE ED | Se cidecodccciccceod’ 3, 8,9, 14
ee eg Cs eke ied wabawues 3,15
ae SED Uceuiod 60 G5beendu64 se eneoneuew 4
United States Code, Title 25:
a i ci aven eens bees eceseeeosuées st 2
(iv)
No.
IN THE
Supreme Court of the United States
Ocroser TERM, 1981
HARRY P. JANNOTTI,
Petitioner
v.
UNITED STATES OF AMERICA,
Respondent
GEORGE X. SCHWARTZ,
Petitioner
0.
UNITED STATES OF AMERICA,
Respondent
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Petitioners above named respectfully pray that a writ
of certiorari issue to review the judgment and opinion of
the United States Court of Appeals for the Third Circuit,
sitting in banc, entered in this case on February 11, 1982.
(1)
2 Petition for a Writ of Certiorari
OPINIONS BELOW
The opinion of the United States Court of Appeals
for the Third Circuit, sitting in banc, reversing the opinion
of the United States District Court, is not yet reported. A
copy of this opinion is printed in the Appendix at A. 1.
The opinion of the United States District Court for
the Eastern District of Pennsylvania, which was reversed
by the appellate court, is reported at 501 F. Supp. 1182
(E. D. Pa. 1980). A copy of this opinion is printed in the
Appendix at A. 129.
The opinion of the United States District Court for
the Eastern District of Pennsylvania, dismissing the sub-
stantive Hobbs Act charges, is not reported. A copy of
this opinion is printed in the Appendix at A. 107.
JURISDICTION
The judgment of the United States Court of Appeals
for the Third Circuit, reprinted in the Appendix, at A. 181,
was entered on February 11, 1982. This Court’s jurisdic-
tion is invoked under 28 U. S. C. § 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
United States Constitution:
Amendment V:
No person shall . . . be deprived of life, liberty,
or property without due process of law; . . .
United States Code, Title 18:
§ 1951. Interference with commerce by threats or
violence (the “Hobbs Act” )
Petition for a Writ of Certiorari 3
(a) Whoever in any way or degree obstructs, delays,
or affects commerce or the movement of any article
or commodity in commerce, by robbery or extortion
or attempts or conspires so to do . . . shall be fined
not more than $10,000 or imprisoned not more than
twenty years, or both.
(b) As used in this section—
°° ° °
(2) The term “extortion” means the obtaining of
property from another, with his consent, induced
by wrongful use of actual or threatened force,
violence, or fear, or under color of official right.
(3) The term “commerce” means commerce
within the District of Columbia, or any Territory
or Possession of the United States; all commerce
between any point in a State, Territory, Posses-
sion, or the District of Columbia and any point
outside thereof; all commerce between points
within che same State through any place outside
such State; and all other commerce over which
the United States has jurisdiction.
§ 1962. Prohibited activities (Racketeer Influenced
and Corrupt Organizations Act: “RICO” )
(c) It shall be unlawful for any person employed
by or associated with any enterprise engaged in, or
the activities of which affect, interstate or foreign
commerce, to conduct or participate, directly or indi-
rectly, in the conduct of such enterprise’s affairs
through a pattern of racketeering activity or collection
of unlawful debt.
4 Petition for a Writ of Certiorari
(d) It shall be unlawful for any person to conspire
to violate any of the provisions of subsection (a),
(b), or (c) of this section.
STATEMENT OF THE CASE
ABSCAM was conceived in 1978 by F. B. I. agents
in New York along with a career swindler and convicted
felon, Melvin Weinberg. Originally, ABSCAM was de-
signed to recover stolen property, but it evolved into a
government-backed endeavor to bribe public officials,
thus changing the government's role from that of a tradi-
tionally passive buyer of stolen property to an aggressive
instigator, seeking out officials and offering bribes to them.
ABSCAM was characterized throughout by clever
strategies and substantial inducements—the “honeypot”
according to Weinberg—designed to attract potential tar-
gets of the scheme. Substantial legal fees, lucrative in-
vestment opportunities, and large amounts of money were
offered to the victims of the scheme, and the impression
of an Arab sheik with vast amounts of money to spend
freely was continually fostered by tie FY. B. I. Likewise,
the F. B. I. agents repeatedly and effectively employed
the concept of “the Arab mind” or “the Arab way of doing
business” ' to persuade their victims that they must accept
the money offered to them to convince the fictitious sheik
of their friendship.
The government also recruited and used “middle-
men” to assist in the scheme, among them Howard Criden,
a Philadelphia lawyer who brought both petitioners
Schwartz and Jannotti into the ABSCAM net. Criden, as
were various other middlemen, was compensated by
1. See the District Court’s discussion of the “Arab mind” tech-
nique and the manner in which it was employed, at A. 151-152.
Petition for a Writ of Certiorari 5
contingent fee based upon the number of officials he could
produce for the government. He also received continu-
ing promises of substantial, future legal fees and other
lucrative investment opportunities.
Criden was taught early in ABSCAM by Weinberg
and another middleman, Mayor Angelo Errichetti of Cam-
den, New Jersey, that the officials who were brought in to
meet the sheik and his “associates’"—the F. B. I. agents—
need only come on strong, emphasize their importance,
and that no official would be called upon to pertorm.
A. 152-153. Criden also intentionally deceived the F. B. I.
by having an associate in his law firm impersonate an
immigration officer to obtain a $50,000 fee. The ruse did
not work and the F. B. I. learned of the deception. Never-
theless, the F. B. I. continued to utilize Criden and to
accept without question his representations regarding the
honesty and reputations of public officials who were the
ultimate victims of ABSCAM.
The Philadelphia aspect of ABSCAM was authorized
by the F. B. I. only for a ten-day period, was the last major
operation conducted by the ABSCAM operatives, and was
designed to test the integrity of city officials.* No infiltra-
tion or discovery of ongoing criminal activity took place or
was intended by the government. Rather it created a
criminal enterprise and actively attempted to involve inno-
cent persons in its operations. The scenario employed by
the F. B. I. centered upon the sheik’s plan to construct a
fictitious $35 million hotel in Philadelphia, with its result-
ant, major impact on the city’s economy. But the rec-
ord is devoid of any evidence that payments of money to
2. The Philadelphia U. S. Attorney testified that his office
actively lobbied for an opportunity to conduct a Philadelphia
ABSCAM operation, attempted to devise strategems to justify
bringing ABSCAM to the city, and formulated a scenario which
would result in violations of federal law.
6 Petition for a Writ of Certiorari
any city official were either sought or required or that any
Philadelphia official would have to be dealt with in con-
nection with the proposed hotel project.
Following a series of telephone calls from Weinberg
to Criden, on January 18, 1980, Criden met with F. B. I.
Agent Michael Wald, who passed himself off as a rep-
resentative of the fictitious sheik.’ Wald pressed Criden
for introductions to various municipal officials. He spe-
cifically requested a meeting with petitioner Schwartz and
Councilman Louis C. Johanson, Criden’s law partner,
despite Criden’s protestations that their assistance was
unnecessary given the sheik’s prior relationship with two
Philadelphia congressmen. Wald then unilaterally raised
the issue of payments and agreed to pay Criden $10,000
for the production of Schwartz and Johanson. As of this
time, Criden had never met or had any prior dealings with
Schwartz.
Later that day, Johanson met with Wald. He agreed
to support the hotel project and accepted a $25,000 pay-
ment. At the end of the meeting, Wald gave Criden
$5,000 and promised him “5 for the next delivery.”
Johanson testified that, based on his earlier meeting with
Criden, he thought the payment was a retainer for lezal
services which his law firm would perform on the hotel
project. Johanson also testified that as the meeting pro-
gressed, he became aware that it “wasn’t kosher.” Later,
and because he thought he had been duped by Criden,
Johanson refused a request by Criden for an introduction
to petitioners, since he felt they were good men whom he
did not want to involve in improper activities.
On January 23, 1980, Schwartz met with Criden
and Wald.* During the meeting, Schwartz repeatedly
3. The meeting with Criden, as were the subsequent meetings
with petitioners, was videotaped by the government.
4. Criden had obtained an introduction to Schwartz through
a mutual friend, Philadelphia Common Pleas Court Judge Thomas
Petition for a Writ of Certiorari 7
pitched Philadelphia, told Wald that the “climate is good”
for a major construction project, and noted that any
problems arising in connection with a proper and legitimate
project could be overcome administratively. Schwartz
also advised Wald of his power and influence within City
Council and that he, Schwartz, had previously rendered
assistance to other developers of major construction proj-
ects in Philadelphia. Wald assured Schwartz that the
project was a legitimate one but emphasized that, if the
project was to be built in Philadelphia, he must have
Schwartz’ assurance that there would be no problems.
Schwartz repeatedly advised that no guarantees could be
given but that, as long as the project was legitimate, any
problems could be resolved.
Significantly, when Wald first mentioned payments,
Schwartz made it clear that money was not the motivating
factor behind his agreement to assist with the project.
Throughout the meeting, Schwartz discussed the available
financing opportunities and the best law firms to employ
in connection with the project. Near the end of the meet-
ing, Wald again told Schwartz that he must have Schwartz’
unequivocal assurance that everything could be taken care
of if he was to report to the sheik that the hotel project
could be placed in Philadelphia. Schwartz reiterated that
he “cannot give you a guarantee that there won’t be any
problems” but that so long as the project was legitimate,
administrative procedures in Philadelphia could assist in
resolving those problems. At the end of the meeting, a
payment of $30,000 was given to Schwartz. Wald then
4. (Cont'd)
Shiomos. Shiomos testified that Criden told him that Criden’s
clients wanted to hire Schwartz as a consultant and to pay Schwartz
for his advice and that he, Shiomos, told this to Schwartz. Judge
Shiomos testified that he saw nothing “improper or fishy” in this
proposal and so advised Schwartz. A. 159-60.
8 Petition for a Writ of Certiorari
gave Criden $5,000 for delivering Schwartz and urged
Criden to deliver petitioner Jannotti.’ Although, as with
Schwartz, Criden did not know Jannotti prior to the meet-
ing, Criden boasted on tape to Wald that he knew Jan-
notti well. The F. B. I. did not attempt to verify Criden’s
plainly false assertions of knowing Schwartz, and it did
nothing to verify his assertions concerning Jannotti.
On January 24, Criden produced Jannotti for the hid-
den cameras. During the Jannotti meeting, and following
an initial discussion of the hotel project, Jannotti was re-
peatedly told by the F. B. I. of the requirements of the
“Arab mind,” and that the sheik insisted upon making
friends and resolving problems before they arose. Wald
asserted that the “Arab mind” required that Jannotti accept
the payment of money to prove his friendship if the sheik
was to construct the hotel in Philadelphia.
Jannotti repeatedly expressed his interest in the
project, his feeling that the project would be a great bene-
fit to the city, and his support for the hotel because it was
a legitimate project. However, each time that Jannotti
showed reluctance to accept money, the F. B. I. agent in-
creased the intensity of his presentation until ultimately
Jannotti accepted a $10,000 payment. Once Jannotti
left, the F. B. I. agents, obviously frustrated because
of Jannotti’s demeanor and lack of understanding or inter-
est in the proffered payment, expressed their displeasure
to Criden.
Petitioners were indicted for conspiracy under 18
U. S. C. §§ 1951 (the “Hobbs Act”) and 1962 (the
“Racketeer Influenced Corrupt Organizations Act” or
“RICO” ) and also for attempts to violate the Hobbs Act.
The attempt charges were dismissed by the District Court
5. Also, during this meeting between Criden and Wald, Wald
pressed for introductions to other city officials with whom he could
“deal,” naming, among others, the mayor and the former mayor of
the city of Philadelphia and various councilmen.
Petition for a Writ of Certiorari 9
prior to trial, and the government did not appeal. A. 107
Petitioners were subsequently tried on the two conspiracy
counts. Following a siv day jury trial, petitioner Schwartz
was found guilty of both the RICO and Hobbs Act con-
spiracy charges. Petitioner Jannotti was found guilty of
the Hobbs Act conspiracy charge but was acquitted on
the RICO count.
During the trial, the government placed almost total
reliance on the video tapes. The government did not pre-
sent independent proof of any actual, potential or any
other effect on interstate commerce as a result of peti-
tioners’ conduct and, aside from its own agent, Criden,
presented no evidence of a “pattern” of racketeering.
Likewise, the government introduced no evidence that
petitioners sought, requested, solicited, demanded or
otherwise affirmatively expressed the need for any pay-
ment of money in exchange for official services. Finally,
the government introduced no extrinsic evidence of peti-
tioners’ predisposition and relied solely upon the events
of the meetings and strained inferences from other pe-
ripheral evidence to prove predisposition. Both prior to
trial and following the trial, the District Court held exten-
sive hearings on the due process issues.
After verdict, petitioners moved for judgments of
acquittal. By Memorandum and Order dated November
26, 1980, the District Court set aside the verdict in its
entirety, dismissed the Hobbs Act conspiracy counts for
lack of jurisdiction, and granted petitioners’ motions for
judgment of acquittal. A. 129.
The government appealed the District Court’s ruling
and, on February 11, 1982, the United States Court of
Appeals for the Third Circuit, sitting in banc, reversed the
District Court’s decision by a seven-to-two vote, A. 1,
and directed reinstatement of the jury verdict. The in-
stant petition to this Court followed.
10 Petition for a Writ of Certiorari
REASONS FOR GRANTING THE WRIT
With this, the first ABSCAM prosecution to reach this
Court, it is now time to confront directly and resolve the
critical issue raised by the government's ABSCAM opera-
tions: will our legal system permit federal investigative
and prosecutorial agencies to create crime, to target and
solicit their potential victims, to influence these victims by
the use of uncontrolled middlemen and by the tendering
of substantial inducements to them, and to script, manu-
facture, and mold the evidence which will be used to
prosecute and convict these victims? It is petitioners’
position that the creation of crime is an insidious and
immoral business and that the government has no place
in it. For all of the reasons set forth below, granting of
the writ requested is essential. The issues in this case, to
quote from Judge Aldisert’s incisive dissenting opinion
below, raise questions which involve “an extremely sensi-
tive intersection between morals and positive law, which
demands that the judiciary assume rather than shirk re-
sponsibility.” A. 79-80.
The Government's Conduct of ABSCAM Violated the
Most Basic Standards of Due Process and Funda-
mental Fairness, Reaching and Exceeding That
Degree of Outrageousness Which Mandates Dismissal
of This Prosecution.
Given the extraordinary impact which ABSCAM has
had on the national conscience, as well as the effect which
any final decision on the ABSCAM affair will have upon
the future conduct of law enforcement agencies in this
country, it is submitted that the controversy which has
swirled around ABSCAM must be definitively resolved.
Indeed, so important is the resolution of these issues that
they should not be left to piecemeal adjudication by the
courts of appeals.
Petition for a Writ of Certiorari 11
The District Court in this case applied the “demon-
strable level of outrageousness” standard set down in
Hampton v. United States, 425 U. S. 484, 495 n. 7 (1976)
(Powell, J., concurring), and held that the government's
conduct and activities in ABSCAM exceeded permissible
limits. Petitioners submit that a review of this record will
confirm that the District Court was correct.
Due process in the context of criminal proceedings
has received only limited treatment by this Court,° but
numerous courts of appeals have applied due process con-
cepts’ and in several instances, have reversed criminal
convictions on this very ground.* Every factor found
relevant to the due process analysis by every court of
appeals that has considered the issue is present here in the
extreme.
The government instigated, suggested, set in motion,
and “scripted” the entire ABSCAM scheme. ABSCAM
epitomizes extremely unfair governmental conduct at the
6. Sorrells v. United States, 287 U. S. 435, 459 (1932)
(Roberts, J., separate opinion); Sherman v. United States, 356
U. S. 369, 381 (1958) (Frankfurter, J., concurring); United States
v. Russell, 411 U. S. 423 (1973); Hampton v. United States, supra;
see Olmstead v. United States, 277 U. S. 438, 485 (1928) ( Brandeis,
J., dissenting ); Casey v. United States, 276 U. S. 413 (1928) (Bran-
deis, J., dissenting).
7. E.g., United States v. Bocra, 623 F. 2d 281 (3rd Cir.), cert.
denied, 449 U. S. 875 (1980); United States v. Prairie, 572 F. 2d
1316 (9th Cir. 1978); United States v. Johnson, 565 F. 2d 179 (1st
Cir. 1977), cert. denied, 434 U. S. 1075 (1978); United States v.
Leja, 563 F. 2d 244 (6th Cir. 1977), cert. denied, 434 U. S. 1074
(1978); United States v. Reifsteck, 535 F. 2d 1030 (8th Cir. 1976),
and see cases cited infra at footnote 8.
8. E.g., United States v. Twigg, 588 F. 2d 373 (3d Cir. 1978);
United States v. Archer, 486 F. 2d 670 (2d Cir. 1973); United States
v. Russell, 459 F. 2d 671 (9th Cir. 1972), rev'd 411 U. S. 423
(1973); Greene v. United States, 454 F. 2d 783 (9th Cir. 1971);
see United States v. West, 511 F. 2d 1083 (3d Cir. 1975).
12 Petition for a Writ of Certiorari
highest level. Governmental involvement in ABSCAM
was pervasive and extended over the entire period of the
scheme. The nature of that involvement was singularly
and unfairly designed to lure innocent persons into its
web. No evidence of ongoing criminal conduct by either
petitioner was present when ABSCAM was injected into
their lives, nor did any evidence exist of any prior or con-
tinuing criminal activities of this type in Philadelphia mu-
nicipal government at the time the ABSCAM operation
arrived.
Neither petitioner encouraged the government either
to initiate or expand the scheme; each responded only to
the government’s inducements and protestations of need.
No evidence of petitioners’ predisposition, aside from some
“puffing” in the course of the governmentally-scripted
meetings, could be presented by the prosecution during
trial. Extreme pressure was brought to bear on all per-
sons involve.! in the Philadelphia ABSCAM operation
through the offer of substantial sums of money, the use of
the “Arab mind” ruse, and the government's appeal to
petitioners’ civic duty through representations that, unless
money was accepted to evidence petitioners’ friendship
for the sheik, the hotel project would not be placed in
Philadelphia. The government's agents employed middle-
men who were paid on a contingent fee basis, a tactic
condemned by the Fifth Circuit in Williamson v. United
States, 311 F. 2d 441 (5th Cir. 1962), on appeal after
remand, 340 F. 2d 612 (5th Cir.), cert. denied, 381 U. S.
950 (1965), and they were totally unconcerned with the
methods and ploys used by these middlemen to convince
persons to participate in the meetings, despite their
knowledge of prior deception and unconscionable coaching
by these very same middlemen. Finally, the government
went to extraordinary lengths to create a climate of temp-
tation which itself preyed upon the weakness of the victims
of the scheme.
Petition for a Writ of Certiorari 13
The government's conduct throughout ABSCAM was
the antithesis of fair and effective law enforcement.
Neither the government nor Criden had any reason to sus-
pect either a propensity to engage in criminal conduct on
the part of either petitioner or the presence of any ongoing
criminal activity involving petitioners. Yet, the govern-
ment directed Criden to inject himself into the petitioners’
lives with the deliberate intent to lure them into criminal
activity and with a conscious design to corrupt them. Re-
gardless of petitioners’ state of mind at the time they were
approached by the government, no reason exists, on this
record, even to suggest that, absent the government's
instigation in this case, petitioners would not have lived the
rest of their lives as law-abiding public officials and re-
spected members of the community.
The Court of Appeals distorts the significance of the
various aspects of the government's activities in ABSCAM
by isolating them one from the other, and by failing to
recognize that all of these elements, taken together, plainly
demonstrate the outrageousness of the government's con-
duct. In Greene v. United States, supra, 454 F. 2d at 787,
the Ninth Circuit recognized that although
“taken individually, none of the factors which we
have pointed to as significant would necessarily re-
quire reversal of a conviction. In our view, it is the
combination which is important.” (Emphasis added ).
The totality of factors present here mandates a ruling in
petitioners’ favor.
Further, in its analysis of the due process question,
the Court of Appeals improperly mixes concepts of entrap-
ment and due process, failing to recognize the constitu-
tional underpinnings of the due process defense. For ex-
ample, although proof that the government had no reason
for approaching a victim may be irrelevant in the entrap-
14 Petition for a Writ of Certiorari
ment context, A. 64, it is and must be a factor in any due
process analysis. Similarly, although in the view of the
Court of Appeals the inducements offered to petitioners
by the government may not have been sufficient to sustain
an entrapment defense, see A. 62, these same inducements
may, when viewed in conjunction with the entire scope of
unfair governmental activity, be a substantial factor in
supporting a due process defense.
Even if one argues, as does the Third Circuit majority,
that the government may employ secretive tactics and de-
liberate strategems to ferret out dishonesty among public
officeholders or to detect illicit drug transactions, that fact
does not sanction the government's instigation, control, and
total orchestration of the very criminal activity which it
intends to prosecute. In every other case in which the due
process defense has been raised, governmental involvement
in criminal activity has been passive and the basic criminal
design has, in each instance, been conceived and carried
out in all material respects by the defendants themselves.
In none of those cases has governmental instigation of or
involvement in criminal conduct risen to the levels which
are present in the Philadelphia ABSCAM case.
Here, the government defined the nature of the
scheme in an attempt to create the jurisdictional fact—
interstate commerce—which would permit it to prosecute
this case in the federal courts. In the same manner, the
government, through its manipulation of its captive middle-
man, Criden, constructed a pattern of bribery which would
not have existed but for Criden’s presence throughout the
scheme.’ Further, the conduct and language of the gov-
9. The District Court found that the government, through the
involvement of its own “agent,” Criden, created, initiated, and in-
stigated the pattern of bribery “as well as cach bribe” upon which
the RICO charge is premised, solely to satisfy the requirements of
RICO and to permit the exercise of federal jurisdiction over fabri-
Petition for a Writ of Certiorari 15
ernment’s agents were deliberately ambiguous and mis-
leading. Indeed, a review of the record will demonstrate
that at no time did the government ever ask either peti-
tioner whether the payment of bribes was necessary.
Moreover, at no point did the government seek to elicit
petitioners’ understanding of the purpose of the meetings.
One must conclude that the agents feared that an explicit
approach would have resulted in the flight of their victims.
Finally, a review of the Circuit Court’s opinion reveals
an extraordinary misconception of the role of the judiciary
in our society. In the view of a majority of the Third
Circuit, it is not the judiciary’s function to determine the
constitutional limitations under which our law enforcement
agencies are to operate. According to Judge Sloviter:
“... the conduct of agents of the executive branch
who must protect the public from crime is more ap-
propriately considered through the political process
where divergent views can be expressed in the ballot
box.” A. 66.
The opinion of the Court of Appeals manifests a total
abnegation of the judiciary’s obligation to define and en-
force the rights of citizens under the Constitution. As
Judge Aldisert recognizes in his dissent:
[T]he philosophical difference that divides this
court depends upon a judge’s unspoken notions about
the role of the courts. If he or she views the role of
9. (Cont'd. )
cated state bribery charges. Reasoning from United States v.
Archer, supra, Judge Fullam held that absent the government's in-
jection of these elements into the scheme, no proof of a pattern of
racketeering activity under 18 U. S. C. § 1962(c) could be shown,
thereby requiring dismissal of the charges on the ground of manu-
factured jurisdiction. A. 175. The Court of Appeals never ad-
dressed this issue.
16 Petition for a Writ of Certiorari
the court as a passive one, he or she will be willing to
delegate the responsibility for unpopular issues to the
jury and not care greatly what the result may be. If
he or she views the court as an instrument of society
designed to reflect in its decisions the highest values
of the American legal tradition, he or she will be more
likely to risk public disapproval and to measure an
unpopular cause against the highest ideals and aspira-
tions of the time.
“The rights conferred upon our society by judges
of the Third Article emanated from cases in which
the defendants were unpopular and generally re-
garded as transgressors—Dollree Mapp, Danny Esco-
bedo, and Ernesto Miranda quickly come to mind.
In each case, a court, not a jury, drew the line of
demarcation between permissible and impermissible
police conduct to insure that enforcers of society’s
laws would not violate established moral frontiers
while exercising their stewardship; it was federal
judges, unmindful of editorials and broadcast plaudits,
who chose to stand tail and unbending.” A. 80.
(Footnote omitted ).
If a national benchmark defining limits on law en-
forcement activity of this type is not established, no citizen
is secure from the clandestine imposition of morality tests
conceived and administered by the federal bureaucracy
for purposes ranging from legitimate law enforcement to
chilling political intimidation.
Petition for a Writ of Certiorari 17
Where the Evidence of Governmental Inducement Is
Overwhelming, the Government May Not Rely Upon
Evidence of “Ready Acquiescence” Manufactured by
It to Meet Its Burden, Nor Can a Court Sustain a
Conviction in an Entrapment Case on Proof of Com-
mission of the Criminal Act Alone.
Although recognizing that under the law of entrap-
ment it is the government’s burden to prove predisposition
beyond a reasonable doubt, the Third Circuit proceeds to
ignore this standard of proof, to impose upon a criminal
defendant the obligation to prove lack of predisposition,
and to permit the verdict below to stand on evidence of
the commission of crime alone. If the Court of Appeals’
ruling is not reversed, the entrapment defense will have
been obliterated.
Predisposition involves a difficult inquiry into the
defendant’s subjective state of mind. “[T]he controlling
question [is] whether the defendant is a person otherwise
innocent whom the Government is seeking to punish for
an alleged offense which is the product of the creative
activity of its own officials.” Sorrells v. United States, 287
U. S. 435, 451 (1932). Subsumed within any discussion
of entrapment is the complex, intertwined relationship
between inducement and predisposition. As the Third
Circuit itself recognized in United States v. Watson, 489
F. 2d 504 (3d Cir. 1973):
“[T]he stronger the inducement, the more likely that
any resulting criminal conduct of the defendant was
due to the inducement rather than to the defendant's
own predisposition.” Id. at 511.
The extraordinary degree of government inducement
in this case has already been reviewed. Given evidence
of these overwhelming inducements, the government's
evidentiary burden to prove predisposition was substantial.
18 Petition for a Writ of Certiorari
But the majority of the appellate court abjures any neces-
sity to conduct a review of the entire record, despite its
profession of the appropriateness of such a procedure.
A. 41-42. Instead, as Judge Aldisert points out, it satisfies
itself with a rebuttal of the items relied upon by the Dis-
trict Court in entering judgments of acquittal. A. 93. In
so doing, the court again relieves the government of its
obligation to prove predisposition by good and sufficient
evidence and effectively shifts the burden of disproof onto
the petitioners. Petitioners submit that a review of the
record will plainly demonstrate that not a scintilla of evi-
dence exists to establish the requisite predisposition, let
alone to counterbalance the weight which must be ac-
corded to the uncontradicted proof of massive govern-
ment inducement.
Second, although appreciating that predisposition has
been historically proven by, for example, proof of a de-
fendant’s prior convictions, his participation in similar
transactions or proof of bad character, the Court of Ap-
peals majority makes the startling observation that since
“[s]uch evidence would be extremely difficult to produce
in the case of acceptance of a bribe by a public official .. . .
the very acceptance of a bribe by a public official may be
evidence of a predisposition to do so when the opportunity
is presented.” A. 53-54.
Again, the majority of the court below states, in the
most blatant terms, that proof of the criminal act, a fact
which must be admitted of necessity by a criminal de-
fendant if he is to be permitted to argue entrapment, is
enough when it is a public official who is in the dock. No
basis for the application of such a double standard exists
in our law.
Further, even if one ignores the broad concept set
down by the Court of Appeals that proof of the crime of
extortion is sufficient to defeat the entrapment defense and
Petition for a Writ of Certiorari 19
accepts that court’s abstract proposition that the demeanor
of the petitioners during the commission of the criminal
act is sufficient proof upon which to premise a finding of
predisposition, attention must be directed to the nature of
that proof which was presented at trial.
In this case, the government created the scheme, sent
out its agent, Criden, to recruit the victims of the scheme,
enticed the petitioners to attend staged meetings, orches-
trated and scripted every aspect of those meetings, and
controlled the flow of conversation to the extent that the
petitioners’ statements were always made in response to
continuously monitored specific inquiries of the govern-
ment. The conduct and conversation of the government's
agents at the meetings were admittedly designed for the
sole purpose of obtaining evidence to be used in a future
proceeding. Nevertheless, it is this very evidence and
only this cvidence—this demeanor of petitioners at the
meetings—which the government now contends is suff-
cient to satisfy its burden of proof of predisposition.
No logic exists which would justify a finding that the
government may mold and manufacture the “ready re-
sponse” evidence and then would permit reliance upon
this evidence as the sole proof of predisposition. In no
case in which proof of government inducement was as
overwhelming as this case has any court permitted a con-
viction to stand on the flimsy “ready acquiescence” evi-
dence presented here. Although in some situations a
defendant’s ready acquiescence to the government's sug-
gestions may be enough to justify a finding of predisposi-
tion, here neither petitioner said or did anything tending
to establish pre-existing criminal inclinations, or exhibited
such familiarity with criminal techniques and procedures
as to demonstrate previous experience with similar criminal
activity. In short, there was no evidence to show that
when the government’s overtures first came to the atten-
20 Petition for a Writ of Certiorari
tion of Schwartz and Jannotti they were already predis-
posed to accepting bribes.
At bottom, it is clear that the court’s rejection of the
entrapment defense rests upon the simplistic notion that all
petitioners had to do when offered the money was to say
“No thanks.” A. 58. Such an approach to the difficult
jurisprudential problem raised by this case is wholly un-
acceptable. Peeling away the veneer of language in the
court’s opinion, one finds only the proposition that if
petitioners are to be punished for their immorality, the
defense of entrapment must be seriously compromised or,
indeed, eradicated. Review by this Court of the critical
entrapment issues raised by this case is essential.
The Third Circuit’s Ruling on Hobbs Act Jurisdiction in
This Case Conflicts With the Rulings of Three Courts
of Appeals, Impacts on All Federal Criminal Legis-
lation Enacted Under the Commerce Clause, Mis-
applies Prior Holdings of This Court, and Is Erroneous
Under the Facts of This Case.
The interstate commerce requirement in the Hobbs
Act, 18 U. S. C. § 1951, is a jurisdictional prerequisite to
any prosecution under that Act. As this Court held in
United States v. Feola, 420 U. S. 671, 695 (1975), in an
analogous circumstance, “[t]he jurisdictional requirement
is satisfied by the existence of facts tying the proscribed
conduct to the area of federal concern delineated by the
statute.” (Emphasis added). In its decision below, the
Court of Appeals completely disregards this fundamental
concept, establishes a standard of proof which is in direct
conflict with the standards employed hy the Fourth, Sev-
enth, and Ninth Circuits, sustains a conviction tor Hobbs
Act conspiracy where no jurisdictional fact was or could
have been proven, misinterprets this Court’s prior deci-
sions in Feola and Perez v. United States, 402 U. S. 146
Petition for a Writ of Certiorari 21
(1971), and demonstrates a basic misunderstanding of
the jurisdictional limitations inherent in all federal legis-
lation. For these reasons and because, as the Court of
Appeals does recognize, a determination, in the Hobbs
Act context, as to the extent of Congress’ power under the
commerce clause “will have ramifications for all federal
criminal statutes enacted under Congress’ commerce clause
power,” A. 26, review of the Hobbs Act issues raised herein
is imperative.
First, in United States v. Staszcuk, 517 F. 2d 53 (7th
Cir.) (en banc), cert. denied, 423 U. S. 837 (1975),
Judge, now Justice, Stevens addressed the interstate com-
merce issue raised by the Hobbs Act, and held:
“[T]he statutory language [of the Hobbs Act]. . .
requires the prosecutor to prove some connection with
interstate commerce in every case. We hold, how-
ever, that the commerce element of a Hobbs Act vio-
lation—the federal jurisdictional fact—may be satis-
fied even if the record demonstrates that the extortion
had no actual effect on commerce. . . . [J Jurisdiction
in the particular case is satisfied by showing a realis-
tic probability that an extortionate transaction will
have some effect on interstate commerce.
“The jurisdictional inquiry must, of course, focus
on the situation at the time of the offense.” Id. at
59-60. (Emphasis added) (Footnotes omitted).
Since 1975, the “realistic probability” test enunciated in
Staszcuk has continued to be the law in the Seventh Cir-
cuit and has been adopted and uniformly applied by the
Fourth and Ninth Circuits.”
10. E.g., United States v. Rindone, 631 F. 2d 491, 493 (7th Cir.
1980); United States v. Phillips, 577 F. 2d 495, 501 (9th Cir.), cert.
denied, 439 U. S. 831 (1978); United States v. Spagnolo, 546 F. 2d
1117, 1119 (4th Cir. 1976) (per curiam), cert. denied, 433 U. S.
22 Petition for a Writ of Certiorari
which the ABSCAM operation was premised was wholly
fictitious. Accordingly, the government could not and
did not prove at trial that, had the scheme been carried
out, commerce would have been affected."’ Likewise, since
the government, through its agents, never had any inten-
tion to implement the scheme, there never existed any pos-
sibility that the charged conspiracy would ever have any
effect upon interstate commerce. Despite these undis-
puted facts, the Third Circuit held that where a defend-
ant’s conduct constitutes “a sufficient threat to interstate
>»
commerce so as to implicate an ‘area of federal concern’,
federal jurisdiction is established. Thus, in direct conflict
with Staszcuk, the Third Circuit has wrongly substituted a
wholly subjective test, which would rest federal jurisdiction
upon hypothetical, imaginary or non-existent effects on
commerce.
Under the rationale of Feola, jurisdiction must be
predicated upon facts. In Feola, the jurisdictional nexus
under 18 U. S. C. § 111 is satisfied by the existence of a
fact, the presence of a federal officer, just as jurisdiction
under the Hobbs Act is based upon the existence of a
fact—an effect on interstate commerce. If A and B con-
spire to assault X and X turns out to be a federal officer,
the federal jurisdictional fact, and in turn federal jurisdic-
10. (Cont'd. )
909 (1977). Numerous other Courts of Appeals have referenced
the Staszcuk formulation in passing on Hobbs Act jurisdiction is-
sues, including the Third Circuit itself. E.g., United States v.
Cerilli, 603 F. 2d 415, 424 (3d Cir. 1979), cert. denied, 444 U. S.
1043 (1980).
1l. It is undisputed that no evidence, of any nature, was
introduced at trial by the government to show that the alleged con-
spiracy would have had any effect, actual or potential, on com-
merce if performed. A. 130.
Petition for a Writ of Certiorari 23
tion, is present. However, if A and B conspire to assault
X who they mistakenly believe to be a federal officer, the
federal jurisdictional fact is not present. Likewise, if a
federal agent tells A and B that X, a federal officer, will
be arriving to arrest them, and A and B agree to assault
X upon his arrival, but X is a creation of the federal agent's
imagination, just as was the hotel project in ABSCAM,
there can be no federal jurisdiction.
Federal jurisdiction is not predicated solely upon the
state of mind of the defendants. Fictions cannot replace
jurisdictional facts. In this case, measured by the facts,
no effect on commerce could ever take place.
Second, permeating every aspect of this case is the
uncontroverted fact that the federal government insti-
gated, scripted, and implemented ABSCAM. The federal
agents thus unilaterally fashioned a scheme which they
hoped would satisfy jurisdictional requirements. In each
case relied upon by the Court of Appeals, however, the
nature and extent of the conspiracy—the substance of the
criminal design—was formulated by the defendants
themselves.”
If the focus of the jurisdictional inquiry is upon
the conspiratorial agreement, see United States v. Feola,
supra, 420 U. S. at 695-96, it is both illogical and patently
unfair to sanction governmental manipulation of that
agreement solely to create federal jurisdiction. If the pur-
pose of the federal conspiracy laws is to provide federal
law enforcement officials with the tools necessary to com-
bat criminal conduct in “areas of federal concern,” it is
likewise illogical to contend that these same officials may
unilaterally create an “area of federal concern” in any
given case so that they may prosecute it.
12. See cases cited in the opinion of the Court of Appeals at
A. 28-31.
24 Petition for a Writ of Certiorari
Whether one accepts Judge Aldisert’s formulation that
“A purely hypothetical effect, a fairy tale conjured by the
FBI . . . is not ‘a sufficient threat to [commerce] so as to
give rise to federal jurisdiction, ” or one employs Judge
Friendly’s “manufactured jurisdiction” approach, United
States v. Archer, supra, 486 F. 2d at 682, the reality
is that no real, actual impact on commerce could have
ever occurred in this case and but for the government's
creation and injection of an interstate element into the
scheme, the federal courts would be without jurisdiction
to prosecute petitioners under the Hobbs Act. This case,
even more than Archer, epitomizes the concept of “manu-
factured federai jurisdiction.” “
Third, not only does the opinion of the Court of Ap-
peals demonstrate a complete misunderstanding of Feola,
see 420 U. S. at 695-96,"* which clearly states that a federal
officer must be the subject of an agreement to assault if
federal jurisdiction is to be present, but it also reflects a
fundamental misperception of and a lack of respect for
the essential nature of federal criminal jurisdiction. As
Judge Aldisert recognizes:
13. In its Opinion, the District Court stated:
“Moreover, to permit this kind of artificial federalization would
effectively remove virtually all of the limitations upon the
criminal jurisdiction of federal courts, and would be utterly
contrary to accepted notions of federalism.” A. 153-54 (Em-
phasis added).
14. In her Opinion, Judge Sloviter remarks:
“In holding [in Feola] that there was a ‘sufficient threat’
to an ‘area of federal concern’ to meet the jurisdictional re-
quirements as long as a federal officer was in fact the target of
the planned attack, 420 U. S. at 695, the Court did not preclude
the existence of federal jurisdiction where the intended victim
is believed to be a federal officer, but in fact is not.” A. 32.
(Emphasis added).
Petition for a Writ of Certiorari ; 25
“The majority interweaves its jurisdictional argument
with the argument that factual impossibility of com-
pleting a substantive offense does not bar a conviction
of conspiracy. They confuse proof of the crime of
conspiracy with the jurisdictional power to punish
the crime. The presence of subject matter jurisdic-
tion is a discrete and primary issue in each case pre-
sented to a federal court, unlike a state court. The
effect on commerce is both jurisdictional and substan-
tive in a Hobbs Act prosecution, but the two inquiries
are separate and distinct. See, e.g., Feola, 420 U. S.
at 694-96.” A.101. (Emphasis added).
Not only are the two inquiries “separate and distinct,” but
also the standards by which they are determined differ.
Respecting proof of the substantive offense, the subjective
criminal intent of an alleged Hobbs Act defendant is cru-
cial; respecting proof of Hobbs Act jurisdiction, however,
the subjective criminal intent of a Hobbs Act defendant
is irrelevant. The intent of the Hobbs Act defendant can
neither create nor negate the jurisdictional fact. In
Staszcuk, Judge Stevens understood this distinction and
formulated a test which respected it. Judge Sloviter, in
her opinion for the court below, paid lip service to the
limitations inherent in the Constitution’s grant of power
to Congress to legislate under the commerce clause and
established a test which shifts the focus of the jurisdic-
tional inquiry away from the “existence of [real] facts” and
to the subjective intent of the actor. As a result, the ob-
jective “realistic probability” test established by Staszcuk
has been disembowled by the Third Circuit and the re-
quirement in Feola that jurisdiction be predicated on fact
has been eliminated.
Finally, the Court of Appeals faults the petitioners
for failing te present any “policy reason” for it to accept
26 Petition for a Writ of Certiorari
“their restrictive view” of the jurisdictional reach of the
Hobbs Act. A. 32. But the policy is clear. The federal
courts are a creation of the Constitution and of Acts of
Congress, and, as such, they are courts of limited jurisdic-
tion. Jurisdiction under the Hobbs Act is predicated on
the commerce clause. Interference with commerce must
be proven before the federal courts may prosecute a viola-
tion of the Hobbs Act. Absent actual interference with
commerce or clear proof that an actual impact on com-
merce would have resulted from a criminal defendant's
actions, the federal courts cannot hear the case. It is peti-
tioners’ position that the Court of Appeals, by its ruling,
has abolished all jurisdictional limitations which hereto-
fore existed under the Hobbs Act and has constructed a
standard “which in practicality would extend federal juris-
diction over just about any robbery or extortion.” United
States v. French, 628 F. 2d 1069, 1077 (8th Cir.), cert.
denied, 101 S. Ct. 364 (1980).
A Conviction for Extortion Under the Hobbs Act Absent
Proof of Inductment by a Defendant Should Not Be
Permitted, and Clarification of This Issue Is Essential.
A plain reading of the definition of “extortion” in the
Hobbs Act shows that proof of inducement is necessary
to convict. The District Court held that the absence of
proof of any express or implied demand or request for
payment by petitioners requires dismissal of the Hobbs
Act charges. A. 110. The Court of Appeals reversed,
asserting that the law is clear throughout the circuits that
proof of inducement by a public official acting “under
color of official right” is unnecessary. A. 33. Petitioners
submit that both the decision of the Court of Appeals and
its rationale are incorrect.
The First, Third, and Eighth Circuits have each ap-
proved jury instructions which require a specific finding
Petition for a Writ of Certiorari 27
of inducement.” In fact, except for Staszcuk, where
insufficient detail is provided to determine whether af-
firmative action was taken by the defendant, and United
States v. Hedman, 630 F. 2d 1184 (7th Cir. 1980), cert.
denied, 450 U. S. 965 (1981), which does nothing more
than cite, as “settled law,” the very cases which either
include evidence of inducement or approve a charge on
inducement, there is no decision under the Hobbs Act
involving a public official which sustains an extortion con-
viction absent evidence of inducements, or of “initiative
and purpose,” United States v. Hyde, 448 F. 2d 815, 833
(5th Cir. 1971) (Wisdom, J.), cert. denied, 404 U. S. 1058
(1972), on the part of the official.’®
In this case, it is clear that neither of the petitioners
nor anyone acting on their behalf, at any time, requested
or demanded money in connection with the proposed con-
struction of the hotel in Philadelphia or in exchange for
petitioners’ use of their official positions. Rather, the evi-
dence is clear that petitioners were, at most, the passive
recipients of money and would have supported the pro-
posed project whether or not any money was paid to them.
In those cases decided under the Hobbs Act in which
public officials were not defendants, the law has long
been clear that, in the absence of proof that defendants
induced or intended to induce payment, the mere ac-
ceptance of a bribe does not constitute extortion or violate
15. See United States v. Hathaway, 534 F. 2d 386 (Ist Cir.),
cert. denied, 429 U. S. 819 (1976); United States v. Addonizio, 451
F. 2d 49, 59 (3d Cir.), cert. denied, 405 U. S. 936 (1972); United
States v. Adcock, 558 F. 2d 397 (8th Cir.), cert. denied, 434 U. S.
921 (1977).
16. “In other words, while the essence of bribery is voluntari-
ness, the essence of extortion is duress.” United States v. Addo-
nizio, supra, 451 F. 2d at 72, citing People v. Dioguardi, 8 N. Y. 2d
260, 203 N. Y. S. 2d 870, 168 N. E. 2d 683 (19680).
28 Petition for a Writ of Certiorari
the Hobbs Act. E.g., United States v. Gerald, 624 F. 2d
1291 (Sth Cir. 1980), United States v. Duhon, 565 F. 2d
345 (5th Cir.), cert. denied, 435 U. S. 952 (1978), United
States v. Hyde, supra." And, as noted above, given the
requirement of inducement even in official corruption
cases and the fact that no case involving official corruption
has ever resulted in conviction of the defendant absent
proof of a request or demand, the Court of Appeals’ read-
ing of the Hobbs Act statute and the conclusion which it
reached are clearly incorrect. Clarification of this trouble-
some issue is plainly warranted.
17. Indeed, no rational argument can be made to support di-
vergent approaches to the Hobbs Act. As the court stated in Hyde,
“[t]he distinction from bribery is therefore the initiative and purpose
on the part of the [defendant] and the fear and lack of voluntari-
ness on the part of the victim.” Id. at 833.
Petition for a Writ of Certiorari 29
CONCLUSION
For the foregoing reasons, a writ of certiorari should
issue to the Court of Appeals for the Third Circuit so that
this Honorable Court may review and correct the decision
below.
Respectfully submitted,
Of Counsel:
Di_wortH, Paxson, KALIsH
& KAUFFMAN
Caro. A. MEEHAN
2600 The Fidelity Bldg.
Philadelphia, PA 19109
Of Counsel:
SPRAGUE & RUBENSTONE
Suite 400, Wellington Bldg.
135 South 19th Street
Philadelphia, PA 19103
J. CLayton UNDERCOFLER, III
Rosert N. pE Luca
2600 The Fidelity Building
Philadelphia, PA 19109
(215) 875-7000
Attorneys for Petitioner
Harry P. Jannotti
RICHARD A. SPRAGUE
Epwarp H. RUBENSTONE
Suite 400, Wellington Bldg.
135 South 19th Street
Philadelphia, PA 19103
(215) 561-7681
Attorneys for Petitioner
George X. Schwartz
XIpUaddly
81-1899
Supreme Court, U.S.
FiLED
APR 12 1982
bisintdiiciees L. STEVAS
Supreme Court of the United States
October Term, 1981
HARRY P. JANNOTTI,
Petitioner
UNITED STATES OF AMERICA,
Respondent
GEORGE X. SCHWARTZ,
Petitioner
UNITED STATES OF AMERICA,
Respondent
JOINT APPENDIX OF PETITIONERS
JANNOTTI AND SCHWARTZ
. Ciayton UNpercor.enr, III
opert N. pe Luca
2600 The Fidelity Building
Philadelphia, Pennsylvania 19109
(215) 875-7000
Attorneys for Petitioner
Harry P. Jannotti
Ricuarp A. SPRAGUE
Epwarp H. RuBENSTONE
Suite 400, Wellington Building
135 S. 19th Street
Philadelphia, Pennsylvania 19103
(215) 561-7681
Attorneys for Petitioner
George X. Schwartz
international Printing Co., 711 So. S0th St. Phila., Pa. 19143 — Tel. (215) 727-8711
TABLE OF CONTENTS OF JOINT APPENDIX
Page
Opinion of the United States Court of Appeals for the Third
Circuit Entered February 11, 1982 ................... Al
Memorandum and Order of the United States District Court
for the Eastern District of Pennsylvania Entered August
el ide de eee ded eee ekneiane A107
Memorandum and Order of the United States District Court
for the Eastern District of Pennsylvania Entered Nevem-
I tian bece eee eecep ben eemetaeenentesies Al29
Order of the United States Court of Appeals for the Third
Circuit Entered August 26, 1981 ...................-. A179
Judgment of the United States Court of Appeals for the
Third Circuit Entered February 11, 1982 ............. A181
Al
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 81-1020 and 81-1021
UNITED STATES OF AMERICA
Appellant in No. 81-1020
v.
JANNOTTI, HARRY P.
(D.C. Crim. No. 80-00166-02)
UNITED STATES OF AMERICA,
Appellant in No. 81-1021
v.
SCHWARTZ, GEORGE X.
(D.C. Crim. No. 80-00166-04)
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
Argued June 10, 1981
Before: ALDISERT, WEIS, and SLOVITER, Circuit Judges
Reargued In Banc November 23, 1981
Before: SEITZ, Chief Judge,
ALDISERT, ADAMS, GIBBONS, HUNTER, WEIS,
GARTH, HIGGINBOTHAM and SLOVITER, Circuit Judges
(Opinion filed February 11, 1982)
A2
Peter F. Vaira
United States Attorney
Walter S. Batty, Jr.
Assistant United States Attorney
Chief, Appellate Division
Joseph M. Fioravanti (Argued)
Assistant United States Attorney
James J. Rohn
Assistant United States Attorney
Room 3310 U. S. Courthouse
601 Market Street
Philadelphia, Pa. 19106
Paul Shechtman
Criminal Division
Department of Justice
Washington, D.C. 20530
COUNSEL FOR APPELLANT
J. Clayton Undercofler, III, Esq.
Robert N. deLuca, Esq. (Argued)
Carol A. Meehan, Esq.
2600 The Fidelity Building
Philadelphia, Pa.
Of Counsel:
Dilworth, Paxson, Kalish & Levy
COUNSEL FOR APPELLEE
HARRY P. JANNOTTI
Richard A. Sprague, Esq. (Argued)
Edward H. Rubenstone, Esq.
Sprague, Goldberg & Rubenstone
135 South 19th Street
Philadelphia, Pa. 19103
COUNSEL FOR APPELLEE
GEORGE X. SCHWARTZ
A3
OPINION OF THE COURT
SLOVITER, Circuit Judge.
On September 16, 1980, after a six-day trial, a jury
found defendants Harry P. Jannotti and George X.
Schwartz guilty of conspiring to obstruct interstate com-
merce, in violation of the Hobbs Act, 18 U.S.C.
§1951(a), and found Schwartz guilty of conspiracy in
violation of the Racketeer Influenced and Corrupt Or-
ganizations Act, 18 U.S.C. §1962(d). At the time of the
events charged in the indictment, Schwartz was presi-
dent of the Philadelphia City Council and Jannotti was
the Council’s majority leader. Following the entry of the
guilty verdicts, defendants renewed their requests for
judgments of acquittal and dismissal of the indictment,
on which the trial court had previously reserved deci-
sion. On November 26, 1980, the district court entered
an order setting aside the verdict of the jury in its entire-
ty, dismissing Count III of the indictment (the Hobbs
Act count) for lack of jurisdiction, and granting the mo-
tions of defendants for judgment of acquittal. The Gov-
ernment appeals. '
In his opinion accompanying the order, the trial
judge gave four reasons for entry of the judgment of ac-
quittal and dismissal of Count III of the indictment.
United States v. Jannotti, 501 F. Supp. 1182 (E.D. Pa.
1980). He concluded:
1. The government suggests that we have jurisdiction under
28 U.S.C. §1291. That section does not create appellate jurisdiction
over appeals by the United States in criminal cases. DiBella v. Unit-
ed States, 369 U.S. 121, 130 (1962); Government of the Virgin Is-
lands v. Hamilton, 475 F.2d 529 (3d Cir. 1973). However. we have
jurisdiction over these appeals pursuant to the Criminal Appeals
Act, 18 U.S.C. §3731. See United States v. Wilson. 420 U.S. 332
(1975); United States v. Schoenhut, 576 F.2d 1010. 1018 & n.7 (3d
Cir.), cert. denied, 439 U.S. 964 (1978).
A4
1. The evidence at trial did not establish the actual
or potential impact upon interstate commerce necessary
to sustain federal jurisdiction under the Hobbs Act;
2. The evidence at trial established entrapment as a
matter of law;
3. Governmental overreaching amounted to a viola-
tion of due process of law;
4. The circumstances relied upon to establish fed-
eral jurisdiction were artificially created. Id. at 1205.
Our review of the record and applicable law con-
vinces us that in reaching these conclusions the district
court erred in its legal analysis and usurped the function
of the jury to decide contested issues of fact. We reverse
the district court’s order and direct reinstatement of the
jury’s verdict.
I.
SUMMARY OF EVIDENCE
An understanding and appreciation of the evidence
presented to the jury is essential to consideration of the
issues facing us on this appeal. We have therefore un-
dertaken an exposition of some of the highlights of that
evidence. The government operation, which has come to
be known as ABSCAM, began some time in 1978. The
basic nature of the plan was that F.B.1. agents posed as
employees of Abdul Enterprises, a fictional multi-
national corporation whose principal, a fictional Arab
Sheik, Yassir Habib of the Arab nation of Abu Dhabi,
was represented as interested in investing large
amounts of money in this country and in emigrating
here. According to the government, the plan was “con-
ceived to create opportunities for illicit conduct by public
officials predisposed to political corruption.” Brief for Ap-
pellant at 6. From the very beginning the government
utilized the services of Melvin Weinberg, accurately
characterized by the district court as a “career swindler,”
AS
501 F. Supp. at 1193,” who, with F.B.]. agents, “spread
the word” that the Sheik was interested in meeting pub-
lic officials who could facilitate his planned investments.
This basic plan evolved into various subparts, each
with its own cast of participants, which were ultimately
the subject of a series of indictments returned by grand
juries sitting in various federal districts of the country.
Thereafter, a number of local and federal public officials
were tried on offenses arising out of their participation.
We focus on the facts material to the prosecution of
Jannotti and Schwartz in the Eastern District of
Pennsylvania.*
The Philadelphia phase began on January 11, 1980
when Weinberg called Howard Criden, a Philadelphia
attorney, and told him that the Sheik was “looking to
build a hotel” in Philadelphia. Criden, who had previous-
ly received money from the F.B.I. agents for arranging
introductions to congressmen in connection with an-
other phase of the ABSCAM operation,’ was told that
2. Weinberg was convicted of mail fraud and wire fraud in
1977. At the intercession of the government, he was sentenced to
three years probation in return for his agreement to help in the
ABSCAM investigation. He was paid $3,000 a month by the F.B.1.
as of the time of the trial, had received a total of approximately
$140,000 up to that time, and had also received other fringe
benefits.
3. The trials of two other defendants, Louis C. Johanson, a
member of Philadelphia City Council, and Howard L. Criden, a
Philadelphia attorney, who were indicted along with Schwartz and
Jannotti were severed from that of Schwartz and Jannotti. Both
Johanson and Criden were convicted on similar charges in the Unit-
ed States District Court for the Eastern District of New York, and
the government moved for their dismissal as defendants here.
4. Criden, Johanson, and Mayor Errichetti of Camden, New
Jersey, were instrumental in arranging for four congressmen. in-
cluding Philadelphia Congressmen Myers and Lederer. to meet the
F.B.I. agents. At the meetings the congressmen agreed to introduce
immigration bills in return for money, leading to their ultimate in-
dictment and conviction.
A6
two representatives of the Sheik would be coming to
Philadelphia to begin discussions. Weinberg suggested
that they be introduced to Congressman Myers or
Lederer, and asked Criden which one would be better.
CRIDEN: Well, I got to hear what you want to
do first, and. . . you know.
WEINBERG: I think they’re looking to build a
hotel there. I'm not sure. That’s only what I heard.
CRIDEN: Okay. Why don't you tell him to find
out more particulars because I don’t know that ei-
ther one would help you in that department. We
may be able to give you more help to them.
WEINBERG: Who do you know there?
CRIDEN: Everybody!
WEINBERG: Everybody?
CRIDEN: Everybody!
WEINBERG: Allright. Pll. . . I'll.
CRIDEN: Remember. | got a partner who's a
city councilman.
A211-12.
A week later, on January 18, 1980, Criden met with
F.B.1. agents Michael Wald and Ernest Haridopolos at
the Barclay Hotel in Philadelphia. Wald and Haridopolos
used the names Michael Cohen and Ernie Polos in their
dealings with defendants throughout these events. That
meeting was among the group of meetings at the Bar-
clay recorded on videotape by the F.B.I. Wald told
Criden that the Sheik was interested in building a hotel
in South Philadelphia, that Wald’s role was to address
himself to possible problems such as zoning, condemna-
tions, and variances. A351. Criden stated, “You don’t
have any problem. You got you two of the strongest
guys” [referring to Myers and Lederer}. Wald responded,
“He [Sheik] wants to be assured that municipal govern-
ment and he can coexist.” Criden asked, “How do you
want me to satisfy you,” to which Wald responded, “I'm
sure the easiest way for me to deal with someone in mu-
A7
nicipal government and I can go back... . Titles im-
press the man, as you know, from past experience. . . .
If he receives those assurances from someone with a ti-
tle sounds appropriate, eh, I buy it, he buys it.” A351-53.
Wald asked Criden about the municipal setup, in-
cluding city council. Criden explained that Philadelphia
City Council is composed of 12 district councilmen and
five at-large councilmen, that his “partner [Johanson is}
a district councilman”, and that the president of city
council, Schwartz, “is a powerful guy” who had been
“president of city council for maybe now ten, twelve
years, already now. Has got power.” Wald responded,
“He’s the man.” A354-55. Wald later asked:
WALD: Can we deal with Mr. Schwartz.
CRIDEN: Oh, sure.
WALD: He seems like the type of person we
CRIDEN: Oh, sure.
WALD: Can I deal with him while I'm here in
town?
CRIDEN: I don’t know. I gotta get hold of my
WALD: Can I deal with your partner?
CRIDEN: Oh, sure.
A357. After some discussion of timing and the proper
“tariff,” Wald asked if he could talk candidly with
Johanson. Criden responded that “As far as Johanson is
concerned, you can talk as candidly as you want.” With
regard to Schwartz, he stated, “He may want to handle it
indirectly.” A367. Wald expressed some concern, stating
that under no circumstances would he want to disap-
point his employer.
CRIDEN: Listen, Mike, I, I read you loud and
clear and if I was sitting in that chair, | would feel
exactly the same way ok. You have no problems
with me.
A8&
WALD: Ok. How do you want to work this?
Eh, do you wantta call me back here concerning
CRIDEN: Oh sure.
WALD: Mr. Johanson.
CRIDEN: T'll get back to you in the next cou-
ple hours.
WALD: Alright.
CRIDEN: If I can serve him up.
A368-69. Wald then asked what the “tariff” would be for
Johanson and Schwartz, and Criden replied
“[t}wenty-five” for Johanson, A375, and “|a|nother fifty”
for Schwartz. A376. Wald demurred at the latter figure,
and Criden asked, “You wanta go thirty on this guy?”
Wald asked, “will he bite at thirty?. . . 1 mean does that
take care of him?” and Criden replied, “Let me try it
I'll run it up the flagpole.” A376-77. Finally
Criden raised the subject of his fee and asked for and
was promised “ten for both of them.” A377.
Several hours later, Criden returned with Johanson
to the Barclay suite where Wald and Haridopolos waited.
Wald again discussed the proposed hotel construction,
explained that he wanted to avoid delays due to the need
for a variance or a building permit, and received
Johanson’s assurances that the inspectors from Licenses
and Inspections, the building inspectors, the plumbing
inspectors, and the electrical inspectors are “not gonna
monkey with you, for a minute because they're gonna be
told not to. . . because the words gonna come down,
that this is a vital project.” A421. In discussing the politi-
cal situation in Philadelphia, and City Council in par-
ticular, Johanson boasted that of the 17 councilmen, he
and Schwartz was each a “very bright fella”, and “after
that there ain’t a brain in the closet.” A415. He spoke of
his and Schwartz’ importance, and stated that Schwartz,
Jannotti and he “run the City Council.” A450. Wald then
asked about Jannotti:
A9
WALD: Would he be interested in doing busi-
ness with us.
JOHANSON: I don’t know that it’s necessary
but if you want to we can.
WALD: I don’t know — if it is —- you're the
best judge of that.
JOHANSON: I think George is ah —
CRIDEN: Well, it might not be a bad idea to
bring Harry up.
JOHANSON: We can bring Harry up. Harry's
the Majority Leader. He’s the — ya know, second in
command.
WALD: Yea.
JOHANSON: He's got seniority.
A453-54. After some additional discussion, the following
exchange took place:
HARIDOPOLOS: Are you acquainted with
how much ah, ya know, ah for the favor and for all
these assur — assurances, right.
CRIDEN: Right.
HARIDOPOLOS: You know how much it is?
JOHANSON: Sure.
HARIDOPOLOS: How much is it?
JOHANSON: Twenty-five.
HARIDOPOLOS: Okay, ah but, of course, ah,
we have to have these proper assurances. You do us
a favor, we’re doin you a favor.
CRIDEN: Obviously.
JOHANSON: Sure.
A471. Johanson gave his assurances and received
$25,000. A480. The following exchange took place:
WALD: And for 25 we've got a friend.
JOHANSON: Right.
A477. The conversation turned to Schwartz:
WALD: Can I talk to Mr. Schwartz as I have
spoken —
A10
JOHANSON: Next week —
WALD: — to you gentlemen —
WALD. [F]rankly. . .
CRIDEN: If you can’t have the same discus-
sion with George, . . . you won't have the meeting.
A485. Wald asked the same question about Jannotti.
Criden promised to let him know whether he could have
the same kind of conversation with Jannotti. A490. After
Johanson left, Haridopolos gave Criden $5,000 and
promised another “five for the next delivery.” A501.
Criden, who did not know Schwartz personally, ar-
ranged for Schwartz to meet the F.B.I. agents through
an intermediary, Judge Thomas Shiomos of the Court of
Common Pleas of Philadelphia County, who lived in the
same apartment hotel as Schwartz. Shiomos testified at
trial that at a meeting on January 21, 1980 between him,
Criden and their mutual friend, Mr. Kattheman, Criden
told him of the proposed hotel construction, asked him if
Schwartz would be interested in talking to “these people
. . . for the purpose of giving them his advice with re-
gard to building this complex in Philadelphia,” and indi-
cated that the investors were willing to “pay for
[Schwartz’] advice.” A639-40. Shiomos thereafter met
with Schwartz, advised him that Criden had wealthy
Arab clients who wanted to invest $150 million to build a
hotel in Philadelphia, and indicated to Schwartz that
Criden had said there “would be a fee for Mr. Schwartz
for his advice” and “that Mr. Criden expected part of that
fee.” A643. Schwartz stated that he “would be interested
in anyone who is willing to invest $150 million.”
Shiomos stated when he left that he didn’t think there
was anything “improper” but that if Schwartz “thought
there was anything improper or fishy |Shiomos was]
sure if [Schwartz] met with Mr. Criden that [Schwartzj
All
could determine that.” A644.° Thereafter Criden spoke
with Schwartz. That discussion was not taped or record-
ed, and there was no trial evidence as to the contents of
the conversation.®
On January 23, 1980, Criden and Schwartz visited
Wald at the Barclay suite. This conversation was
videotaped. Criden stated that he and Schwartz had
“spoken at length” and that Schwartz knew that those
persons whom Wald represented were “interested in
building a hotel facility in Philadelphia that may amount
to some 30 or 40 million dollars.” A689. Wald explained
his purpose:
WALD: Well, what I have been instructed to
do and the purpose for ah my visits to to Philadel-
5. Some time after Schwartz attended the January 23, 1980
meeting at the Barclay, Shiomos and Kattleman went to
Kattleman’'s apartment where Criden lay $6,000 on the table as the
fee to be paid to Shiomos and Kattleman. Shiomos assumed this was
a portion of Criden’s share of the fee that was paid to Schwartz.
A654. Shiomos testified he gave his $3,000 share to Kattleman.
A655.
6. In his post-trial testimony, Criden testified:
Q. All right, now, when you went and saw Mr. Schwartz
after Judge Shiomos had arranged for the interview, did you tell
Mr. Schwartz that the purpose for Mr. Schwartz going there is
to be a consultant for these Arabs or the Arab representatives?
A. To some degree, yes.
Q. You say *o some degree —
A. I told Mr. Schwartz there would be a consulting fee in-
volved and I explained the project to him and I also told Mr.
Schwartz that I had represented these people and had done
business with them for some period of time and that he would
receive a consulting fee.
Q. Did you tell Mr. Schwartz at any time prior to his going
to that meeting that the purpose of the meeting was in a sense
to fix him and to arrange for him to take care of matters in front
of City Council?
A. No, sir.
A3317.
Al2
phia is to firm up uh, what we consider to be a major
investment here and uh the gentleman cares to
make a major investment here because he seems to
like Philadelphia, and he has been told that it would
uh be in his best interest to have an investment, uh,
in an area where he, uh, would like to take up rather
permanent residence and Philadelphia is it.
SCHWARTZ: Philadelphia is a nice city.
Philadelphia has been on the move since 1952. And,
uh, business climate in Philadelphia is good.
A690. Wald continued:
WALD: Uh, and we want to put one up. Now
we know that there are problems inherent in any
major construction, uh, in this city and any other
city. What I am trying to do is take care of any po-
tential problems long before they exist. We’re not
breaking ground tomorrow morning. We can forsee
certain problems such as, uh, uh, zoning and
variances and this type of thing. . . municipal gov-
ernment, how it effects those various things, but we
don’t want to be faced with problems down the road.
A691-92. Schwartz responded to this overture with a so-
liloqguy on his own political power and importance. After
explaining how close he was to the mayor’ and that he
was “sort of a protege” of the mayor’s deceased father,
who had been Chairman of the {[Democratic] party,
Schwartz stated:
SCHWARTZ: . . . Unfortunately then he died
in 63. And I have been close to every chairman
since. I am a member of the Democratic National
Committee. I am a member of the State Committee.
7. There is no evidence that William Green, Philadelphia's
then newly elected mayor, was ever involved in or knew of the
transactions at issue. In fact, Criden described Green as “an All
American boy”, A343, and advised Wald that it would be “a critical
mistake” to approach him. A372.
Al3
I am a member of the City Committee. A Ward
Leader. I, uh, I have a ward — if you know what
that means in politics.
A693. A few minutes later, Wald asked:
WALD: Is it fair to say that by doing business
with you, uh. . . my zoning problems become... .
SCHWARTZ: Right.
CRIDEN: You, you don’t have any.
WALD: Okay. Now. There are what, 17 mem-
bers, as, as you say. . . and also what uh I read
here. . .
SCHWARTZ: Right.
WALD: Uh, do we have a uh controlling vote
‘SCHWARTZ: Yes.
WALD: . . . problem here?
SCHWARTZ: No...
WALD: Uh.
SCHWARTZ: No.
WALD: Can you control. . .
‘WALD: . . . those types of factions?
SCHWARTZ: Yes.
WALD: You can control them?
SCHWARTZ: The proof was today. The proof
was the election of myself as president again.
WALD: Uh hmm.
SCHWARTZ: In other words, we got uh five or
six now [sic] members that came in. Uh, you tell me
your birth date. I'll give them to you for your
birthday.
A695-6. The essence of Schwartz’ representations of
control was repeated shortly thereafter:
WALD: All right. You’re controlling the coun-
cil at this point.
Al4
SCHWARTZ: Right.
WALD): As far as I’m concerned.
SCHWARTZ: Right.
CRIDEN: Right. And has been for. .
SCHWARTZ: Right. Right.
WALD: Should we have anything that comes
up to a vote, that has to be done on a vote basis, the
council is with you.
SCHWARTZ: Yes.
WALD: You control them at this point.
SCHWARTZ: Yes. Yes. Yes.
CRIDEN: 100 percent.
SCHWARTZ: Yes.
A709. Schwartz stated that although he could not prom-
ise that the hotel project would not have problems, those
problems would not be “insurmountable” as long as the
project “is a proper project.” A698. Wald stated, “I am
not putting up a cathouse”, Criden interjected, “It’s go-
ing to be legitimate”, and Schwartz responded, “That I
take for granted, or I wouldn’t be here.” A710. Wald then
asked Schwartz for assurances of his support if the
project “violates some minor. . . type statute or ordi-
nance or. . . something”, and Schwartz replied:
SCHWARTZ: There is a Board of Building
Standards. There, there is built-in relief every stage
of the way. There’s a Zoning Board of Adjustment
for variances.
WALD: Okay. Can you control that?
SCHWARTZ: Yes... .
A711. Immediately thereafter he explained, “if it isn’t
something that is outlandish, if it is something that
should and can be handled, and I can, I can’t think of
anything that couldn’t be handled. . . [t}hrough a vari-
ance procedure of some kind.” A712. Wald stated:
WALD: Okay. Meaning that, if City Council
has to vote on it, we don’t have a problem at this
point?
Al5
SCHWARTZ: Well, I’m going further. There
are other boards and agencies, uh, depending upon
what your client, how idiosyncrant he wants to be
and how eccentric he wants to be.
WALD: (Laughter) ... They can become
rather eccentric.
SCHWARTZ: All right. All right. It may be
necessary to go to these various boards and commis-
sions. Now, they are part of the organization. They
are part and parcel and. . .
WALD: Appointed, appointed officials?
SCHWARTZ: Yes, they are appointed officials.
Uh, but uh, as I say, uh, I always do my homework.
And, uh, the mayor is a very strong mayor. We have
a strong mayor form of government. And all these
people are his appointees. My understanding with
him is that I go to him — period. I don’t even have to
go to one of the flunkies, one of the functionaries. I
gotohim....
A712-13. After additional discussion which concerned
local law firms that could be employed by ‘the hotel
project, the economic climate in Philadelphia, and the
encouragement received by business from the city, Wald
referred to Schwartz’ compensation:
WALD: Our time frame is growing short, but
we don’t have those type of problems. We don’t have
that built-in resentment. Ah. . . We've talked to
Howard, you know, the figures, the dollars we're
talking are in the right ballpark. We're. . .
SCHWARTZ: That’s not my prime concern.
I'm interested in the City of Philadelphia. I’m inter-
ested in a good project. I’m interested in tax
rateables. I want to see Center City develop. Espe-
cially Center City. There are a few parcels left. Well
anything else that’s going to add to the tax rateables
of the city that’s going to create jobs.
Al6é
WALD: I am again quick to say that I’m not
really interested in the City of Philadelphia to be
candid.
SCHWARTZ: Well | have to be. I have to be.
WALD: Perhaps, oh sure. . . (inaudible)
CRIDEN: Your primary concern is to see that
if your employer decides to move, you have a mini-
mum amount of problems.
WALD: Exactly. . . . Problems are to be han-
dled before they arise. Right. Should any minor
problems come up. Should any problems that are
councilmatic in scope. . .
SCHWARTZ: No problem.
WALD: You could take care of them. Those
are the type of things. . .
SCHWARTZ: Right.
WALD: That he asks I make an unequivocal,
yes, it’s been handled, it’s been taken care of and uh
‘CRIDEN: You make that an unequivocable
yes.
SCHWARTZ: It’s. . . I would say to you that
it’s much easier now than it is than it was four years
ago.
A746-47. The conversation returned to the nature of the
understanding:
SCHWARTZ: There are administrative escape
hatches for everything in the City of Philadelphia
under our various codes. There’s a way of doing it —
administrative way of doing it.
WALD: Okay, and that is the type of thing you
can handle for us.
SCHWARTZ: Oh yeah, right.
WALD: I can go back and say I met a gentle-
man. We had a business deal uh, I've made a friend
in Philadelphia.
Al7
SCHWARTZ: Yes.
WALD: And things are taken care of. . .
SCHWARTZ: Right. . .
WALD: Okay, and the sums appropriate and
we're in good shape. Okay.
A753-54.
Shortly thereafter as seen on the videotape, Wald
opened his briefcase and, without discussion of the
amount, handed Schwartz an envelope [containing
$30,000 cash], which Schwartz placed in his jacket
without counting. The nature of the commitment
Schwartz made was reiterated:
WALD: The legislative problems we've taken
care of?
CRIDEN: No problem.
WALD: Okay, that | can, that I, that I got as-
surance on.
SCHWARTZ: Right.
CRIDEN: You have, you have no problem.
WALD: Okay, the other things can be done
through attorneys, but the legislative problems
don’t exist anymore?
CRIDEN: That’s right.
SCHWARTZ: No. Do not.
WALD: Okay.
A756.
Criden remained behind and received his $5,000
fee for arranging the meeting. A758. He admitted to
Wald that he had to give “something” to someone to
make the approach to Schwartz. A763. Wald indicated
an interest in talking to Jannotti if he was “amenable”
because both Criden and Johanson hed referred to
Jannotti “as a power.” A770. Criden undertook to ascer-
tain to “try to do something” with Jannotti and “if the an-
swer is no, I’m going to tell you right off the bat, forget
it.” A778. They discussed the amount of the payment to
Al8
Jannotti, Wald asking “Will he run with five” and Criden
replying “Maybe ten. . . [L]et me run it up the flag pole
with him.” A779-80. Wald asked whether he should deal
with anybody else on the executive side and was told
that there was no one else he could or should do busi-
ness with. Criden promised to communicate with Wald
the next day and departed.
The next evening, January 24, 1980, following tele-
phone arrangements, Jannotti and Criden arrived at the
Barclay suite to meet with Wald and Haridopolos.
Jannotti had been briefed by Criden and Schwartz earli-
er that day who had “explained the whole situation.”
A848. With Jannotti, as with Schwartz, Wald explained
“I’m only here for one reason, to bring back some assur-
ances.” A849. He continued:
WALD: [W]e are prepared to make a major in-
vestment in this city, alright, and, ah, we have in-
credible funding but it’s still a major investment
even for the people that I represent at this time. Ah,
it’s not a drop in the bucket even for them. It’s a fair
amount of money and ah, the way these people do
business, is somewhat different than the way we do
business in this country, they don’t think. They just
can’t tolerate nor can they put up with psychologi-
cally any problems that arise. Now these type of
problems do arise but they can be handled, but the
type of problems that would get back to my employ-
er. Ahe, he can’t deal with them, and he turns to me
and says I thought we had all this settled in Phila-
delphia. So, that’s why I’m here, simply to take care
of any problems now.
JANNOTTI: Far in advance.
WALD: Ah, it’s really not that far | don’t think.
CRIDEN: Well. . .
WALD: But at least enough in advance that ah
when the time comes it’s over and done with every-
thing is nice. Ah, those problems are simply the
Al9
ones that I can forsee and you haven't come up with
anymore than you and I had been worried about nor
has the other gentleman I dealt with, and that
would be ah, ah, the zoning, any variances that we
have to obtain any, ah, committee type things we’d
would have to, ah, deal with, with City Council ah,
inspections, licensing the whole gamut, ya know
the whole thing, well vou were in that type of busi-
ness in, in an allied situation and I’m sure you can
appreciate the petty things that arise, ah, that have
to be handled.
JANNOTTI: First of all you, you're going to in-
vest a substantial amount of money and, ah, what
you'll be doing is bringing into the City of Philadel-
phia a substantial amount of money, and this will
create jobs, will create a tax base and ah from what I
gather everything that you want to do with be strict-
ly, ah, on board. I mean there’s nothing phony about
it.
WALD: It’s a legitimate operation.
JANNOTTI: As long as it’s, long as it’s a legiti-
mate, legitimate operation. Ya know, any legitimate
operation we will fight for because, ah, ya know why
shouldn’t we fight for a legitimate operation? If the
operation is legitimate, it’s going to bring a tax base
into the City of Philadelphia, it’s going to bring em-
ployment into the City of Philadelphia, ah, this is,
this is basically our job, ah George George’s job and
my job, ah, to try to get as much money into the City
of Philadelphia and as many jobs into the City of
Philadelphia as we possibly can.
A849-51. Wald asked:
WALD: [Bly dealing with you here this eve-
ning and, and the gentleman I, I spoke with last
evening, can I go back with those assurances?
JANNOTTI: I don’t see why not, as you say, ya
know it’s a legitimate project and you have your fi-
A20
nancing, there’s nothing ah, there's nothing that
you're doing illegal. . .
CRIDEN: Michael wants to be sure that he
has a friend if he has a problem.
JANNOTTI: Oh certainly.
WALD: If something arises, if something
arises that needs a City Council vote to be very spe-
cific, a City Council vote is needed on the thing, can
I count on your vote?
JANNOTTI: Why sure. . .. first of all we'll go
over it again, you have a legitimate project, ah,
you're going to invest 36 million dollars in the City
of Philadelphia, which is going to create a tax base
and going to create employment.
WALD: Right, but.
JANNOTTI: But ya, but.
HARIDOPOLIS: A lot of legitimate, ah, things
get bogged down, we don’t want to be bogged down.
JANNOTTI: No, I can't see this being bogged
down.
A853-54. Wald explained his position:
WALD: Let me give you a short insight into
the Arab mind, that its ah, it’s at times difficult to
understand now, ah, I can appreciate it because I’ve
had both worlds and I can relate, ah, you know, you
folks are here, right, they, they think differently,
they deal differently, their psychological process are
alien to the way I understand exactly what you're
saying. Ok. I’m coming up with something that’s
going to help the City of Philadelphia. Ah, it would
help, as it would help any city. Ah, he does not look
on it that way. They do business, differently. They
pay the freight up front. They make friends, right,
and then when there, there is a potential problem
then I don’t mean, I don’t mean a problem that
would necessarily close down construction and
throw the project out of Philadelphia.
A21
A855-56.
Wald and Jannotti discussed City Council politics,
and Jannotti affirmed Criden’s statement that Council
“never had a vote on an issue that George and Harry
wanted passed that they'd lost in the last two years.”
A859. They then discussed the payment to Jannotti:
WALD: But, you were here at the time. You
convinced me right off the bat that we were in the
right city and we would have no problems.
CRIDEN: You will have no problems.
WALD: And I would just as soon save the
money, but I can’t go back.
CRIDEN: I understand, we _ had that
discussion.
WALD: (Pointing to Criden) Did he, was he
very graphic with ya?
JANNOTTI: Yes.
WALD: On exactly how. . .
JANNOTTI: (Nodding yes) He was always up
front, up front.
WALD: Ok and...
CRIDEN: To the bottom line, you know me
Michael, I, I don’t we, we both do everything right
up front.
WALD: Ok and, alright, then I’m going to be,
then I’m going to be up front with ya. I'm.
CRIDEN: Exactly.
WALD: Ah, you've been in business all your
life, you’ve as you said, you got an education 20
years behind the bar, I was sent to Philadelphia to
pay for certain things because that is the psychology
and that is the method of business that these people
are use to, and that is how they conduct business,
they conduct with everybody they do. That’s why
I'm here. I understand their psychology, I’ve been
involved with them long enough, ah to make it a
major part of my life, a majority of my life.
A22
JANNOTTI: Well, you know ah, just just on
the basics, of what you said and what they want to
do, it’s enough for me to get on the floor and argue. I
don’t have to, even care what else they want to come
up with. My basic point is, the fact that, ah what’s
coming in here, and this has been our job, to bring
as much business and and, and ah tax base and em-
ployment to the City of Philadelphia. If that’s the
way they want to do business, that’s all right too.
A859-61. Wald asked again for “assurances”:
WALD: Can I go back, ah ah, to my employer,
the Sheik and tell him that I dealt with a man, on
Wednesday night tell him who he is, dealt with you,
Thursday night, explain who you were, what your
position is and say he and I conducted a cash busi-
ness transaction and he guaranteed me, we don’t
have a problem in Philadelphia. We ah, ah City
Councils on our side the man has the influence with
the Finance Committee, he has influence. . .
JANNOTTI: You wouldn't, you wouldn't be
able to say we don’t have a problem. Problems might
arise, but problems ah, you might say problems can
be solved.
WALD: Ok, you can handle those problems we
presume.
JANNOTTI: I don’t see why not if it’s a legiti-
mate, if it’s a if it’s a legitimate if it’s a, if it’s a legiti-
mate enterprise, it’s a legitimate piece of business.
WALD: By making friends with you this eve-
ning, if we have to go to City Council and say look,
ya know, give us a break, right, got us some legisla-
tion that this is ok. That it’s in the right neighbor-
hood, that the time.
CRIDEN: If you want a street for example let's
say changed from a two way to a one way ok, maybe
that will help you.
A23
WALD: Ok.
CRIDEN: Handle your traffic pattern.
JANNOTTI: We handle that everyday.
WALD: But I go back and I'll say we have this,
and I'll use that as an example that if we have a one
way street situation and it’s just hurting the front,
of, of the place we cannot move people in and out of
the hotel limousines to private vehicles and what
have you, ah the men I dealt with said they will
help. I’m not saying that you could walk in there
and change this thing tomorrow, but.
CRIDEN: Yet.
JANNOTTI: We'll go in there and battle, we'll
go in and battle.
WALD: You're with us?
JANNOTTI: Certainly, we'll go in and battle.
A863-67. Wald then took an envelope from his briefcase
[containing $10,000 cash], handed it to Jannotti, and
asked if “that amount is sufficient.” Jannotti took the en-
velope, answering, “We've discussed it.”
HARIDOPOLIS: You know how much it is?
CRIDEN: Tell him, you can tell him.
HARIDOPOLIS: How much is it?
CRIDEN: Tell him?
JANNOTTI: We won't even discuss it.
WALD: Ok, but you did discuss it with
Howard?
JANNOTTI: We won't even discuss it.
HARIDOPOLIS: Is this arrangement please,
pleasing to you?
JANNOTITI: As I say, we won't even discuss it.
WALD: Ok, well, we've done our business.
A884-85. Jannotti departed, and Criden promised to see
him downstairs.
A24
Il.
HOBBS ACT CONSPIRACY
In its opinion granting the motions for acquittal the
district court noted that the “evidence permitted, al-
though it did not compel, the inference that the pay-
ments represented bribes paid in exchange for the de-
fendants’ assurances of using their official positions to
pave the way for expeditious completion of the project.”
501 F. Supp. at 1184. The court, however, dismissed
Count III of the indictment, the Hobbs Act conspiracy
count, for two reasons. The first dealt with the fictitious
nature of the scheme. Although the court was willing to
assume that the “evidence permitted the jury to con-
clude that, if the project had in fact been a genuine
project, it would have required the movement of articles
in interstate commerce, and that the payment of these
bribes would have affected such commerce by depleting
the funds available for carrying out the project,’ the
court focused on the fact that “there never was any such
planned project. The Arabs, their plans, and their money
were all entirely fictitious.” Id. The court concluded:
While the jurisdictional reach of the Hobbs Act is
undoubtedly extensive, touching conduct having
only minimal or potential impact upon commerce
(broadly defined), it does not operate to confer fed-
eral jurisdiction over purely hypothetical potential
impacts on commerce which could never occur.
Id. at 1185. The district court thus fashioned a require-
ment that conviction for conspiracy to violate the Hobbs
8. In charging the jury on the Hobbs Act count. the court in-
structed that it must find that “a natural and probable consequence
of the extortion, the receiving the money. would have been to affect
interstate commerce” and that the Government position was that
the receipt of the payments of $30,000 and $10.000 would have had
an effect on interstate commerce. A1344-45.
A25
Act requires an actual potential effect on interstate
commerce.
The second jurisdictional defect, according to the
district court, stemmed from its view that the Hobbs Act
does not cover the “passive acceptance of gratuities by
public officials.” Id. The district court, after noting that
defendants did not request payment and “made it very
clear that the payments would not be necessary”, found
that the convictions would represent “a substantial
stretching of the definition of extortion.” Id.
A.
Effect on Interstate Commerce
The broad ianguage of the Hobbs Act, covering any-
one who “in any way or degree. . . affects commerce
. . . by. . . extortion or attempts or conspires so to do
. . .”, 18 U.S.C. §1951,° demonstrates Congress’ intent
to free interstate commerce from burdens of any kind
caused by extortion. The Supreme Court has expressly
recognized that the statute manifests a congressional
purpose “to use all the constitutional power Congress
9. The Hobbs Act reads in pertinent part as follows:
Whoever in any way or degree obstructs, delays, or affects
commerce or the movement of any article or commodity in
commerce, by robbery or extortion or attempts or conspires so
todo. . . shall be fined not more than $10,000 or imprisoned
not more than twenty years, or both.
18 U.S.C. §1951(a). The statute defines “commerce” as
commerce within the District of Columbia, or any Territory or
Possession of the United States; all commerce between any
point in a State, Territory, Possession, or the District of Colum-
bia and any point outside thereof; all commerce between points
within the same State through any place outside such State;
and all other commerce over which the United States has
jurisdiction.
18 U.S.C. §1951(b)3).
A26
has to punish interference with interstate commerce
" Stirone v. United States, 361 U.S. 212, 215
(1960). Accord, e.g., United States v. Cerilli, 603 F.2d
415, 423 (3d Cir. 1979), cert. denied, 444 U.S. 1043
(1980). See also United States v. Culbert, 435 U.S. 371
(1978); United States v. Green, 350 U.S. 415, 420-21
(1956). In United States v. Staszcuk, 517 F.2d 53, 58
(7th Cir.) (en banc), cert. denied, 423 U.S. 837 (1975),
the court concluded that “the purpose of the Hobbs Act
parallels the central purpose of the Commerce Clause
itself.” Thus, the decision of the district court in this
case has application beyond the Hobbs Act because the
extent of Congress’ power under the commerce clause is
implicated, and, if its analysis is accepted, will have
ramifications for all federal criminal statutes enacted un-
der Congress’ commerce clause power.
We begin the analysis of Congress’ power to regu-
late interstate commerce with the now-accepted princi-
ple that the commerce clause reaches, inter alia, activi-
ties affecting interstate commerce. Perez v. United
States, 402 U.S. 146, 150 (1971); United States v. Dar-
by, 312 U.S. 100 (1941). However, application of a fed-
eral criminal statute is not limited to those cases in
which an actual interstate effect is shown. Instead, as
the Court recognized in Perez v. United States, 402 U.S.
at 152-53, it is enough that the conduct falls within the
“class of activities” within the reach of federal power.
Schwartz and Jannotti were convicted of a conspir-
acy to violate the Hobbs Act, rather than of a substantive
violation of the Hobbs Act. A substantive violation of the
Hobbs Act generally is supported by proof of an actual
effect on commerce. See, e.g., United States v. Mazzei,
521. F.2d 639, 642 (3d Cir.) (en banc), cert. denied, 423
U.S. 1014 (1975). But see United States v. Staszcuk,
517 F.2d 53, 59-60 (7th Cir.) (en banc), cert. denied,
423 U.S. 837 (1975) (actual effect need not be shown;
“realistic probability” of effect is sufficient). Defendants
A27
argue that it follows that a prosecution for conspiracy to
violate the Hobbs Act also requires proof “that com-
merce must have been affected.” Brief for Appellee
Jannotti at 22. In so arguing, defendants overlook the
significant distinction between a conviction for a sub-
stantive offense and a conviction for a conspiracy to
commit the substantive offense. This distinction was
recognized by the district court at an early stage of the
litigation when it dismissed the substantive Hobbs Act
counts of the indictment on the ground that there was
no possibility that the bribe payments could actually
have affected commerce, but left standing the conspir-
aey count on the possibility that federal jurisdiction
could be grounded on proof that the conspiracy, if com-
pleted, would affect commerce. See 501 F. Supp. at
1184. The subsequent dismissal of Count III of the in-
dictment was apparently grounded on the district court's
changed view of the law that an actual potential effect
was required, even for a conspiracy conviction. We be-
lieve the district court’s earlier view was the correct one
Because an agreement between two or more per.
sons to commit criminal acts poses, in and of itself, a sc
rious danger to social order, it is proscribed by the law of
conspiracy. See Callanan v. United States, 364 U.S. 587,
593 (1961). The ultimate failure of the conspiracy may
diminish, but does not eliminate, the threat it poses to
social order; therefore, the illegality of the agreement
does not depend on the achievement of its ends. See gen-
erally United States v. Shoup, 608 F.2d 950, 957 n.13
(3d Cir. 1979); United States v. Bobo, 586 F.2d 355, 371
(5th Cir. 1978), cert. denied, 440 U.S. 976 (1979). It is
similarly irrelevant that the ends of the conspiracy were
from the very inception of the agreement objectively
unattainable. United States v. Waldron, 590 F.2d 33
(1st Cir.), cert. denied, 441 U.S. 934 (1979) (conviction
for conspiracy to transport stolen goods in excess of
$5,000 affirmed, even though, unknown to defendants,
A28
property transported was worth less than $5,000); Unit-
ed States v. Thompson, 493 F.2d 305 (9th Cir. ), cert. de-
nied, 419 U.S. 834 (1974) (defendant can be convicted
of conspiracy to smuggle marijuana even though sub-
stance was not shown to be marijuana). In this case the
defendants agreed to do acts which, had they been at-
tainable, would have affected commerce. At that point,
regardless of whether an actual effect on commerce was
“reasonably probable,” a sufficient federal interest was
implicated to support federal jurisdiction over that
agreement.
The Hobbs Act, by its own terms, encompasses the
inchoate offenses of attempt and conspiracy to extort.
Convictions for these offenses have been sustained not-
withstanding the absence of any evidence of an actual
effect on interstate commerce. In United States v. Rosa,
560 F.2d 149, 153 (3d Cir.) (en banc), cert. denied, 434
U.S. 862 (1977), a case in which there was no effect on
commerce because the “victim” refused to pay the extor-
tion demand, we stated that a defendant may be convict-
ed under the Hobbs Act for an “attempted extortion
which would, if the act were completed, have the effect
of obstructing commerce.” See also United States v.
Bellomini, 454 F. Supp 44, 47 (W.D. Pa. 1978) (“The
fact that the business enterprise was frustrated at a later
date through failure of finances does not constitute a de-
fense to a charge of attempt to extort money in violation
of the Hobbs Act.”). Similarly, in United States v. Caci,
401 F.2d 664 (2d Cir. 1968), vacated on other grounds,
394 U.S. 310 (1969), the Second Circuit sustained the
conviction of defendants for conspiracy to rob an
armored car messenger in violation of the Hobbs Act al-
though the plan was aborted.
Counsel for defendants conceded at oral argument
that they could point to no precedent to support their
contention that a conviction for conspiracy to violate the
Hobbs Act must be predicated on a showing of an actual
A29
or probable future effect on interstate commerce. One of
the few cases to focus on the interstate commerce aspect
of the Hobbs Act, United States v. Staszcuk, 517 F.2d 53
(7th Cir.) (en banc), cert. denied, 423 U.S. 837 (1975),
arose when a local alderman was convicted of a substan-
tive Hobbs Act violation. The government had proven
that he received $3,000 and that he did not oppose a
zoning change which authorized the construction of an
animal hospital. Because no such hospital was ever
built, the court noted that “there is no evidence that ei-
ther the zoning change or the payment had any effect
whatsoever, either favorable or unfavorable, on inter-
state commerce.” Id. at 55. Judge, now Justice, Stevens,
writing for a majority of the en banc court, considered
whether the federal statute reached extortion under
those circumstances, and concluded: “We are. . . per-
suaded that the cases which uniformly hold that a
threatened effect on interstate commerce is sufficient to
bring the statute into play notwithstanding the absence
of any actual effect, correctly interpret the congressional
purpose.” Id. at 59 (emphasis added).
We believe Justice Stevens’ approach is dispositive
of the jurisdictional issue before us. Congress can con-
stitutionally reach inchoate offenses because these
offenses pose a potential threat to interstate commerce;
the existence of such a threat ties “the proscribed con-
duct to the area of federal concern delineated by the stat-
ute.” United States v. Feola, 420 U.S. 671, 695 (1975).
The appropriate inquiry then is not whether the defen-
dants’ perceptions can invest the courts with federal ju-
risdiction, as the district court viewed the issue, but
whether the defendants’ conduct constituted a sufficient
threat to interstate commerce so as to implicate an “area
of federal concern” sufficient to give rise to federal
jurisdiction.
In essence the defendants are arguing that we
should accept an impossibility defense when federal ju-
A30
risdiction is predicated on interstate commerce. We be-
lieve such a defense must be rejected here. In substan-
tive Hobbs Act convictions, the requisite nexus to
interstate commerce has been found in the depletion of
assets theory, because the payment of an extortion de-
mand may reduce the assets available for the purchase
of goods originating in other states. See, e.g., United
States v. Cerilli, 603 F.2d 415, 424 (3d Cir. 1979), cert.
denied, 444 U.S. 1043 (1980) United States,.v.
Addonizio, 451 F.2d 49, 77 (3d Cir. 1971), cert denied.,
405 U.S. 936 (1972). In United States v. Rindone, 631
F.2d 491 (7th Cir. 1980), the Hobbs Act conviction of a
municipal inspector who had extorted money in ex-
change for work permits was challenged on the ground
that there was no nexus with interstate commerce under
the depletion of assets theory because the Federal Bu-
reau of Investigation had supplied the money used in the
extortionate transaction. In rejecting this claim, the
court reviewed Hobbs Act cases which upheld jurisdic-
tion although no depletion of assets affecting interstate
commerce had or could take place and affirmed the “fed-
eral interest in deterring even futile threats to interstate
commerce”, 631 F.2d at 493, referring to United States
v. Staszcuk, 517 F.2d at 57. The Rindone court
concluded:
As the court noted in [United States v. Brooklier,
459 F. Supp. 476 (C.D.Cal. 1978)], “|t]his extortion
completed a plan that would have actually affected
commerce but for a fact unknown to defendants,
i.e., that [the victim] was a company not actually en-
gaged in commerce.” Id. at 478. The presence here
of a fact not known to Rindone, i.e., that the FBI
provided the payoff money, is likewise irrelevant to
the jurisdictional inquiry.
631 F.2d at 494. In the Brooklier case, relied upon by
the Seventh Circuit, the victim corporation was an
F.B.I.-created shell that in fact had no interstate deal-
A31
ings. Jurisdiction under the Hobbs Act was nonetheless
upheld.
In construing other federal statutes, the courts also
have expressed an unwillingness to accept impossibility
as precluding jurisdiction. In United States v. Rose, 590
F.2d 232 (7th Cir. 1978), cert. denied, 442 U.S. 929
(1979), two defendants who had agreed to burglarize a
home in Arizona and to transport the stolen goods to IlIli-
nois, unwittingly engaged F.B.I. agents to perform the
theft and to transport the goods. The agents never in-
tended to commit the thefts and no goods were ever sto-
len; instead the defendants were arrested and convicted
of conspiracy to transport goods interstate knowing the
goods to be stolen. Although the issue of federal jurisdic-
tion was not expressly raised, the court, in affirming the
convictions under 18 U.S.C. §§371, 2314, commented:
Here [defendants] intended to cause the goods to be
stolen and then transported in interstate commerce
with knowledge that they had been stolen. All that
was necessary, in addition to an overt act, was that
the intended future conduct they had agreed upon
include all the elements of the substantive crime.
590 F.2d at 235. This statement reflects the court’s view
that the defendants’ plan to transport the goods inter-
state, even though unattainable from the outset, suffi-
ciently impinged on an area of federal concern to justify
federal regulation and prohibition. See also Craven v.
United States, 22 F.2d 605, 609 (1st Cir. 1927), cert. de-
nied, 276 U.S. 627 (1928) (conviction for conspiracy to
import foreign liquor without payment of tariff can be
sustained based on defendants’ erroneous beliefs that
liquor was of foreign origin).
Defendants have argued that the holding in United
States v. Feola, 420 U.S. at 695-96, supports their view
that an essential jurisdictional element cannot be estab-
A32
lished by reference solely to the state of mind of the de-
fendant. Feola provides no support for the defendants’
theory. In Feola, even though the defendants did not in-
tend to assault a federal officer, the Court held that they
could be still convicted for conspiring to violate the fed-
eral statute, 18 U.S.C. §111, which prohibits an assault
on a federal officer. In holding that there was a “suffi-
cient threat” to an “area of federal concern” to meet the
federal jurisdictional requirement as long as a federal of-
ficer was in fact the target of the planned attack, 420
U.S. at 695, the Court did not preclude the existence of
federal jurisdiction where the intended victim is be-
lieved to be a federal officer, but in fact is not.
In fact, the language in the Feola opinion and the
approach taken by the Court there support our final rea-
son for rejecting the district court’s holding that an actu-
al potential effect on interstate commerce is a jurisdic-
tional prerequisite for a conviction for conspiracy to
violate the Hobbs Act. Defendants have been able to of-
fer this court no policy reason for us to accept their re-
strictive view of Congress’ constitutional power to legis-
late as to conspiracies which pose a threat to interstate
commerce. Defendants agree that had the government
moved from the verbal ruse that its agents were in the
hotel construction business to the more concrete action
of embarking on that venture, see United States v.
Gambino, 566 F.2d 414 (2d Cir. 1977), cert. denied, 435
U.S. 952 (1978), the jurisdictional requirement would
have been met. However, we see no reason to interpret
Congress’ legislative power as dependent upon whether
the F.B.I. agents actually contract for a hotel site, pur-
chase machinery to dump garbage, or establish their
own fencing operation for the purchase of stolen goods.
To require that the government take that additional step
before it can constitutionally reach a proven conspiracy
which would have affected interstate commerce had the
facts been as represented misdirects the focus of the
conspiracy cases. As the Court noted in Feola, “|T|he
A33
law of conspiracy serves ends different from, and com-
plementary to, those served by criminal prohibitions of
the substantive offense.” 420 U.S. at 693. The Court
identified the dual purposes of conspiracy law, “protec-
tion of society from the dangers of concerted criminal ac-
tivity,” and sanctions against those agreements which
pose great likelihood of commission of an act due to well
formed criminal intent. Id. at 693-94.
In this case the jury found that the defendants con-
spired to violate the Hobbs Act by their acceptance of
payments in return for their promises to expedite com-
pletion of an elaborate hotel project which, had it been
constructed, would have entailed at least a $30 million
expenditure. Had the project actually been planned as
represented, defendants’ actions would have violated the
Hobbs Act even if unforeseen difficulties, such as the
overthrow of the “sheik”, prevented any further action
on the project. The federal interest in protecting inter-
state commerce is no less under the factual situation
presented in this case. The threat posed by defendants’
actions is just as great. Since Congress has exercised the
full scope of its commerce power in the Hobbs Act, we
conclude that there was Hobbs Act jurisdiction.
B.
Extortion “Under Color of Official Right”
As an additional ground for dismissing the Hobbs
Act count the district court held that defendants’ con-
duct did not constitute “extortion” under the Act be-
cause they, at most, “passive[ly]” accepted the bribes.
501 F. Supp. at 1185. The Act defines “extortion” as:
the obtaining of property from another, with his
consent, induced by wrongful use of actual or
threatened force, violence, or fear. or under color of
official right.
A34
18 U.S.C. §1951(b)(2).
The district court's holding is inconsistent with the
rationale underlying the holdings of this court that the
Act is disjunctive and proscribes the “obtaining of prop-
erty from another . . . under color of official right,”
without proof of coercion by the defendant. United
States v. Kenny, 462 F.2d 1205, 1229 (3d Cir.), cert. de-
nied, 409 U.S. 914 (1972). We reaffirmed this principle
in United States v. Mazzei, 521 F.2d 639 (3d Cir.) (en
banc), cert. denied, 423 U.S. 1014 (1975), where we
stated:
A violation of the statute may be made out by show-
ing that a public official through the wrongful use of
office obtains property not due him or his office,
even though his acts are not accompanied by the
use of “force, violence or fear.”
Id. at 645 (citations omitted). In Mazzei, we observed
that “the ‘under color of official right’ language [of the
Hobbs Act] ‘repeats the common law definition of extor-
tion.’ ” Id. (citation omitted). At common law, extortion
was defined as “any officer’s unlawfully taking, by color
of his office, from any man, any money or thing of value
that is not due to him.” 4 W. Blackstone, Commentaries
*141. The requirement that the money be taken “by col-
or of his office” meant “simply that the officer must have
taken money not due him for the performance of his offi-
cial duties.” State v. Weleck, 10 N.J. 355, 372, 91 A.2d
751, 759 (1952). Thus, “[i]f the [Hobbs] Act is read in
full, the distinction between bribery and extortion be-
comes unnecessary where public officials are involved.”
Stern, Prosecutions of Local Political Corruption Under
the Hobbs Act: The Unnecessary Distinction Between
Bribery and Extortion, 3 Seton Hall L. Rev. 1, 14
(1971). More recently, in United States v. Cerilli, 603
F.2d 415 (3d Cir. 1979), cert. denied, 444 U.S. 1043
(1980), we upheld the conviction of state officials who
received bribes in return for conferring valuable state
A35
contracts, and approved the district court’s charge that
extortion under “|cJolor of official right is defined as the
taking by a public official of money not due him or his
office... .”
The holding in our cases that the Hobbs Act covers
the acceptance of bribes by public officials even when
payment was not obtained by force, threats, or use of
fear, and the further suggestion that there need be no
inducement or prior request for such payments, accords
with the view taken by other courts of appeals. In United
States v. Hedman, 630 F.2d 1184 (7th Cir. 1980), cert.
denied, 450 U.S. 965 (1981), the government proved at
trial that defendants, city building inspectors, accepted
money from builders who failed to conform with the
building code, but no solicitation of the bribes was
shown. In rejecting defendants’ argument that the gov-
ernment must show that the officials were the
“initiators” or “inducers” of the alleged payments, the
court stated:
It is settled law in this Circuit as well as others that
in a Hobbs Act prosecution for extortion under color
of official right it is unnecessary to show that the de-
fendant induced the extortionate payment. . .
The Government is merely required to prove that a
public official obtained money to which he was not
entitled and which he obtained only because of his
official position.
Id. at 1195 (footnote omitted). The Sixth Circuit has also
held that the “technical overdrawn distinction” which
the public officials sought to make there between brib-
ery and extortion under the Hobbs Act is not in keeping
with the legislative intent, and that “in cases of misuse
of official power, bribery and extortion are not mutually
exclusive.” United States v. Butler, 618 F.2d 411, 417
(6th Cir. 1980), cert. denied, 447 U.S. 927 (1980) and
449 U.S. 1089 (1981).
A36
Defendants argue that in each of the cases in which
this court seemed to interpret the Hobbs Act to cover
passive acceptance of a bribe by a public official, the de-
fendant had in fact engaged in some conduct which
could be construed as inducement of the payment. Even
if the Hobbs Act were to be construed as requiring some
inducement on the part of the public official, defendants’
conduct in this case hardly constituted merely passive
acceptance of the payments. The evidence does not fit
the defendants’ posited illustration of an unexpected
bribe mailed to a public official’s office. On the contrary,
rather than remaining in their own offices, the evidence
shows that each defendant arrived at the Barclay suite
after having been briefed about the purported hotel
project, the fact that there would be a payment made,
and the specific amount of the payment which would be
made to each. Although there is no verbatim record of
Criden’s earlier conversation with Schwartz, Criden re-
ported to Wald that he told Jannotti before the January
24th meeting that the hotel builders wished assurances
that there would be no municipally imposed obstacles to
the project, and that the builders were willing to pay for
such assurances. A897. As soon as each defendant was
in the Barclay suite, Wald, the F.B.I. agent, promptly re-
peated the need for such assurances. Thereafter,
Schwartz launched into a discourse on his own impor-
tance and power and his ability to control City Council
and the relevant municipal officials and departments,
A692-96, 709-13, see pages 13-16 supra, and Jannotti
also confirmed his own power. A858-59, see page 21
supra. Further, each gave assurances that there would
be no obstacles or that the obstacles, if any, would be
manageable. Thus, each defendant’s appearance at the
Berclay in expectation of a payment and his conduct in
providing such assurances evidences more than mere
“passive” acceptance of the bribes,'° and falls wit’1in the
10. The district court's statement, without citation to the re-
cord, that the evidence “clearly” establishes that the defendants
A37
Hobbs Act definition of extortion under color of official
right.
Accordingly we hold that the district court erred in
dismissing Count III of the indictment.
Il.
ENTRAPMENT
As Justice Harlan noted, the meaning, purpose, and
application of the defense of entrapment in criminal
cases are problems that have sharply divided the Court.
See Lopez v. United States, 373 U.S. 427, 434 (1963).
See also United States v. Russell, 411 U.S. 423, 439-40
(Stewart, J., dissenting) (1973). To a large extent, that
division has centered on whether the controlling stand-
ard focuses on the conduct of the government (the ob-
jective test) or the predisposition of the defendant (the
subjective test). The legal principles which determine
the application of the entrapment defense in this case,
however, are not in serious dispute. The parameters of
the entrapment defense are largely to be found from the
four principal cases in which the defense has been con-
sidered by the Supreme Court, Sorrells v. United States,
287 U.S. 435 (1932); Sherman v. United States, 356
U.S. 369 (1958); United States v. Russell, 411 U.S. 423
(1973); and Hampton v. United States, 425 U.S. 484
(1976).
In Sorrells v. United States, where the Court first
recognized the defense of entrapment, the Court held
the defendant was entitled to have the jury consider
“made it very clear that the payments would not be necessary,” 501
F. Supp. at 1185, does not fairly represent the only possible con-
struction of the evidence, and the jury accepted a contrary con-
struction. The district court's statement is also inconsistent with the
court's own finding that the evidence permitted the inference that
the payments were “in exchange for the defendants’ assurances of
using their official positions to pave the way for expeditious comple-
tion of the project.” 501 F. Supp. at 1184.
A38
whether his acts of possessing and selling one-half gal-
lon of whiskey in violation of the National Prohibition
Act were instigated by the prohibition agent who im-
planted in the “mind of an innocent person the disposi-
tion to commit the alleged offense and induce its com-
mission in order that [Government officials} may
prosecute.” 287 U.S. at 442. The nature of the defense
was outlined more fully when the Court next considered
the defense a quarter of a century later in Sherman v.
United States. Chief Justice Warren, writing for the ma-
jority of the Court, stated that “[t]o determine whether
entrapment has been established, a line must be drawn
between the trap for the unwary innocent and the trap
for the unwary criminal.” 356 U.S. at 372. In concluding
that entrapment had been established as a matter of law,
the Court determined from the undisputed testimony of
the prosecution’s witnesses that the defendant was in-
duced to sell narcotics by the government informer and
that he was not predisposed, i.e., that he engaged in con-
duct he would not otherwise have attempted. The Court
noted, “Entrapment occurs only when the criminal con-
duct was ‘the product of the creative activity’ of law-
enforcement officials.” Id. (emphasis in original).
In United States v. Russell, the Court expressly dis-
approved of the decisions of the lower federal courts
which had expanded the entrapment defense beyond
the Court’s opinions in Sorrells and Sherman. Instead,
the Court reiterated that the defense was not of constitu-
tional dimension, and reaffirmed its prior opinions that
established that entrapment is a “relatively limited de-
fense”, 411 U.S. at 435, which cannot be used by a pre-
disposed defendant. Most recently, in Hampton v. Unit-
ed States, a majority of the Court, in two separate
opinions, upheld defendant's conviction arising from his
sales of heroin which had allegedly been procured from
a government informant, reaffirming once again the
A39
unavailability of the entrapment defense to a predis-
posed defendant.
Emerging from these cases are the principles which
guide our review of the evidence which defendants ar-
gue and the district court found established entrapment
as a matter of law. As the Court stated in Sorrells, “It is
well settled that the fact that officers or employees of the
Government merely afford opportunities or facilities for
the commission of the offense does not defeat the pros-
ecution.” 287 U.S. at 441. Entrapment occurs when a
defendant who was not predisposed to commit the crime
does so as a result of the government's inducement. The
entrapment defense thus focuses on “the intent or pre-
disposition of the defendant to commit the crime.” Unit-
ed States v. Russell, 411 U.S. at 429. As we have pre-
viously held, the government has the burden “to
disprove the whole [entrapment] defense beyond a rea-
sonable doubt,” United States v. Watson, 489 F.2d 504,
510 (3d Cir. 1973)."
Finally, although there may be instances where the
undisputed facts establish the entrapment defense as a
mater of law, as in United States v. Sherman, or where
the evidence is simply insufficient to submit the issue to
the jury, see, e.g., United States v. Armocida, 515 F.2d
49, 55-56 (3d Cir. 1975); United States v. Payseur, 501
F.2d 966, 970-71 (9th Cir. 1974); United States v.
Smith, 489 F.2d 1330, 1334-35 (7th Cir. 1973), cert. de-
nied, 416 U.S. 994 (1974), entrapment is generally a
jury question. See United States v. Lentz, 624 F.2d
1280, 1286 (5th Cir. 1980), cert. denied, 450 U.S. 995
(1981); United States v. Bocra, 623 F.2d 281, 288-89
(3d Cir.), cert. denied, 449 U.S. 875 (1980); United
States v. Twigg, 588 F.2d 373, 376 (3d Cir. 1978). See
also United States v. Klosterman, 248 F.2d 191, 194-95
11. See discussion of burden of proof in Murchison, The En-
trapment Defense in Federal Courts: Modern Developments, 47
Miss. L.J. 573, 604-06 (1976).
A40
(3d Cir. 1957); Tzimopoulos v. United States, 554 F.2d
1216, 1217 (1st Cir.) (per curiam), cert. denied, 434
U.S. 851 (1977). This court has held that a defendant is
entitled to an entrapment instruction,
however unreasonable the judge would consider a
verdict in favor of the defendant to be, when the ac-
cused shows (1) evidence that the Government ini-
tiated the crime, regardless of the amount of pres-
sure applied to the defendant, and (2) any evidence
negating the defendant’s propensity to commit the
crime.
United States v. Watson, 489 F.2d at 509.
The district court in this case submitted the issue of
entrapment to the jury following a jury charge on that
issue which is not here challenged. After the jury decid-
ed that defendants were not entrapped, the district court
reconsidered the propriety of such submission in ruling
on defendants’ motions for acquittal. The court summa-
rized the government’s evidence as relying exclusively
upon the fact that each defendant did accept money
from the agents. The district court agreed that “ijn
some situations . . . a defendant’s ready acquiescence
in the Government’s suggestion may be enough to justi-
fy a finding of predisposition.” United States v. Jannotti,
501 F. Supp. at 1200. See, e.g., Uniicd States v. Valen-
cia, 645 F.2d 1158, 1167-68 (2d Cir. 1980) (ready re-
sponse to drug sale proposal); United States v. Viviano,
437 F.2d 295, 299 (2d Cir.), cert. denied, 402 U.S. 983
(1971) (ready response to bribe solicitation).
However, the district court overturned the jury’s de-
cision. Although the court remarked that, “No-one who
has viewed the videotape evidence in this case could
avoid feelings of distress and disgust at the crass behav-
ior the tapes reveal,” it gave judgment for the defendants
because “|t]he evidence was, as a matter of law, insuffi-
cient to estab'ish the defendants’ predisposition beyond
A4l
a reasonable doubt.” 501 F. Supp. at 1200. In support of
that decision, the district court relied on three factors.
In my opinion, in their zeal to make sure that
the defendants would accept the tendered pay-
ments, the government agents offered such attrac-
tive inducements as to preclude any reliance upon
the defendants’ acceptance of the money as proof of
predisposition. In the first place, the amounts of-
fered were exceedingly generous. Standing alone,
the very amounts of the bribes were, to paraphrase
the language of the court in Scriber v. U.S., [4 F.2d
97 (6th Cir. 1925)], “a substantial temptation to a
first offense.”
In the second place, it was clear that the defen-
dants would not be asked or expected to do any-
thing improper on behalf of the proposed hotel ven-
ture; and they agreed to do nothing inconsistent
with their obligations as members of the City Coun-
cil, working for the benefit of their constituents.
Finally, and most importantly, they were led to
believe that if they did not accept the money, the
project would not come to Philadelphia. In the con-
text of the fiscal crises which beset all large cities
these days, and in the context of the problems of ur-
ban blight and decay, the governmental induce-
ment in this case was indeed calculated to
overwhelm.
Id. (emphasis added).
Before turning to that evidence, it will be useful to
reiterate briefly the applicable principles governing def-
erence to the jury’s findings. In ruling on a motion to
overturn a jury’s finding of predisposition the trial court
must view the evidence in the light most favorable to the
prosecution, and resolve all reasonable inferences there-
from in its favor. See Glasser v. United States, 315 U.S.
60, 80 (1942); . ‘ed States v. Artuso, 618 F.2d 192,
195-96 (2d Cir.), cert. denied, 449 U.S. 861 (1980).
A42
Credibility determinations are for the jury. See, e.g.,
United States v. Bocra, 623 F.2d 281, 289 (3d Cir. ), cert.
denied, 449 U.S. 875 (1980). Viewing the evidence in
this light, the trial court must uphold the jury’s verdict
unless no reasonable jury could conclude beyond a rea-
sonable doubt that the defendant was predisposed to
commit the offense for which he was convicted. See
Burks v. United States, 437 U.S. 1, 16 (1978). Obvious-
ly, in reviewing a district court’s decision to disregard a
jury verdict, we apply the same standard. Id. at 17; Unit-
ed States v. Dixon, 658 F.2d 181, 188 (3d Cir. 1981).
Thus, we must independently examine the evidence on
the three factors relied upon by the district court to de-
termine whether it was as overwhelming for the defen-
dants as the district court found. If not, it was error to
withdraw the decision on the predisposition issue from
the jury.
A.
The size of the payments
The undisputed evidence shows that Schwartz,
chairman of Philadelphia City Council, accepted a pay-
ment in cash of $30,000 from an F.B.I. agent posing as a
representative of the sheik, that he looked inside the en-
velope, fingered the bills, and licked the envelope closed.
The evidence also shows that Jannotti, a member of
Philadelphia City Counc. accepted a payment in cash
of $10,000 from the same F.B.I. representative, that he
placed the envelope in his pocket without opening it,
and that he declined to discuss the amount of the pay-
ment, repeating several times “We won't even discuss
iy
The district court, without any reference to the
record or any analysis of the issue, characterized the
amounts offered as “exceedingly generous” and deter-
mined that “the very amounts of the bribes were. . . ‘a
substantial temptation to a first offense.’ 501 F. Supp.
A43
at 1200. In effect, the district court held that no reason-
able jury could have found predisposition from the de-
fendants’ on-tape conduct because of the nature of the
inducement offered to the defendants.
Even if the dollar amount offered were relevant to
disprove predisposition, a question which we do not de-
cide, we find nothing in the record to support the district
court’s conclusion that in today’s inflationary times, city
councilmen would view sums of $30,000 or $10,000 as
so large or generous as to overcome an official’s natural
reluctance to accept a bribe. Certainly, the question of
the generosity of the sums given must be viewed in rela-
tionship to the circumstances of the acceptors. What
would be tempting to an office clerk would plainly not be
enough to tempt a millionaire. Yet the record is almost
bare of any evidence of the defendants’ financial situa-
tions. What the record does disclose hardly suggests that
either man was in dire straits financially. Schwartz was
a practicing lawyer until 1970 or 1971 and, until that
time, a partner of a large and active center city Philadel-
phia law firm. In his discussion with Wald, Schwartz
stated:
SCHWARTZ: And, uh, I was a senior partner
in a very large law firm, but decided to give up the
practice completely and sever my connections with
the firm to devote full time to my councilmatic du-
ties. I felt that, uh, it was the proper thing for me to
do, for my own discretion. The then mayor, who is
now out of office, Frank Rizzo, who was the former
police commissioner. And, uh, you know, you think
things out.
WALD: Uh-hmm.
SCHWARTZ: And fortunately, I didn’t have to
worry about earning a livelihood, I’ve, I've been a
real estate lawyer, corporate practice real estate, ad-
ministrative agency law. . . .
A44
A694-95. Furthermore, Schwartz did not expect to keep
the entire $30,000. As the district court found,
However, Schwartz accompanied Criden to a meet-
ing with the undercover agents on January 23,
1980, and the videotape of that meeting, together
with other evidence, demonstrates that Schwartz
knew he would be paid $30,000, and that the pay-
ment would be shared in some way with Criden.
501 F. Supp. at 1198.
Jannotti, who in addition to his City Council salary
also owned a bar, made a statement to an F.B.I. agent
during the subsequent investigation that his bar made
“more than $10,000 and there would be no reason for
him to take that kind of money.” A925.
In United States v. Myers, Nos. CR80-00249,
CR80-00253, CR80-00291, slip op. at 59 (E.D.N.Y. July
24, 1981), the district court was faced with a similar is-
sue and commented that today “$50,000 is simply not an
overpowering sum of money.” It also noted that other
legislators approached with bribes of sums greater than
$30,000 found themselves capable of rejecting the of-
fers. Id. at 53, 60.
The jury was well aware of the amount of the bribes
as well as the defendants’ stations in life. Since there is
nothing in the record to support the district court’s con-
clusion that the amounts involved were, as a matter of
law, so generous and enticing as to overcome any possi-
ble refusal by the defendants, the court’s action in over-
turning the jury’s resolution of this issue was plainly an
intrusion on the jury’s prerogative.
B.
The “benignity” of the payments
The second of the three factors which the district
court stressed in holding that the evidence was imsuffi-
cient as a matter of law to establish that the defendants’
A45
acceptance of the money showed their predisposition
was that “the defendants would not be asked or expected
to do anything improper on behalf of the proposed hotel
venture” and that “they agreed to do nothing inconsis-
tent with their obligations as members of the City Coun-
cil, working for the benefit of their constituents.” 501 F.
Supp. at 1200. The district court stated that “there was
no suggestion that the putative sheik required or expect-
ed any violation of the law in exchange for the payment;
he merely wished to be assured that he had ‘friends’ in
high places.” Id. at 1194.
There is a fundamental inconsistency in the district
court’s view of the evidence in this part of its opinion and
the court’s earlier statement in the same opinion that
[t]here is no dispute about the defendants’ receipt of
the payments, and the evidence permitted, although
it did not compel, the inference that the payments
represented bribes paid in exchange for the defen-
dants’ assurances of using their official positions to
pave the way for expeditious completion of the
pi vject.
501 F. Supp. at 1184 (emphasis added). The district
court never attempted to reconcile the two statements. It
may be that the district court, in stating that defendants
agreed to do nothing “improper”, was referring to the de-
fendants’ repeated statements on tape that they as-
sumed that the hotel was to be a legitimate venture and
their frequent comments that the project would be good
for Philadelphia. However, as the district court acknowl-
edged, the evidence permitted the inference that the
payments represented “bribes” to elected public officials
in return for the use of their official positions. We fail to
see how any court anywhere under any circumstances
can fail to characterize a public official’s acceptance of
payment to “pave the way for expeditious completion of
the project” as “improper”.
A46
The government argues that defendants’ arrival at
the hotel room after 10 o'clock in the evening to meet
with total strangers, and the statements of Criden and
Johanson indicating that Schwartz and Jannotti would
be ready and willing to accept payments in return for po-
litical favors and that they had done so in the past, see,
e.g., A497-500, support the jury’s determination that the
defendants were predisposed. However, even if we were
to look only at the defendants’ own statements and ac-
tions shown on the tapes, there is no justification for tak-
ing from the jury the question of the nature of defen-
dants’ undertaking.
To recapitulate some of the relevant evidence, early
in the meeting at the Barclay Hotel between Schwartz,
Wald and Criden, Wald made it clear that he was seek-
ing political favors in connection with the hotel venture.
Thus, whatever Schwartz’ expectations actually were
about the services he was to perform for the anticipated
fee following Judge Shiomos’ references to a “consulting
opinion”, a reasonable jury could have found that in the
course of Schwartz’ meeting at the Barclay it became
clear that what was at stake was the exchange of future
political favors by the President of Philadelphia’s City
Council for cash to be paid on the spot. See pp. 12-17
supra.
Furthermore, in light of Schwartz’ response to
Wald’s overture (“we got five or six [city council] mem-
bers that came in. . . you tell me your birth date. I'll
give them to you for your birthday,” A695-6), a reason-
able jury could find that Schwartz quickly dispelled any
notion that he thought he was meeting Wald for legiti-
mate “consulting” work. City Council members are
simply not “given” as birthday gifts to prospective
enterpreneurs as part of a “consultation.”
The evidence as to Jannotti, if not quite as strong as
that against Schwartz, also could be construed by a rea-
sonable jury as proving that the payment was made for
A47
political support, for Jannotti’s vote. thereby belving anv
suggestion that it was made for “friendship”. With
Jannotti as with Schwartz, Wald explained “I'm only
here for one reason, to bring back some assurances,”
A849. and characterized the understanding between
them as 2 “cash business transaction” in which Jannotti
“guaranteed. . . ihat we don’t have a problem in Phila-
delphia. . . .” A863. A reasonable jury could view the
assurances given by Jannotti as his willingness to com-
mit his City Council vote, A853-54, and to use his politi-
cal influence. A863-67. See pp. 19-24 supra.
The district court stressed the concern expressed by
both Schwartz and Jannotti that the project be “legal”
and “legitimate”. As the evidence shows. Schwartz ex-
pressed concern that the hotel was not to be used for im-
moral purposes. and Jannotti was concerned that the ho-
tel was not to be used for gambling. While the
defendants’ statements may indicate their unwillingness
to support the project if it were to be used for such illegal
purposes. either because they were interested in Phila-
delphia’s welfare or because such use would become a
matter of public knowledge. they fail to negate the per-
missible inference that both men knew they were acting
improperly in accepting money in return for their sup-
port and influence. As this court has previously held, it is
neither material nor a defense to bribery that “had there
been no bribe, the jpublic official} might, on the avail-
able data, lawfully and properly have made the very rec-
ommendation that [the briber| wanted him to make.”
United States v. Labovitz, 251 F.2d 393, 394 (3d Cir.
1958). Judge Hastie, writing for the court. set forth the
rationale for that holding:
It is a major concern of organized society that the
community have the benefit of objective evaluation
and unbiased judgment on the part of those who
participate in the making of official decisions.
Therefore, society deals sternly with briberv which
A48
would substitute the will of an interested person for
the judgment of a public official as the controlling
factor in official decision.
Id.
The district court, in discussing some of the evi-
dence, stated that Schwartz’ words and actions during
the meeting, as disclosed on the videotape, could be
interpreted to mean either “that he was rendering legal
advice and advice as an expert on city government and
reai estate development, in exchange for a consulting
fee” which would “merely” violate the City Charter’ pro-
hibition against conflicts of interest, or “that he was ac-
cepting a bribe for assuring his official support of a
project he would have been willing to support in any
event.” Id. at 1198.
In the posture of the case before us, we cannot ac-
cept the “consulting fee” view of the payment to
Schwartz (no similar contention having been made as to
Jannotti). It has often been stated by this court that a de-
fendant who chooses to defend on the ground of entrap-
ment must admit that there were present all the ele-
ments of the crime with which he or she was charged
United States v. Shoup, 608 F.2d 950, 964 (3d Cir
1979); United States v. Levin, 606 F.2d 47, 48-49 (3d
Cir. 1979) (per curiam); United States v. Watson, 489
F 2d 504, 507 (3d Cir. 1973). The district court adopted
a restrictive view of the holdings in these cases by inter-
preting them as conditioning the entrapment charge on
defendants’ admission only of the operative facts. 501 F
Supp. at 1201. Subsequent to the district court's opin-
ion, we considered whether an entrapment defense re-
quired admission of the relevant mens rea and stated
that the entrapment de: nse “requires admission of guilt
of the crime charged and all of its elements, including
the required mental state.” United States v. Hill. 655
F.2d 512, 514 (3d Cir. 1981). Thus, our precedent sug-
gests that since acceptance of a bribe was an element of
A49
the crime with which Schwartz was charged, Schwartz
was required to forego the argument that receipt of the
money was a benign “consulting fee” if he was to rely on
the entrapment defense. But see United States v.
Demma, 523 F.2d 981 (9th Cir. 1975) (en banc).
The other difficulty in the willingness of the district
court to view the payments as benign is the obvious sub-
stitution of its view for that of the jury. As the district
court recognized, the jury accepted the view that the
payments were not “consulting fees” but were bribes.
501 F. Supp. at 1198-99. The jury was expressly in-
structed that it must determine whether each defendant
understood that the money was being paid to influence
his vote or conduct. The court charged:
You would ask yourselves at the conclusion of the
transaction and in the totality of the circumstances:
Did that particular defendant understand that mon-
ey was being paid to him to influence his vote, to in-
fluence his conduct in his official position or was
this a situation in which the defendant understood
merely that the money was to be paid in order to en-
able the Sheik’s representative to report back to the
Sheik that he had made friends in accordance with
the Arab way of doing business? That is, in the total-
ity of the circumstances, both the defendant and the
Arab representatives understood that the defendant
had been bought and that his support or at least as-
surance of continuing support were based at least in
part upon the fact that he had received the money or
was this a situation in which it was understood be-
tween the representative and the defendant that
there was no corruption involved, that this was sim-
ply something which was made necessarv in order
to encourage the Sheik to go ahead with the project
but that as between the representatives and the
councilmen it was understood that there was no
curruption involved?
ASO
A1358-59. In view of the jurv’s adverse determination
that the payments were not for “friendship” but were to
improperly influence defendants in the exercise of their
official positions. the district court’s substitution of its
view of the evidence in deciding that as a matter of law
there could be no predisposition represented an unfortu-
nate usurpation of the jurv’s prerogative.
i.
The “contingency” of the hotel project. i.e..
“the Arab mind”
The tinal factor, and the one considered “most im-
portant” by the district court in its assessment of the
“overwhelm|ing!” inducement offered by the F.B.I.
agents posing as the sheik’s representatives, was the
fact. as described by the district court, that defendants
were “led to believe that if they did not accept the mon-
ey. the project would not come to Philadelphia.” 501 F.
Supp. at 1200. The district court. in reviewing the entire
undercover operation which has come to be known as
ABSCAM., stated: “Perhaps the crucial aspect of the un-
dercover operation was its emphasis upon ‘the Arab
mind,’ the ‘Arab way of doing business.” A constant
theme of the agents’ representations was that their
principals would not undertake any project unless first
assured of the ‘friendship’ of the persons with whom
they were dealing.” Jd. at 1194 (emphasis added).
This conclusion suffers from the failure to cite to
evidence that any such representation was ever made to
or communicated to defendant Schwartz. We have
found no such evidence. In fact. early in the meeting be-
tween Schwartz and Wald, Schwartz was told that Phila-
delphia had already been selected:
WALD: Well, what | have been instructed to do
and the purpose for ah my visits to Philadelphia is to
firm up uh. what we consider to be a major invest-
A51
ment here and uh the gentleman cares to make a
major investment here because he seems to like
Philadelphia. and he has been told that it would uh
be in his best interest to have an investment. uh. in
an area where he. uh. would like to take up rather
permanent residence and Philadelphia is tt.
A690.
In an effort to point to evidence which would sup-
port the district court’s conclusion that Schwartz was led
to believe that if defendants did not accept the money
the project would not come to Philadelphia. Schwartz re-
fers to statements by Wald that his emplover was inter-
ested in Philadelphia. had to be “happy”, wanted to “take
care of any potential problems long before thev exist”
and remarks regarding the need for “assurances.”
Schwartz has not. nor have we. found any statement in
which Wald made the representation to Schwartz that
the project was contingent on his acceptance of the
money. While Wald may have made representations to
others that the hotel project was contingent, we have not
been referred to any evidence that such statements were
communicated to Schwartz. If Criden were supposed to
be the alleged conduit. he failed to testifv to that effect
since, notwithstanding the grant of defense immunity to
Criden, neither the defendants nor the government
called him as a witness. '*
It may be that the district court, aware of similar
representations with regard to the “Arab mind” which
were made to other ABSCAM participants, interpolated
them as to Schwartz. Whatever the explanation, since
this was the “most important” factor to show that the ap-
12. Prior to trial, the district court stated that the content of
the defendants’ off-camera discussions with Criden was of critical
importance to defendants’ entrapment defense. A102. After the
close of the government's case-in-chief. the court granted Criden
defense immunity to permit him to testify about these conversa-
tions. A996- 1003.
A52
peal to civic duty was too overwhelming an inducement
for any public official to resist, once this factor is negat-
ed, the house of cards built upon it collapses.
With regard to Jannotti, there is no question that a
reference to the “Arab mind” was made to him, and that
Wald also represented that this “is the method of busi-
ness that these people are use [sic] to, and that is how
they conduct business ... .” A860. See pp. 21-22
supra. Whether these statements can be construed as a
representation that only if Jannotti accepted the money
would the hotel come to Philadelphia is somewhat ques-
tionable. Such a conclusion is even more equivocal in
light of the following colloquy which took place before
the reference to the “Arab mind”:
JANNOTTI: Who could refuse a project like
that?
WALD: Nobody could, that’s my point, alright,
but I've been told the City of Philadelphia is where
this, ah, this construction project is going. | mean
this is where he is going to be. This is where he
wantsit....
A852 (emphasis added). Later in the meeting Wald reit-
erated that “Philadelphia has already been sold, to the
man.” A876. See also A864, A880. Thus, even as to
Jannotti, at most the evidence presents the basis for dif-
fering arguments to the jury as to the interpretation to
be placed on the conversations.
In fact, the issue was presented to the jury. The dis-
trict court instructed on this precise issue as follows:
. . . depending on how you interpret the testimony,
you might draw the inference that the net effect of
the totality of the circumstances considering every-
thing that the agents said in the course of these
meetings the defendants were led to believe that
unless they were willing to accept money and give
assurances this hotel project would not be coming
A53
into Philadelphia. . . . |Djepending upon how you
interpret what was said you could draw either con-
clusion, and it is up to you to decide which one is
appropriate. .
A1355-56. The decision of the jury. adverse to the defen-
dants, demonstrates its resolution of the differing infer-
ences which might be drawn.
D.
Acceptance of the money by Schwartz and Jannotti
To summarize, the district court found that the ac-
ceptance of the money by Schwartz and Jannotti was in-
sufficient evidence of their predisposition to take bribes
because the government offered “such attractive in-
ducements” as were bound to overwhelm. 501 F. Supp.
at 1200. We conclude that the jury could have found
that the evidence fails to show “such attractive induce-
ments” as would overwhelm most honest, responsible
public officials, no matter how deep-seated their civic
duty. Thus, we return to the initial proposition, that the
acceptance of the money itself may be sufficient to show
predisposition.
In certain types of crimes, it is often possible for the
government to show predisposition by proof of the defen-
dant’s prior convictions or his or her participation in
similar transactions. See, e.g., United States v. Ordner,
554 F.2d 24, 28 (2d Cir.), cert. denied, 434 U.S. 824
(1977); United States v. Lemons, 470 F.2d 135 (3d Cir.
1972) (per curiam), cert. denied, 412 U.S. 929 (1973).
Such evidence would be extremely difficult te produce
in the case of acceptance of a bribe by a public official.
Because such officials are often intelligent, educated
and worldly, it is unlikely that they will accept money
from those to whom they have not had “safe” introduc-
tions and who, because they are also implicated, are un-
likely to report to the authorities. In addition, because
A54
the crime has no direct victim, its occurrence leaves no
public trail which cries for investigation. Since the ulti-
mate factual determination is whether the defendant
was “ready and willing to commit the crime if an oppor-
tunity should be presented,” as distinguished from hav-
ing been “corrupted by some overreaching or special in-
ducement,” United States v. Watson, 489 F.2d 504, 509
(3d Cir. 1973), the very acceptance of a bribe by a public
official may be evidence of a predisposition to do so when
the opportunity is presented.’
li: resolving the issue of vredisposition, the jury
must determine the defendants subjective intent. Ex-
cept in unusual cases, intent can be proven only through
circumstantial evidence. The factors ordinarily relevant
to the jury’s inquiry, particularly the defendant’s words
and mannerisms at the time of the offense, are generally
available only through the testimony of one or more of
the participants. The jury has no opportunity to hear the
voice inflections or see the mannerisms of the partici-
pants. This case is unique in that through the videotape
the jury could observe the entire criminal transaction
and many of the events leading up to it. It could observe
whether the defendants demurred or showed any reluc-
tance when the money was handed to each of them. The
jury could observe the amount of pressure, overt or tacit,
if any, placed on the defendants to accept the bribes. In
short, this jury had in its hands some of the most valu-
13. Researchers have found it difficult to locate a case in
which the defense of entrapment has been successfully interposed
in prosecutions of public officials for accepting, agreeing to receive,
or soliciting bribes. See Annotation, Entrapment to Commit Bribery
or Offer to Bribe, 69 A.L.R.2d 1397, 1431 (1960). Defendants have
cited to no such case, nor has our independent investigation uncov-
ered one. This is to be contrasted with the occasional successful en-
trapment defense by those persons who have been enticed by public
officials to make the payments. See, e.g., United States v.
Klosterman, 248 F.2d 191 (3d Cir. 1957). But see United States v.
Bocra, 623 F.2da 281 (3d Cir.), cert. denied, 449 U.S. 875 (1980).
A55
able tools possible with which to conduct its inquirv into
the state of mind of each defendant, the crucial factor in
an entrapment defense.
The Ninth Circuit recently reviewed the factors
which must be considered in determining predisposi-
tion, and concluded that, “|w\|hile none of the factors
alone indicates either the presence or absence of predis-
position, the most important factor. as revealed by Su-
preme Court and other decisions, is whether the defen-
dant evidenced reluctance to engage in criminal activity
which was overcome by repeated Government induce-
ment.” United States v. Reynoso-Ulloa, 548 F.2d 1329.
1336 (9th Cir. 1977), cert. denied, 436 U.S. 926 (1978).
The court stated, “We have found no case in which the
defense of entrapment (as opposed to cases dealing with
due process principles) was successful where the defen-
dant had not indicated reluctance to engage in illegal ac-
tivity.” Id. at 1336 n.11.
The facts of this case are unlike any of the few in
which the entrapment defense has been successful. [n
United States v. Klosterman, 248 F.2d 191, 193 (3d Cir.
1957), the government contacted a_ reluctant
intermediary eleven times before he agreed to make the
necessary introduction. The other defendant in
Klosterman was, as the subject of an IRS investigation
which had been continuing “for an unusual length of
time,” under anxiety and therefore “more susceptible” to
the government’s persuasion. Id. at 196. In Sorrells v.
United States, the agent “lured” defendant by “repeated
and persistent solicitation in which he succeeded by
taking advantage of the sentiment aroused by
reminiscences of their experiences as companions in
arms in the World War.” 287 U.S. at 441. In Sherman v.
United States, the defendant. after rebuffing numerous
requests by the government agent. finally relented and
sold drugs to the agent. who had plaved upon the deten-
dant’s sympathy bv predicating his request upon his sul-
A56
fering from lack of narcotics. 356 U.S. at 373. See Wall v.
United States, 65 F.2d 993 (5th Cir. 1933). The situa-
tion here is obviously not analogous. Defendants in this
case point to no statements or gestures which indicate
any reluctance whatsoever to accept the proffered pay-
ments.
Although we have concentrated primarily on defen-
dants’ acceptance of the payments to demonstrate that
predisposition was a jury issue, even were we to disre-
gard certain other evidence relied on by the government
to which defendants vigorously object, there was addi-
tional evidence which the jury may have credited in
finding predisposition. Ellis Cook, a lawyer associated
with Criden, testified that Criden told him that he had
given money to Schwartz in return for Schwartz’ intro-
ducing him to Jannotti. A607. This payment of what
might be considered a “finder’s fee” was made to
Schwartz shortly after he had received the $30,000 pay-
ment from the agents. Schwartz’ acceptance of a pay-
ment for introducing Criden to Jannotti, another public
official, so that Jannotti could participate in a similar
transact
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