Petition for Writ of Certiorari — Jannotti v. United States

o Office - Supreme Court, U.S.

FILED

53-1892 MAY 18 1984

No.___

ALEXANDER L. STEVAS.

CLERK

IN THE

Supreme Court of the United States

October Term, 1983

GEORGE X. SCHWARTZ,

Petitioner

vz.

UNITED STATES OF AMERICA,

| Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

RICHARD A. SPRAGUE

STEVE ALEXANDER

Suite 400, Wellington Building

135 S. 19th Street

Philadelphia, Pennsylvania 19103

(215) 561-7681

Attorneys for Petitioner

George X. Schwartz

Of Counsel:

SPRAGUE, LEVINSON & THALL

Suite 400, Wellington Building

135 S. 19th Street

Philadelphia, Pennsylvania 19103 May, 1984

PACKARD PRESS / LEGAL DIVISION, 10th & SPRING GARDEN STREETS, PHILA., PA. 19123 (215) 236-2000

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 ex-

ceeding that degree of outrageousness which mandates

dismissal of this prosecution?

2. Whether a “bifurcated” entrapment instruction,

which submits to the jury a question of law reserved to

the court, shifts the burden of proof and potentially with-

draws the entrapment defense from the jury’s consider-

ation, is constitutional error which must be reversed un-

less harmless beyond a reasonable doubt? And if so,

whether such instruction in the instant case was harm-

less?

3. Whether, where the evidence of governmental

inducement is overwhelmimg, the government can

meet its burden to disprove entrapment when the only

proof of predisposition offered is the fact that the defend-

ant committed the criminal act, which proof demon-

strates neither his pre-existing criminal inclination nor

familiarity with criminal techniques and procedures,

and was manufactured, in its entirety, by the govern-

ment?

4. Whether, given the constitutional limitations in-

herent in Congress’ power to legislate under the com-

merce clause, federal jurisdiction under the Hobbs Act

can be predicated upon wholly fictitious facts and cir-

cumstances 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 in-

jected into the transaction in question by the govern-

ment?

5S. Whether, under the Hobbs Act, criminal convic-

tions for extortion can be sustained absent proof of a de-

mand or request by the defendants charged?

ii

TABLE OF CONTENTS

QUESTIONS PRESENTED .....--- eee eee rere i

TABLE OF AUTHORITIES .......0 eee c eee eee eeeces iii

OPINIONS BELOW . 0... ccc ce cree creer ween 1

JURISDICTION 20. ee eee eee eee reece 2

CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED 3

STATEMENT OF THE CASE ....- eee eee errr er eeees 3

REASON FOR GRANTING THE WRIT .....-- 222s eee 9

The Government’s Conduct of ABSCAM Violated the Most

Basic Standards of Due Process and Fundamental

Fairness, Reaching and Exceeding That Degree of

Outrageousness Which Mandates Dismissal of This

— rr vera, eee re yer eee ee 9

The District Court’s “Bifurcated” Entrapment Charge Er-

roneously Submitted To The Jury A Question Of Law

Reserved To The Court, Shifted The Burden Of Proof

To The Defense, And Potentially Withdrew From The

Jury Petitioner’s Crucial Entrapment Defense. This

Comprised Constitutional Error But The Third Cir-

cuit Abnegated Chapman’s “Harmless Beyond A Rea-

sonable Doubt” Standard. ...........-.05555055 14

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 Con-

viction in an Entrapment Case on Proof of Commis-

sion of the Criminal Act Alone. ...........--++:> 21

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 Legisla-

tion Enacted Under the Commerce Clause,

Misapplies Prior Holdings of This Court, and Is Erro-

neous Under the Facts of This Case. .........--- 24

A Conviction for Extortion Under the Hobbs Act Absent

Proof of Inducement by a Defendant Sould Not Be

Permitted, and Clarification of This Issue Is Essen-

Oe oe ceo a wk Oe SRETESS SEED OTE OS CERO 28

QOMCERIGOIOE nn oo ns Sn bcd ec acbae tes 28 ee ee eee eee 30

TABLE OF AUTHORITIES

Cases: Page

Berrier v. Egeles, 583 F.2d 515 (6th Cir.), cert. denied, 499

U.S. 055, 80 S.Ct. 354 (1078) ..... 2... eee. 17

Casey v. United States, 276 U. S. 413 (1928) .......... 10

Chapman v. California, 386 U.S. 18, 87 S.Ct. 824 (1967) . 19

Davis v. United States, 160 U.S. 469, 16 S.Ct. 353 (1895) 17

Government of the Virgin Islands v. Cruz, 478 F.2d 712 (3rd

I VE ae SES geile a rn 18

Greene v. United States, 454 F. 2d 783 (9th Cir. 1971) ...10, 11

Hampton v. United States, 425 U. S. 484 (1976) ....... 9, 10

Notaro v. United States, 263 F.2d 169 (9th Cir., 1966) ... 19

Olmstead v. United States, 277 U. S. 438 (1928) ........ 10

People v. Dioguardi, 8 N. Y. 2d 260, 203 N. Y. S. 2d 870, 168

Nee ec padi masesac 29

Perez v. United States, 402 U. S. 146 (1971) ........... 24

Sherman v. United States, 356 U. S. 369 (1958) ........ 10

Sorrells v. United States, 287 U. S. 435 (1932) ......... 10, 21

Taylor v. Kentucky, 436 U.S. 478, 98 S.Ct. 1930 (1978) .. 17

United States v. Adcock, 558 F. 2d 397 (8th Cir.), cert. de-

gg EE ee re 29

United States v. Addonizio, 451 F. 2d 49 (3d Cir.), cert. de-

eR ee 29

United States v. Alston, 551 F.2d 315 (D.C. Cir., 1976) ..18, 19

United States v. Ambrose, 483 F.2d 742 (6th Cir., 1973) . 19

United States v. Archer, 486 F. 2d 670 (2d Cir. 1973). 10, 13, 27

United States v. Benavidez, 558 F.2d 308 (5th Cir., 1977) .. 18

United States v. Bocra, 623 F. 2d 281 (3rd Cir.), cert. denied,

EE eee eee 10

United States v. Booz, 451 F.2d 719 (3rd Cir., 1971) ..... 18

United States v. Cerilli, 603 F. 2d 415 (3d Cir. 1979), cert.

denied, 444 U. S. 1043 (1980) ................... 25

United States v. Corrigan, 548 F.2d 879 (10th Cir., 1977) . 17

United States v. Dearmore, 672 F.2d 738 (9th Cir., 1982) . 19

United States v. Duhon, 565 F. 2d 345 (5th Cir.), cert. de-

Oc cc cc acce 30

United States v. Feola, 420 U. S. 671 (1975) ..... 24, 26, 27, 28

United States v. French, 628 F. 2d 1069 (8th Cir.), cert. de-

EE 28

United States v. Gerald, 624 F. 2d 1291 (5th Cir. 1980) .. 30

United States v. Hathaway, 534 F. 2d 386 (ist Cir.), cert.

ee 29

United States v. Hedman, 630 F. 2d 1184 (7th Cir. 1980),

cert. denied, 450 U. S. 965 (1981) ................ 29

ih.

iv

TABLE OF AUTHORITIES (Continued)

Cases: (Continued) Page

United States v. Hyde, 448 F. 2d 815 (5th Cir. 1971), cert.

SE, re ak es ee CD i kK Ks vase peeks ds bs 29, 30

United States v. Jannotti and Schwartz, __, F.2d ___,,

Nos. 83-1093 & 1094, slip op. (3rd Cir., filed 21 Febru-

ary 1984) (“Schwartz II”), reprinted at PA___..... . passim

United States v. Jannotti and Schwartz, 673 F.2d 578 (3rd

Cir., 1981), cert. denied, 457 U.S. 1106, 102 S.Ct. 2906

(1982) (“Schwartz I”), reprinted at PA____........ passim

United States v. Jannotti and Schwartz, 501 F.Supp. 1182

(E.D. Pa., 1980), rev’d 673 F.2d 578 (3rd Cir., 1981),

cert. denied, 457 U.S. 1106, 102 S.Ct. 2906 (1982), re-

ORE BI a o's cere cigs has 0s eK be bade passim

United States v. Johnson, 565 F. 2d 179 (1st Cir. 1977), cert.

GORE ee Ses. LD. BANA Aa os wa ree i Ki cess 10

United States v. Leja, 563 F. 2d 244 (6th Cir. 1977), cert. de-

ole, GOS Ge. Ei See oa Soe Pacdwes awascicse 10

United States v. Phillips, 577 F. 2d 495 (9th Cir.), cert. de-

wll, Gap hs FA Se Ce... as Wa eS adis Os awenss 25

United States v. Prairie, 572 F. 2d 1316 (9th Cir. 1978) .. 10

United States v. Read, 658 F.2d 1225 (7th Cir., 1981) ... 17

United States v. Reifsteck, 535 F. 2d 1030 (8th Cir. 1976) . 10

United States v. Rindone, 631 F. 2d 491 (7th Cir. 1980) . 25

United States v. Russell, 459 F. 2d 671 (9th Cir. 1972), rev'd

Cia a a Ge ED dk wae o esd hoe ebe kes as. 10

United States v. Spagnolo, 546 F. 2d 1117 (4th Cir. 1976)

(per curiam), cert. denied, 433 U. S.909(1977) .... 25

United States v. Staszcuk, 517 F. 2d 53 (7th Cir.) (en banc),

cert. denied, 423 U. S. 837 (1975) ...... 24, 25, 26, 28, 29

United States v. Tate, 554 F.2d 1341 (5th Cir., 1977) .... 19

United States v. Twigg, 588 F. 2d 373 (3d Civ. 1978) .... 10

United States v. Watson, 489 F. 2d 504 (3d Cir. 1973) ...18, 21

United States v. West, 511 F. 2d 1083 (3d Cir. 1975) .... 10

United States v. Wolffs, 594 F.2d 77 (Sth Cir., 1979) .... 19

Williamson v. United States, 311 F. 2d 441 (5th Cir. 1962),

on appeal after remand, 340 F. 2d 612 (5th Cir.), cert.

EE, Gee Save RD _ Gis hw ce wh do ome waiss 11

Vv

TABLE OF AUTHORITIES (Continued)

Page

Constitution and Statutes:

United States Constitution, Amendment V ............. 3

United States Code, Title 18:

FS a rr er 26

18 U. S. C. § 1951 (The “Hobbs Act”).............. passim

RE ge lg rere eee passim

United States Code, Title 28:

28 U.S.C. § 1254(1)

No.

IN THE

Supreme Court of the United States

October Term, 1983

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

Petitioner above named respectfully prays that a

writ of certiorari issue to review the judgment and opin-

ion of the United States Court of Apr als for the Third

Circuit, entered in this case on 21 February 1984,

rehearing and rehearing en banc denied on 20 March

1984.

OPINIONS BELOW

The Third Circuit’s order entered 28 March 1984,

staying issuance of the mandate until 19 May 1984, is

reprinted at PA-43.'

1. References to the Appendix to this Petition for Writ of Cer-

tiorari are designated “PA____.”.

2

The Third Circuit's order entered 20 March 1984,

denying rehearing and rehearing en banc, is reprinted at

PA-42.

The Third Circuit's judgment entered 21 February

1984, on re-appeal after remand and affirming the dis-

trict court’s entry on 31 January 1983 of judgment of

conviction and imposition of sentence after remand, is

reprinted at PA-41. The opinion of the panel of the Third

Circuit filed 21 February 1984 (per Seitz, C.J.)

(“Schwartz II”) is not yet reported but is reprinted at

PA-1.

The district court’s judgment and imposition of sen-

tence entered 31 January 1983 on remand (E.D. Pa., per

Fullam, J.) is reprinted at PA-44.

The Third Circuit's opinion en banc filed 11 Febru-

ary 1982 (per Sloviter, J., Aldisert and Weis, J.J., dissent-

ing) (“Schwartz I”), reversing the district court’s order

entered 26 November 1980 (setting aside the jury’s ver-

dict of conviction, dismissing the Hobbs Act conspiracy

count and granting a judgment of acquittal n.o.v.), is re-

ported sub nom United States v. Jannotti, 673 F.2d 578

(3rd Cir. 1981), cert. denied, 457 U.S. 1106, 102 S. Ct.

2906 (1982), reprinted at PA-47.

The district court’s opinion and order entered 26

November 1980, setting aside the jury’s verdict of con-

viction, etc., is reported sub nom. United States v.

Jannotti, 501 F.Supp. 1182 (E.D. Pa. 1980) (per

Fullam, J.), rev'd, 673 F.2d 578 (3rd Cir. 1981), cert. de-

nied, 457 U.S. 1106, 102 S.Ct. 2906 (1982), reprinted at

PA-175.

3

JURISDICTION

The Third Circuit’s judgment entered 21 February

1984 affirmed the district court’s judgment of conviction

and imposition of sentence on remand. Petitioner

Schwartz’ timely filed petition for rehearing and sugges-

tion of rehearing en banc was denied by order entered 20

March 1984. The 60 days in which to file a petition for

writ of certiorari ended on Saturday, 19 May 1984. The

instant Petition for Writ of Certiorari, filed on or before

19 May 1984, is timely.

This Court’s jurisdiction is invoked under 28 U.S.C.

§1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The United States Constitution, Amendment V, re-

printed at PA-273.

The Hobbs Act, 18 U.S.C. §1951, reprinted at PA-

273.

The Racketeer Influenced and Corrupt Organ-

izations (“RICO”) Act, 18 U.S.C. §1962, reprinted at

PA-274.

STATEMENT OF THE CASE

A. Procedural Background.

Petitioner Schwartz, along with other Philadelphia

ABSCAM victims, was indicted for conspiracy under the

Hobbs Act (18 U.S.C. §1951) and RICO Act (18 U.S.C.

§1962), and also for attempts to violate the Hcbs Act.

The district court dismissed the attempt charges prior to

trial and the government did not appeal. Schwartz was

tried jointly with Philadelphia ABSCAM victim Harry

Jannotti on the two conspiracy counts. After a six day

4

jury trial, petitioner Schwartz was convicted of both the

Hobbs Act and RICO conspiracy charges.”

After verdict, Schwartz and Jannotti moved for

judgments of acquittal. By Memorandum and Order en-

tered 26 November 1980, the district court set aside the

verdict in its entirety, dismissed the Hobbs Act conspir-

acy counts for lack of jurisdiction, and granted the mo-

tions for judgment of acquittal. 501 F.Supp. 1182, PA-

175.

The government appealed and the United States

Court of Appeals for the Third Circuit, sitting en banc,

reversed the district court’s decision by a seven-to-two

vote (Schwartz I, 673 F.2d 578, Pa-47) and directed

reinstatement of the jury verdict.

Schwartz and Jannotti jointly petitioned this Court

for a writ of certiorari (No. 81-1899, Petition for Writ of

Certiorari), which the United States opposed on the

ground that review by this Court at that time was prema-

ture because judgment and sentence had not then been

imposed (id., Memorandum for the United States in Op-

position). This Court denied certiorari. 457 U.S. 1106,

102 S.Ct. 2906 (1982).

On remand by the Third Circuit to the district court,

the district court denied Schwartz’ additional post-trial

motions, reinstated the jury’s verdict and entered judg-

ment and imposed sentence. PA-44. On a second appeal,

the Third Circuit affirmed. Schwartz I], F.2d :

PA-1. This timely petition for writ of certiorari followed.

B. Factual Background.

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

2. Co-defendant Harry Jannotti was convicted by the jury of

the Hobbs Act conspiracy but acquitted of the RICO conspiracy.

5

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

targets of the scheme. Substantial legal fees, lucrative

investment opportunities, and large amounts of money

were offered to the victims of the scheme, and the im-

pression of an Arab shiek with vast amounts of money to

spend freely was continually fostered by the F. 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 peti-

tioner Schwartz and Harry Jannotti into the ABSCAM

net. Criden, as were various other middlemen, was com-

pensated by contingent fee based upon the number of

officials he could produce for the government. He also

received continuing promises of substantial, future legal

fees and other lucrative investment opportunities.

Criden was early taught that the officials who were

brought in to meet the sheik’s “associates”—the F. B. I.

agents—need only come on strong and emphasize their

importance, but that no official would be called upon to

perform. See PA-197-201. The F. B. I. accepted without

question Criden’s representations regarding the honesty

and reputations of public officials whom he was to

produce, despite knowledge that on at least one occasion

3. For the District Court’s discussion of the “Arab mind” tech-

nique and the manner in which it was employed, see PA-197-198.

6

Criden had attempted to deceive them in order to obtain

one of his contingent fees.

The Philadelphia aspect of ABSCAM was a limited

concession to the lobbying of the local United States At-

torney, and was designed to test the integrity of city offi-

cials.? No infiltration or discovery of ongoing criminal

activity took place or was intended. Rather, the govern-

ment created a criminal enterprise and actively at-

tempted to involve innocent persons in its operations.

The scenario centered upon the sheik’s plan to construct

a fictitious $35 million hotel in Philadelphia, with its re-

sultant, major impact on the city’s economy. But the rec-

ord is devoid of any evidence that payments of money to

any city official were either sought or required by anyone

other than the government, or that any Philadelphia offi-

cial would have to be “dealt with” in connection with the

proposed hotel project.

On 18 January 1980, Criden met with F. B. I. Agent

Michael Wald, who passed himself off as a representa-

tive of the fictitious sheik.> Wald pressed Criden for in-

troductions to various municipal officials. He specifically

requested a meeting with petitioner Schwartz and

Ceuncilman Louis C. Johanson, Criden’s law partner,

ciespite Criden’s protestations that their assistance was

unnecessary given the sheik’s prior relationship with

two Philadelphia congressmen. Wald unilaterally raised

the issue of payments and agreed to pay Criden $10,000

for the production of Schwartz and Johanson. Criden

had never met nor 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-

4. The Philadelphia U. S. Attorney testified that his office ac-

tively 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.

5. The meeting with Criden, as were the meetings with peti-

tioner Schwartz and Harry Jannotti, was videotaped by the govern-

ment.

-

‘

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

legal services which his le-v firm would perform on the

hotel project. Johanson also testified that as the meeting

progressed, 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 in-

troduction to Schwartz or Jannotti, since he felt they

were good men whom he did not want to involve in im-

proper activities.

On 23 January 1980, Schwartz met with Criden and

Waild.° During the meeting, Schwartz repeatedly

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 le-

gitimate project could be overcome administratively.

Schwartz also advised Wald of his power and influence

within City Council and that he, Schwartz, had pre-

viously rendered assistance to other developers of major

construction projects in Philadelphia. Wald assured

Schwartz that the project was a legitimate one but em-

phasized that, if the project was to be built in Philadel-

phia, 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 pay-

ments, Schwartz made it clear that money was not the

motivating factor behind his agreement to assist with

6. Criden had obtained an introduction to Schwartz through a

mutual friend, Philadelphia Common Pleas Court Judge Thomas

Shiomos. Shiomos testified that Criden told him that Criden’s cli-

ents 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. PA-205-206.

8

the project. Throughout the meeting, Schwartz dis-

cussed the available financing opportunities and the

best law firms to employ in connection with the project.

Near the end of the meeting, 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 Phila-

delphia. 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 proce-

dures 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 gave Criden

$5,000 for delivering Schwartz and urged Criden to de-

liver Harry Jannotti.? Although, as with Schwartz,

Criden did not know Jannotti prior to the meeting,

Criden boasted on tape to Wald that he knew Jannotti

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.®

During the trial, the government placed almost total

reliance on the video tapes. It presented no independent

proof of any actual or potential effect on interstate com-

merce as a result of petitioner’s conduct and, aside from

the acts of its own agent, Criden, presented no evidence

of a “pattern” of racketeering. Likewise, the government

introduced no evidence that petitioner sought, requested

7. 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.

8. On 24 January 1980, Criden produced Jannotti for the hid-

den cameras. During the Jannotti meeting, and following an initial

discussion of the hotel project, Jannotti was repeatedly told by the

F.B.I. of the requirments of the “Arab mind,” and that the sheik in-

sisted upon making friends and resolving problems before they

arose. Wald asserted that the “Arab mind” required that Jannotti ac-

cept the payment of money to prove his friendship if the sheik was

to construct the hotel in Philadelphia.

(footnote continued )

9

or otherwise affirmed the need for any payment of

money in exchange for official services. Finally, the gov-

ernment introduced no extrinsic evidence of petitioner’s

predisposition, but relied solely upon the events of the

meetings and strained inferences from other peripheral

evidence to prove predisposition.

REASONS FOR GRANTING THE WRIT

It is petitioner’s position that the creation of crime is

an insidious and immoral business and that the govern-

ment has no place in it. For this and the other reasons

set forth below, granting of the writ requested is essen-

tial.

The Government’s Conduct of ABSCAM Violated the Most

Basic Standards of Due Process and Fundamental

Fairness, Reaching and Exceeding That Degree of

Outrageousness Which Mandates Dismissal of This

Prosecution.

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 gov-

ernment’s conduct and activities in ABSCAM exceeded

permissible limits. Petitioners submit that a review of

this record will confirm that the district court was cor-

rect. Due process in the context of criminal proceedings

8.—( continued )

Jannotti repeatedly expressed his interest in the project, his

feeling that the project would be a great benefit 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 increased the intensity of his presentation until ulti-

mately 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 interest in the proffered payment, ex-

pressed their displeasure to Criden.

10

has received only limited treatment by this Court,’ but

numerous courts of appeals have applied due process

concepts, !° and in several instances have reversed crim-

inal convictions on this very ground.'! Every factor

found relevant to the due process anaiysis by every court

of appeals that has considered the issue is present here

in the extreme.

The government instigated, suggested, set in mo-

tion, and “scripted” the entire ABSCAM scheme. Gov-

ernmental involvement was pervasive and extended over

the entire period of the scheme. The nature of that in-

volvement was singularly and unfairly designed to lure

innocent persons into the net. No evidence of ongoing

criminal conduct by petitioner (or any other Philadelphia

ABSCAM victim) was present when ABSCAM was in-

jected into his life, nor did any evidence exist of any prior

or continuing criminal activities of this type in Philadel-

phia municipal government at the time the ABSCAM op-

eration arrived. No evidence of petitioner’s predisposi-

tion, aside from some “puffing” in the course of the

governmentally-scripted meetings, was presented by the

9. See 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. Rus-

sell, 411 U. S. 423 (1973); Hampton v. United States, supra. See

also Olmstead v. United States, 277 U. S. 438, 485 (1928) (Bran-

deis, J., dissenting); Casey v. United States, 276 U. S. 413 (1928)

(Brandeis, J., dissenting).

10. E.g., United States v. Bocra, 623 F. 2d 281 (3rd Cir.), cert.

denied, 448 U. S. 875 (1980); United States v. Prairie, 572 F. 2d

1316 (9th Cir. 1978); United States v. Johnson, 565 F. 2d 179 (ist

Cir. 1977), cert. denied, 434 U. S. 1075 (1978); United States vz.

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 11.

11. 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).

a

1]

prosecution during trial. Rather, extreme inducement

was brought to bear on all the victims of 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 the victim’s civic duty through

representations that, unless money was accepted to

evince friendship for the sheik, the hotel project would

not be placed in Philadelphia.

The F. B. I. employed middlemen 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). It was to-

tally unconcerned with the methods and ploys used by

these middlemen to convince persons to participate in

the meetings, despite knowledge of prior deception and

unconscionable coaching by these very same middle-

men. Thus, the government went to extraordinary

lengths to create the inducement which preyed upon the

weakness of its targets.

The government’s conduct throughout ABSCAM

was the antithesis of fair and effective law enforcement.

There was no reason to suspect either a propensity to en-

gage in criminal conduct on the part of petitioner or the

presence of any ongoing criminal activity involving peti-

tioner. Yet, the government directed Criden to inject

himself into the petitioner's life with the deliberate in-

tent to lure him into criminal activity and with a con-

scious design to corrupt him.

The Third Circuit erroneously minimized the sig-

nificance of the government’s activities in ABSCAM by

isolating them one from the other. In Greene v. United

States, supra, the Ninth Circuit recognized that

“taken individually, none of the factors which we

have pointed to as significant would necessarily re-

quire reversal of a conviction. [But in] our view, it is

12

the combination which is important.” 454 F.2d at

787 (emphasis added).

The totality of factors present here mandates a ruling in

petitioner’s favor.

Further, in its analysis of the due process question,

the Third Circuit improperly mixed 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

entrapment context (PA-110), it is and must be a factor

in any due process analysis. Similarly, although in the

view of the Third Circuit the inducements offered to pe-

titioners by the government may not have been suffi-

cient to sustain an entrapment defense (see PA-108),

these same inducements may, when viewed in conjunc-

tion with the entire scope of unfair governmental activ-

ity, be a substantial factor in supporting a due process

defense.

Even if, as argued the Third Circuit, the govern-

ment may employ secretive tactics and deliberate

strategems to ferret out dishonesty among public

officeholders, that fact does not sanction the govern-

ment’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 denied, governmental involvement in criminal ac-

tivity 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

13

manner, the government, through its manipulation of its

captive middleman, Criden, constructed a pattern of

bribery which would not have existed but for Criden’s

presence throughout the scheme.!? Further, the con-

duct and language of the F.B.I. agents were deliberately

ambiguous and misleading. Indeed, at no time did the

government ever ask petitioner whether the payment of

bribes was necessary. Moreover, at no point did the gov-

ernment seek to elicit petitioner’s understanding of the

purpose of the meetings. One must conclude that the

agents feared that an explicit approach would have re-

sulted in the flight of their victim.

Finally, a review of the Third Circuit’s opinion in

Schwartz I reveals an extraordinary misconception of

the role of the judiciary in our society. In the view of the

majority, it is not the judiciary’s function to determine

the constitutional limitations under which our law en-

forcement agencies are to operate. According to Judge

Sloviter:

“{T]he conduct of agents of the executive branch

who must protect the public from crime is more

appropriately considered through the political proc-

ess where divergent views can be expressed in the

ballot box.” PA-112.

This manifests a total abnegation of the judiciary’s obli-

gation to define and enforce the rights of citizens under

12. The district court found that the government, through the

involvement of its own “agent,” Criden, created, initiated, and insti-

gated the pattern of bribery “as well as each 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-

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. PA-221. The Third Circuit never addressed

this issue.

14

the Constitution.'* If this Court will not establish a na-

tional benchmark defining limits on law enforcement

activity of this type, no citizen will be secure from the

clandestine imposition of morality tests conceived and

administered by the federal bureaucracy for purposes

ranging from the appeasement of overly zealous police-

egos to chilling political intimidation.

The District Court’s “Bifurcated” Entrapment Charge Er-

roneously Submitted To The Jury A Question Of Law

Reserved To The Court, Shifted The Burden Of Proof

To The Defense, And Potentially Withdrew From The

Jury Petitioner’s Crucial Entrapment Defense. This

Comprised Constitutional Error But The Third Cir-

cuit Abnegated Chapman’s “Harmless Beyond A Rea-

sonable Doubt” Standard.

Entrapment was a crucial defense to petitioner

Schwartz, to the benefit of which, on the trial record, he

13. As Judge Aldisert recognized in his dissent:

“(T]he philosophical difference that divides this court de-

pends upon a judge’s unspoken notions about the role of the

courts. If he or she views the role of the court as a passive one,

he or she will be willing to delegate the responsibility for un-

popular 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 aspirations 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 regarded as transgressors—-

Dollree Mapp, Danny Escobedo, 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 vio-

late established moral frontiers while exercising their steward-

ship; it was federal judges, unmindful of editorials and broad-

cast plaudits, who chose to stand tall and unbending.” PA-126.

(footnote omitted).

15

was entitled as a matter of law, and as to which he was

equally entitled to have the jury fairly and adequately in-

structed. The district court determined that sufficient

evidence had been adduced to warrant giving an entrap-

ment charge, but erroneously gave a “bifurcated”

charge,'* incorrectly focusing the jury’s deliberations

extensively and primarily on the threshold question of

inducement and only secondarily on the central, deter-

minative question of predisposition.'> It discussed at

length the facts and opposing arguments relating to in-

ducement and “repeatedly” (Schwartz II, ____ F.2d at

14. The district court's “bifurcated” entrapment charge sub-

mitted to the jury: (1) the threshold question whether the defense

had produced sufficient evidence of governmental initiation of the

criminal activity charged, and wrongful inducement of petitioner

Schwartz into that activity, as to merit an entrapment defense; and

(2) if so, the question whether the prosecution had produced evi-

dence sufficient to persuade the jury beyond a reasonable doubt

that Schwartz had been predisposed to commit the activity any way.

The court instructed the jury that if it did not find inducement, it

need not consider predisposition. The court thus shifted the burden

of proof to the defense and instructed the jury to withdraw entrap-

ment from its consideration if the defense had not proven induce-

ment. Schwartz Il, ____ F.2d ___, slip op. at 18-21, PA-18-21.,

Discussing the evidence, the district court indicated that in-

ducement might be found from Howard Criden’s maneuvers to gain

Schwartz’ attendance at the meetings and other activities, but that

was only chargeable against the government if the jury also found

that Criden was the government's agent. The court also stated that

the jury might find inducement from the acts of the F.B.1. under-

cover agents themselves at the meetings. PA-244-245.

15. The court's charge on entrapment comprises approxi-

mately 18 pages in the trial transcript (PA-243-253, 262), some 15

of which are devoted to the threshold question of inducement (PA-

243-251, 253, 262) and only 3 of which are devoted to the central.

determinative question of predisposition (PA-251-253). The court

told the jury to “draw a sharp line” (PA-244) between the govern-

ment merely providing an opportunity to commit crime and induc-

ing “an innocent defendant” (ibid.) to commit crime.

The district court’s entire charge to the jury, including its sup-

plemental charge after side-bar objections and further supplemen-

(footnote continued )

16

___, slip op. at 20, PA-20) instructed the jury that the

real issue to be determined was inducement. '®

In so doing, the district court allowed the jury to

second-guess a threshold question of law reserved to the

court. Further, the court shifted to petitioner Schwartz

an affirmative burden of proof on the question of induce-

ment, but the court gave the jury no standard of meas-

ure or quantum of proof by which to judge whether the

evidence was sufficient to support the finding of induce-

ment which it instructed them to make.'’ Thus, the

court opened to the jury a path to conviction which, if

_ the jury should travel it, withdrew the critical defense of

entrapment from the jury’s consideration even though

on the evidentiary record petitioner was entitled to the

defense as a matter of law.

The presumption of innocence is an axiomatic, fun-

damental proposition of constitutional dimension in our

15.—( continued )

tal charge upon entertaining a question from the jury, is reprinted

at PA-229. The portions of the charge dealing with entrapment is-

sues are found at PA-243. The Third Circuit's discussion and treat-

ment of the district court's entrapment charge is found in Schwartz

Il, ___ F.2d ____, slip op. at 16-22, PA-16-22.

16. PA-243 (“[t}he issue really is” inducement), 250 (“the is-

sue here is simply” inducement), 253 (“the specific question” is in-

ducement), 262 (“{iJf you find” inducement).

17. The district court instructed the jury that before the gov-

ernment's burden to disprove entrapment by proving petitioner

Schwartz’ predisposition beyond a reasonable doubt was triggered,

“the evidence must lead you to believe that the Government in-

duced the defendant to commit the crime charged.” PA-243.

“If you find from the evidence that there was inducement, . . .

that is, if you accept as correct the inferences urged upon you

be defense counsel. . ., if you find those facts to be correct,

then that would amount to inducement and you would there-

fore acquit the defendants unless the evidence as a whole satis-

fies you beyond a reasonable doubt that they were predis-

posed.” PA-262.

17

criminal jurisprudence. Equally axiomatic, fundamental

and constitutionally impelled is the rule that the evi-

dence need only admit of a reasonable doubt to gain the

defendant's acquittal. Taylor v. Kentucky, 436 U.S. 478.

93 S.C. 1930, 1933 (1978). There was no question by

the Third Circuit that the evidence fairly raised the spec-

tre of entrapment and that petitioner was entitled to an

instruction focused on the factual question of predisposi-

tion and explicitly placing the burden on the govern-

ment to prove predisposition beyond a reasonable doubt.

Operation of the presumption of innocence in combina-

tion with the burden of persuasion then entitled peti-

tioner to acquittal in the mere presence of a reasonable

doubt as to his predisposition.

By placing the burden of proof on_ petitioner

Schwartz and recuiring of the jury an affirmative find-

ing of inducement, instead of simply the presence of a

reasonable doubt as to predisposition, the district court

compromised the presumption of innocence and denied

petitioner the full benefit of the reasonable doubt stand-

ard. See, e.g., Davis v. United States, 160 U.S. 469. 16

S.Ct. 353 (1895) (in federal murder prosecution, evi-

dence fairly raised issue of insanity; held presumption of

innocence then entitled defendant to acquittal upon rea-

sonable doubt as to sanity); United States v. Reed, 658

F.2d 1225, 1236-1239 (7th Cir. 1981) (conflicting evi-

dence merited charge on withdrawal from conspiracy;

erroneous withdrawal instruction shifting burden to de-

fendant and requiring finding of withdrawal. not merely

reasonable doubt as to membership, held prejudicial and

reversible error); Berrier v. Egeles, 583 F.2d 515. 517-

518 (6th Cir.) (shifting burden to defendant to prove

self-defense held constitutional error comprising plain

error cognizable in collateral attack on conviction de-

spite failure to object below), cert. denied, 499 U.S. 955.

99 S.Ct. 354 (1978); United States v. Corrigan, 548

F.2d 879 (10th Cir. 1977) (instruction on affirmative de-

fense of self-defense which “suggests that the burden is

18

on the defendant” held compromised beyond-a-reason-

able-doubt standard and reversible error); United States

v. Alston, 551 F.2d 315 & 316 n.9 (D.C. Cir. 1976) (in-

struction on affirmative defense of alibi suggesting bur-

den shifted to defendant held “error of constitutional di-

mension” and not harmless beyond a reasonable doubt).

And by creating the potential for withdrawing the en-

trapment defense when the issue was fairly raised by the

evidence, the district court potentially denied due proc-

ess by denying the benefit of the jury’s informed consid-

eration (upon proper instruction) of a defense to which

the defendant was entitled as a matter of law. United

States v. Benavidez, 558 F.2d 308 (5th Cir. 1977)

(court’s inadvertent neglect to charge on entrapment

when evidence fairly raised the issue held constitutional,

plain error cognizable on appeal despite failure to object

below).

The district court thus injected constitutional error

into the trial. Because of the trial court’s erroneous en-

trapment instruction, “the jury was not in a position to

fairly evaluate the defendant’s case” (Benavidez, supra,

558 F.2d at 310). Although on the evidence “the issue

was fairly raised [it] could not be fairly decided” (ibid. ),

and petitioner Schwartz was denied the fair trial to

which he was constitutionally entitled.'* On appeal, the

18. Controlling precedent in the Third Circuit expressly con-

demned the type of bifurcated entrapment charge given by the dis-

trict court here. United States v. Watson, 489 F.2d 504 (3rd Cir.

1973); Government of the Virgin Islands v. Cruz, 478 F.2d 712,

716-718 (3rd Cir. 1973). Moreover, at least until the instant deci-

sion, the Third Circuit clearly considered the error in a bifurcated

entrapment charge to be not only constitutional error, but to be

rendered so inherently prejudicial by the shifting burden and poten-

tial for confusion as to require reversal per se. Watson, supra, 489

F.2d at 510-511 & n.10; Cruz, supra, 478 F.2d at 718 n.7. See

United States v. Booz, 451 F.2d 719, 723-724 (3rd Cir. 1971) (po-

tential for jury confusion as to shifting burden of proof under cherge

on alibi defense coupled with failure specifically to instruct on pros-

ecutor’s burden to disprove defense held reversible error per se).

19

Third Circuit was required to determine whether the er-

ror was harmless beyond a reasonable doubt. Chapman

v. State of California, 386 U.S. 18, 87 S.Ct. 824 (1967);

United States v. Alston, 551 F.2d 315, 316 & n.9 (D.C.

Cir. 1976). The Fifth, Sixth and Ninth Circuits require

per se reversal for such erroneous entrapment charges.

United States v. Wolffs, 594 F.2d 77, 79-84 (5th Cir.

1979); United States v. Tate, 554 F.2d 1341, 1343-1345

(5th Cir. 1977); United States v. Ambrose, 483 F.2d 742,

753 (6th Cir. 1973); United States v. Dearmore, 672

F.2d 738, 740-741 (9th Cir. 1982); Notaro v. United

States, 363 F.2d 169 (9th Cir. 1966).

In conflict with applicable decisions of this Court, in

direct conflict with decisions in the Fifth, Sixth and

Ninth Circuits, and in defiance of precedent within its

own circuit (note 18 supra), the Third Circuit panel in

Schwartz II not only declined to invoke a per se rule of

reversal but refused even to acknowledge the constitu-

tional dimension of the error, and thus refused to apply

Chapman’s “harmless beyond a reasonable doubt”

standard. Schwartz II, F.2d ___, slip op. at 21-22,

PA-21-22. This Court’s exercise of certiorari jurisdiction

is necessary to resolve the conflict thus created.

Applying its test for the harmlessness of non-consti-

tutional error, the Third Circuit held that the district

court’s erroneous instructions on entrapment were

harmless because inducement was “patent” from the

fact that the government had created “an elaborate fic-

tion”, and because the government’s evidence (the vid-

eotapes of the meetings) “overwhelmingly” established

predisposition by showing that petitioner readily as-

sented to take the money. Schwartz II, > pee

slip op. at 21-22, PA-21-22. But the district court submit-

ted the inducement question to the jury for determina-

tion as a disputed fact, and clearly told the jury that it

was free to decide that question against petitioner

20

Schwartz.!9 PA-244-248, 250-251, 256. Moreover, the

court instructed that the jury must affirmatively find in-

ducement before the government’s burden to prove pre-

disposition beyond a reasonable doubt would be trig-

gered (PA-243, 253, 962), thus creating the real

potential for the entrapment defense to be withdrawn

from the jury’s consideration. As to predisposiuon, the

district court was not so convinced of the “overwhelm-

ing” nature of the evidence as was the Third Circuit.

The court instructed the jury that there was “little or no

evidence of predisposition other than the fact that the

defendant did indeed accept the money without too

much argument. . . .” PA-252. And in its order setting

aside the jury’s verdict of conviction, the district court

held that the evidence was insufficient to prove predis-

position beyond a reasonable doubt. PA-223. It cannot be

said on this record that the evidence of predisposition

was so overwhelming as to render the constitutional er-

ror in the instructions harmless beyond a reasonable

doubt. This Court’s grant of certiorari jurisdiction is

therefore necessary to clarify the application of the

Chapman standard to instructional errors such as were

committed here.

19. The factual question whether Criden was an agent of the

government was intimately tied to the inducement issue. The dis-

trict court told the jury that it could look to the acts of Criden as

evidence of inducement, but only if it found that Criden was an

agent of the government. PA-244-245, 250. Under the court’s

instructions, the jury was free to conclude that Criden was merely

an independent intermediary whose actions were not chargeable

against the government, and thus to find no inducement. PA-244-

245. In that event, the jury would not determine whether the pros-

ecution had proven predisposition beyond a reasonable doubt and

the entrapment defense would be withdrawn.

21

Where the Evidence of Governmental Inducement Is Over-

whelming, the Government May Not Rely Upon Evi-

dence of “Ready Acquiescence” Manufactured by It to

Meet Its Burden, Nor Can a Court Sustain a Convic-

tion in an Entrapment Case on Proof of Commission

of the Criminal Act Alone.

Although recognizing that under the law of entrap-

ment it is the government’s burden to prove predisposi-

tion beyond a reasonable doubt, the Third Circuit ig-

nored this standard of proof and permitted the verdict

below to stand on evidence of the commission of crime

alone. If the court’s ruling is not reversed, the entrap-

ment 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 other-

wise innocent whom the Government is seeking to pun-

ish for an alleged offense which is the product of the cre-

ative 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 re-

lationship 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 defend-

ant was due to the inducement rather than to the

defendant’s own predisposition,” Id. at 511.

The extraordinary degree of governmental induce-

ment in this case has already been reviewed. Given evi-

dence of these overwhelming inducements, the govern-

ment’s evidentiary burden to prove predisposition was

susbstantial. But the majority in Schwartz I abjured any

necessity to conduct a review of the entire record, de-

spite its profession of the appropriateness of such a pro-

cedure. PA-87-99. Instead, as Judge Aldisert pointed

22

out, it satisfied itself with a rebuttal of the items relied

upon by the district court in entering judgment of ac-

quittal. PA-138-139. In so doing, the court again relieved

the government of its obligation to prove predisposition

by good and sufficient evidence and effectively shifted

the burden of disproof onto petitioner. Petitioner submits

that a review of the record will plainly demonstrate that

not a scintilla of evidence exists to establish the requisite

predisposition, let alone to counterbalance the weight

which must be accorded to the uncontradicted proof of

massive governmental inducement.

Second, although appreciating that predisposition

has been historically proven by, for example, proof of a

defendant's prior convictions, his participation in similar

transactions or proof of bad character, the Schwartz I

majority made the startling observation that since

“Is]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 opportu-

nity is presented.” PA-99-100.

Proof of the criminal act, a fact which must be ad-

mitted of necessity by a criminal defendant arguing en-

trapment, is thus, for the Third Circuit, 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 accepts the Third Circuit’s ab-

stract proposition that the demeanor of the petitioner

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 meet-

ings, orchestrated and scripted every aspect of those

meetings, and controlled the flow of conversation to the

extent that the petitioners’ statements were always

23

made in response to continuously monitored specific in-

quiries of the government. The conduct and conversa-

tion of the government’s agents at the meetings were ad-

mittedly designed for the sole purpose of obtaining

evidence to be used in a future proceeding. Neverthe-

less, it is this very evidence and only this evidence—this

demeanor of petitioner at the meetings—which the gov-

ernment now contends is sufficient 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

response” evidence and then rely upon this evidence as

the sole proof of predisposition. In no case in which proof

of governmental inducement was as overwhelming as in

this case has any court permitted a conviction to stand

on the flimsy “ready acquiescence” evidence presented

here. Here, petitioner neither said nor did anything

tending to establish pre-existing criminal inclinations,

nor demonstrated previous experience with similar

criminal activity. In short, there was no evidence to

show that when the government’s overtures first came

to the attention of Schwartz that he was already predis-

posed to accepting bribes.

At bottom, the court’s rejection of the entrapment

defense rests upon the simplistic notion that all peti-

tioner had to do when offered the money was to say “no

thanks.” PA-104. Such an approach to the difficult juris-

prudential problem raised by this case is wholly unac-

ceptable. Peeling away the veneer of language in the

court's opinions in Schwartz I and Schwartz II, one finds

only the proposition that petitioner must be punished for

immorality, and the defense of entrapment must be seri-

ously compromised or, indeed, eradicated to achieve this

result.

24

The Third Circuit’s Ruling on Hobbs Act Jurisdiction in

This Case Conflicts With the Kulings of Three Courts

of Appeals, Impacts on All Federal Criminal Legisla-

tion Enacted Under the Commerce Clause, Misapplies

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 require-

ment is satisfied by the existence of facts... .” (Empha-

sis added). In its decision below, the Third Circuit com-

pletely disregarded _ this fundamental concept,

established a standard of proof directly in conflict with

the standards employed by the Fourth, Seventh, and

Ninth Circuits, sustained a conviction for Hobbs Act

conspiracy where no jurisdictional fact was or could

have been proven, misinterpreted this Court's prior deci-

sions in Feola and Perez v. United States, 402 U.S. 146

(1971), and demonstrated a basic misunderstanding of

the jurisdictional limitations inherent in all federal legis-

lation. Because the Third Circuit’s 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 clatise power” (PA-72), 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 commerce

issue raised by the Hobbs Act, and held:

“(T]he statutory language [of the Hobbs Act]... re-

quires the prosecutor to prove some connecticn

with interstate commerce in every case. We hold,

however, that the commerce element of a Hobbs

Act violation — the federal jurisdictional fact —

25

may be satisfied even if the record demonstrates

that the extortion had no actual effect on com-

merce. ... [JJurisdiction in the particular case is

satisfied by showing a realistic probability that an

extortionate transaction will have some effect on

interstate commerce.

“The jurisdictional inquiry must, of course, fo-

cus 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.2°

In this case, the government-created scheme was

wholly fictitious. The government 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 intention to imple-

ment the scheme, there never existed any realistic possi-

bility that the charged conspiracy would ever have an ef-

fect upon interstate commerce. Despite these

undisputed facts, the Third Circuit held that where a de-

fendant’s conduct constitutes “a sufficient threat to in-

terstate commerce so as to implicate an ‘area of federal

concern’,” federal jurisdiction is established. Schwartz I,

673 F.2d at 592, PA-75. Thus, in direct conflict with

20. Eg., 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. 909

(1977). Numerous other Courts of Appeals have referenced the

Staszcuk formulation in passing on Hobbs Act jurisdiction issues,

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).

21. It is undisputed that no evidence, of any nature, was intro-

duced at trial by the government to show that the alleged conspiracy

would have had any effect, actual or potential, on commerce if per-

formed. PA-176.

26

Staszcuk, the Third Circuit 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 juris-

diction, is present. However, if A and B conspire to as-

sault X whom they mistakenly believe to be a federal of-

ficer, 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 con-

spire to assault X if he arrives, but X is a fiction created

in 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 re-

place jurisdictional facts. In this case, measured by the

facts, no effect on commerce could ever take place.

Here, the federal agents unilaterally fashioned a scheme

which they hoped would satisfy jurisdictional require-

ments. In each case relied upon by the Third Circuit,

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 pa-

tently unfair to sanction governmental manipulation of

that agreement solely to create federal jurisdiction. If the

purpose of the federal conspiracy laws is to provide fed-

992. See cases cited in Schwartz I, 673 F.2d at 592-593, PA-74-

77.

27

eral law enforcement officials with the tools necessary to

combat 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.

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 re-

ality is that no real, actual impact on commerce could

have ever occurred in this case. This case, even more

than Archer, epitomizes the concept of “manufactured

federal jurisdiction.”?%

The Third Circuit completely misunderstood Feola.

See 420 U. S. at 695-96.24 As Judge Aldisert recognized:

“The majority interweaves its jurisdicitonal argu-

ment with the argument that factual impossibility of

completing a substantive offense does not bar a con-

viction of conspiracy. They confuse proof of the

crime of conspiracy with the jurisdictional power to

23. 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 crim-

‘nal jurisdiction of federal courts, and would be utterly con-

trary to accepted notions of federalism.” 501 F.Supp. at 1204,

PA-221 (emphasis added).

24. In her opinion, Judge Sloviter remarked:

“In holding [in Feola] that there was a ‘sufficient threat’ to

an ‘area of federal concern’ to meet the jurisdictional require-

ments 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.” Schwartz I,

673 F.2d at 593, PA-78 (emphasis added). But Feola clearly re-

quires that the victim of the agreement to assault must be a fed-

eral officer for federal jurisdiction to attach.

28

punish the crime. The presence of subject matter

jurisdiction is a discete and primary issue in each

case presented to a federal court, unlike a state

court. The effect on commerce is both jurisdictional

and substantive in a Hobbs Act prosecution, but the

two inquiries are separate and distinct. See, e.g.,

Feola, 420 U. S. at 694-96.” Schwartz I, 673 F.2d at

626 , PA-147 (emphasis added).

Not only are the two inquiries “separate and dis-

tinct,” but also the standards by which they are deter-

mined differ. Respecting proof of the substantive of-

fense, the subjective criminal intent of an alleged Hobbs

Act defendant is crucial; respecting proof of Hobbs Act

jurisdiction, however, the subjective criminal intent of a

Hobbs Act defendant is irrelevant; it 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, adjured the limitations inherent in the

commerce clause power, but established a test which

shifts the focus of the jurisdictional inquiry away from

the “existence of [real] facts” and to the subjective intent

of the actor. As a result, the objective “realistic probabil-

ity” test established by Staszcuk has been disembowled

by the Third Circuit and the requirement in Feola that

jurisdiction be predicated on fact has been eliminated.

It is petitioners’ position that the Third Circuit, by

its ruling, has aboiished all jurisdictional limitations

which heretofore existed under the Hobbs Act and has

constructed a standard “which in practicality would ex-

tend federal jurisdiction 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 a Demand or Request by a Defendant Should

Not Be Permitted, and Clarification of This Issue Is Es-

sential.

A plain reading of the definition of “extortion’ in the

Hobbs Act shows that proof of demand is necessary to

29

convict. The district court held in part that the absence

of proof of any express or implied demand or request for

payment by petitioner required dismissal of the Hobbs

Act charges. 501 F.Supp. at 1185, PA-178-179. The

Third Circuit 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 un-

necessary. Schwartz I, 673 F.2d at 594-595, PA-79-81.

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

of inducement.?° In fact, except for Staszcuk, where in-

sufficient detail is provided to determine whether affirm-

ative 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

conviction absent evidence of inducements, or of “initia-

tive and purpose,” United States v. Hyde, 448 F. 2d 815,

833 (Sth Cir. 1971) (Wisdom, J.), cert. denied, 404 U. S.

1058 (1972) on the part of the official.2®

In this case, it is clear that neither petitioner nor

anyone acting on his behalf, at any time, requested or

demanded money in connection with the proposed con-

struction of the hotel in Philadelphia or in exchange for

petitioner’s use of his official position. Rather, the evi-

dence is clear that petitioner was, at most, the passive

recipient of money and would have supported the pro-

25. 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).

26. “In other words, while the essence of bribery is voluntari-

ness, the essence of extortion is duress.” United States v.

Addonizio, 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 (1960).

30

posed project whether or not any money was paid to

him.

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 defen-

dants induced or intended to induce payment, the mere

acceptance of a bribe does not constitute extortion or vio-

late the Hobbs Act. E.g., United States v. Gerald, 624 F.

2d 1291 (5th 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 offi-

cial corruption has ever resulted in conviction of the de-

fendant absent proof of a request or demand, the Third

Circuit’s reading of the Hobbs Act statute and the con-

clusion which it reached are clearly incorrect.

——— of this troublesome issue is plainly war-

ranted.

CONCLUSION

For these reasons, this Court should issue a writ of

certiorari to the Court of Appeals for the Third Circuit

and review and correct the decision below.

Respectfully submitted,

Of Counsel: RICHARD A. SPRAGUE

SPRAGUE, LEVINSON & THALL STEVE ALEXANDER

Suite 400, Wellington Bldg. (215) 561-7681

135 S. 19th Street Attorneys for Petitioner

Philadelphia, PA 19103 George X. Schwartz

May, 1984

ry

27. Indeed, no rationai argument can be made to support di-

vergent approaches to the Hobbs Act. As ‘he Fifth Circuit stated:

“[t]he distinction from bribery is therefore the initiative and purpose

on the part of the [defendant] and the fear and lack of voluntariness

on the part of the victim.” United States v. Hyde, 448 F.2d 815, 833

(5th Cir. 1971), cert. denied, 404 U.S. 1058 (1972).