Appendix — Roemer v. United States

g3-29 Fi

NO. SoS

9n the

Supreme Court of the WMnited States

OCTOBER TERM, 1982

CHARLES E. ROEMER, II,

Petitioner

VERSUS

UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

VOL. II—APPENDIX A, B, C, D, E

JOHN R. MARTZELL

MARTZELL, LAMOTHE & GAY

338 Lafayette Street

New Orleans, Louisiana 70130

Tel.: 504/581-9065

Counsel of Record

JOHN WILSON REED

GLASS & REED

338 Lefayette Street

New Orleans, Louisiana 70130

Tel.: 504/581-9065

Attorneys for Petitioner,

Charles E. Roemer, II

AB Letter Service, Inc., 327 Chartres St., New Orleans, La. (504) 581-5555

A-l

APPENDIX “A”

UNITED STATES of America,

Plaintiff-Appellee,

Vv.

Charles E. ROEMER, II and Carlos Marcello,

Defendants-Appellants.

No. 82-3040

United States Court of Appeals,

Fifth Circuit

April 11, 1983.

Following the denial of defendants’ pretrial motion

to dismiss, 508 F.Supp. 586, defendants were convicted

before the United States District Court for the Eastern

District of Louisiana, Morey L. Sear, J., 537 F.Supp. 1364,

of conspiring to violate the Racketeer Influenced and Cor-

rupt Organizations Act, and their motion for judgment of

acquittal or for new trial was denied, and they appealed.

The Court of Appeals held that: (1) affidavit in support of

Government's application for electronic surveillance was

adequate; (2) Government did not artifically create federal

jurisdiction; (3) evidence sustained conviction; (4) jury in-

structions correctly and adequately stated the law; and (5)

evidence sustained finding that the hand written notes of

FBI agent prepared after a meeting with one of the defen-

dants did not constitute a ‘‘statement’’ which prosecution

was required to disclose to defendant, and because the

report which was released to defendant was substantially

identical to the notes, any error in failing to disclose the

notes would have been harmiess.

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Affirmed.

Glass & Reed, John W. Reed, John R. Martzell, New

Orleans, La., for defendants-appellants.

Arthur A. Lemann, III, New Orleans, La., for Carlos

Marcello.

John P. Volz, U.S. Atty., L. Eades Hogue, Asst. U.S.

Atty., Albert J. Winters, Jr., lst Asst. U.S. Atty., John

Voorhees, Dept. of Justice, Strike Force, New Orleans, La.,

for plaintiff-appellee.

Before GOLDBERG, GEE and RANDALL, Circuit

Judges.

PER CURIAM:

Appellants Roemer and Marcello were convicted of

conspiring to violate the Racketeer Influenced and Corrupt

Organizations Act, 18 U.S.C. 1962(d) (1976). On appeal

they argue (1) the affidavit in support of the government's

initial application for electronic surveillance was inade-

quate; (2) the government artificially created federal

jurisdiction; (3) the evidence was insufficient to support

their convictions; and (4) the jury instructions incorrectly

stated the law. Also, we have carried with the case a motion

to disclose material pursuant to the Jencks Act, 18 U.S.C.

§ 3500 (1976).

We have carefully examined the briefs, all portions of

the record directed to our attention by the parties or the

opinions of the court below, and all authorities cited by the

parties or the opinions of the court below. We have found

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that the verdicts below are supported by the law and

evidence and must be affirmed. This case has been

thoroughly briefed and well handled by all parties from the

earliest stages, and all of the arguments presented to us on

the four points of alleged error were also presented to the

trial court below. The trial court was conscientious and

thorough in its exposition of the law and we affirm the

judgments below based upon the portions of the trial

court's opinions relating to the four points of appeal.

United States v. Marcello, 508 F.Supp. 586, 601-07

(E.D.La. 1981) (affidavit); United States v. Marcello, 537

F.Supp. 1364, 1367, 1369-77 (E.D.La. 1982) (artificial crea-

tion of jurisdiction); id. at 1379-80, 1382-84 (sufficiency of

evidence); id. at 1384-86 (jury charge).

This case carries with it a motion to unseal handwrit-

ten notes of an FBI agent prepared after a meeting with

Roemer and subsequently incorporated into a standard

“302” report. The 302 was produced under the Jencks Act,

18 U.S.C. § 3500 (1976), but the notes were not. The issue

before us is whether the notes were a statement by the

agent, who testified at trial. To be a statement, the notes

must be ‘‘signed or otherwise adopted”’ by the agent. Jd. §

3500(e)(1). The trial court found that the notes were not a

In particular, there was sufficient evidence to support the fin-

ding of agreement by Roemer to commit mail fraud. ‘‘It was not

necessary to prove that [the defendant] actually did the mailing, ‘he need

only have had a reasonable basis to foresee that his actions would result

in the use of the mails.’ '’ United States v. Martino, 64% F.2d 367, 401

(5th Cir.1981), cert. denied, _ U.S. _, 102 S.Ct. 2006, 72 L.Ed.2d 465

(1982), _ U.S. _, 102 S.Ct. 2007, 72 L.Ed.2d 465 (1982), __ U.S. _.. 102

S.Ct. 2020, 72 LEd.2d 474 (1982) (quoting United States v. Georgalis,

631 F.2d 1199, 1206 (5th Cir. 1980)). As the trial court below stated, the

evidence in this case ‘shows not only the expectation that the mail and

interstate phone calls would be used to further the scheme, but also the

defendants’ assent and approval of the use of those means of effecting

the plan.’’ United States v. Marcello, supra, 537 F.Supp. at 1344.

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statement, observing that the notes were full of abbrevia-

tions and difficult to interpret. The trial court also found

that the 302 was almost totally duplicative of the rough

notes.

One circuit has held that rough notes are not

statements. See, e.g, United States v. Griffin, 659 F.2d

932, 937-38 (9th Cir.1981), cert. denied, _ U.S. __, 102 S.Ct.

2019, 72 L.Ed.2d 473 (1982); United States v. Spencer, 618

F.2d 605 (9th Cir. 1980). Other courts have held to the con-

trary. See, e.g., United States v. Walden, 465 F.Supp. 255,

259-61 (E.D.Pa.1978), aff'd, 590 F.2d 85 (3rd Cir.) cert.

denied, 444 U.S. 849, 100 S.Ct. 99, 62 L.Ed.2d 64 (1979);

United States v. Hilbrich, 232 F.Supp. 111 (N.D.I.1964),

aff'd, 341 F.2d 555 (7th Cir.), cert. denied, 381 U.S. 941, 85

S.Ct. 1775, 14 L.Ed.2d 704 (1965). This circuit has not

adopted any hard or fast rule, but has consistently held

that a determination of whether a writing was a statement

was a factual determination to be reversed only if clearly

erroneous. See, e.g., United States v. Cole, 634 F.2d 866,

867 (5th Cir.), cert. denied, 452 U.S. 918, 101 S.Ct. 3055, 69

L.Ed.2d 422 (1981); United States v. Medel, 592 F.2d 1305,

1317 (5th Cir.1979); United States v. Cathey, 591 F.2d 268,

274 (5th Cir.1979). Our circuit has noted that the roughness

of the notes may be relevant to a finding that they were not

adopted by the author as a statement. See United States v.

Surface, 624 F.2d 23, 26 (5th Cir.1980); United States v.

Jiminez, 484 F.2d 91, 92 (65th Cir.1973).

Given the trial court’s proper reliance on the

roughness and abbreviations of the notes, its finding that

the notes were not a statement is not clearly erroneous and

must be affirmed. In any event, because the released 302 is

substantially identical to the retained notes, had there been

error it would have been harmless. United States v.

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supra, 624 F.2d at 26; United States v. Medel, supra, 592

F.2d at 1316-17; United States v. Jiminez, supra, 484 F.2d

at 92.

AFFIRMED.

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APPENDIX “‘B”’

UNITED STATES of America

Vv.

Carlos MARCELLO et al.

Crim. A. No. 80-274.

United States District Court,

E.D. Louisiana.

Jan. 9, 1981

In prosecution resulting from a Justice Department

undercover ‘‘sting”’ operation, defendants filed pretrial mo-

tions to dismiss indictment or to suppress evidence alleged-

ly illegally obtained. The District Court, Sear, J., held that:

(1) transcripts and evidentiary records did not indicate that

grand jury process had been affected by alleged Govern-

ment-initiated leaks to news media or by any misconduct

by Government attorneys, thus evidentiary hearing on mo-

tion to dismiss was not necessary; (2) evidence established

that informer was mentally capable of freely and voluntari-

ly consenting to recording of his conversations with defen-

dant and that he did so; (3) since early wiretap orders form-

ed basis for findings of probable cause as to later wiretap

orders, all defendants had standing to challenge the

wiretap orders, even though not all defendants were sub-

jects of the early orders; (4) affidavits supporting wiretap

in investigation of criminal! activity relating to corrupt in-

fluence and bribery in public employee insurance contracts

provided magistrates with sufficient evidence to warrant

finding of probable cause; (5) records disclosed no inten-

tional or reckless misrepresentations or omissions such as

would render affidavits insufficient to establish probable

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cause: and (6) motion for disclosure of identity of informer

would be denied, where defense failed to demonstrate

relevance of informer’s identity to case and his defense,

since the information which informer provided was itself ir-

relevant to the case.

Order accordingly.

John P. Volz, U.S. Atty., E. D. La., L. Eades Hogue,

U. S. Dept. of Justice, Albert Winters, Richard T. Sim-

mons. Asst. U. S. Attys., John Voorhees, U. S. Dept. of

Justice, New Orleans, La., for United States.

Russell J. Schonekas, New Orleans, La., Henry Gon-

zalez, Tampa, Fla., for Marcello.

Thomas R. Dyson, Jr., Washington, D. C., Frank

DeSalvo. New Orleans, La., for Davidson.

Michael S. Fawer and Matthew H. Greenbaum, New

Orleans, La., for Roemer.

Arthur A. Lemman, III, New Orleans, La., for

Marinello.

Risley Triche, Napoleonville, La., for Young.

SEAR, District Judge.

I. Introduction

Defendants in a government prosecution resulting

from the Justice Department's undercover “sting” opera-

tion code-named ““BRILAB” have brought various pretrial

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motions to dismiss the indictment against them or, failing

that, to suppress certain evidence which they contend was

illegally obtained. The defendants first move to dismiss the

indictment because of what they characterize as govern-

mental overreaching and jurisdiction artificially created by

the government. They also contend in these motions that

prejudicial publicity resulting from leaks to the news media

of grand jury proceedings is so pervasive that they are en-

titled to dismissal of the indictment. In addition, defendant

Carlos Marcello seeks dismissal on the ground that he is a

victim of arbitrary and discriminatory selective prosecu-

tion. In the second group of motions, defendants seek sup-

pression of their recorded communications obtained by the

government with the consent of an informer, Joseph

Hauser, or pursuant to wiretap orders issued by United

States District Judges in the District of Columbia and the

Eastern District of Louisiana. In addition to the motions to

suppress, the second group of motions includes one

brought by Marcello for disclosure of the name of the in-

dividual who provided the government with confidential

notebooks and telephone logs allegedly stolen from him in

a 1977 burglary.

Arguments on the motions to dismiss and other

preliminary motions! were heard on October 6 and 7, 1980.

: Prior to the hearing conducted the week of October 6, 1980, and

again before the hearings held the week of December 8, 1980, the defen-

dants moved to adopt the substantive motions and the motions to sup-

press of their co-defendants, and I granted the motions to adopt. In ad-

dition to the motions discussed in the text of this minute entry, the

defendants brought various motions in October to dismiss the indict-

ment and to strike portions of the indictment. I denied these motions

orally from the bench. Motions for review of the discovery orders issued

by United States Magistrate Ingard O. Johannesen were also argued

and decided at the October hearings. See Minute Entry filed November

4, 1980. In addition, defendants Charles Roemer, I. Irving Davidson,

Vincent Marinello and Aubrey Young argued that their prosecutions

A-9

At that time rulings on some of these motions were defer-

red until the trial or following any post-trial hearings that

might be necessary. During the week of December 9, 1980,

extensive evidentiary hearings were held on the motions to

suppress and defendant Marcello’s motion for disclosure.

Because of the number of motions, the uniqueness of some,

and the necessity of maintaining an orderly record, there is

a need to explain my rulings on the motions to suppress

and the motion for disclosure, as well as to elaborate on my

prior rulings on the motions to dismiss.

Il. Background of the Case

On June 17, 1980, defendants Carlos Marcello, I. Irv-

ing Davidson, Vincent Marinello, and Charles Roemer were

indicted by a federal grand jury in the Eastern District of

Louisiana. A fifth defendant, Aubrey Young, was added as

a defendant in a superseding indictment issued by the

grand jury on August 14, 1980. In the lengthy, twelve-

count indictment, the defendants are charged with various

violations of federal law allegedly uncovered in a Justice

Department undercover operation commonly known as

BRILAB. The investigation, whose acronym stands for

‘‘bribery-labor,”” centered upon suspected illegal activities

involving public officials, labor unions and reputed organiz-

ed crime figures in the Southwest. The BRILAB operation

in Louisiana lasted about one year from February 1979 to

February 1980, a period during which the 1979 Louisiana

gubernatorial campaign and election were held. As part of

the investigation, two FBI agents posed as representatives

of a fictitious Beverly Hills, California firm called Fidelity

Financial Consultants. The agents were aided by Joseph

(Footnote 1 continued)

should be severed from the trial of defendant Carlos Marcello. | denied

the motions to sever orally from the bench.

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Hauser, a cooperating individual who had pleaded guilty on

February 5, 1979 to federal charges arising out of his in-

volvement in an insurance swindling scheme.

In this prosecution defendants are charged with in-

volvement in a criminal enterprise for the purpose of ob-

taining insurance contracts from state and local govern-

ments, labor unions, and at least one private business by

committing various criminal acts. In general the defen-

dants are charged with (1) a conspiracy to obtain insurance

contracts by committing criminal acts in violation of the

Racketeer Influenced and Corrupt Organizations (RICO)

Act, 18 U.S.C. § 1962(c); (2) a substantive violation of

RICO, 18 U.S.C. § 1961(4), in that the defendants were

allegedly ‘‘associated in fact’’ as an ‘‘enterprise’’ to obtain

insurance contracts by committing criminal acts; (3) viola-

tions of the federal mail fraud statute, 18 U.S.C. § 1341; (4)

violations of the federal wire fraud statute, 18 U.S.C. §

1343; and (5) interstate travel or transportation in aid of

racketeering in violation of 18 U.S.C. § 1952.

III. Motions to Dismiss

Among the motions argued by the defendants on Oc-

tober 6 and 7, 1980 were four whose determination they

contend requires extensive evidentiary hearings. First, the

defendants seek to dismiss the indictment on grounds of

“governmental overreaching’ and prosecutorial miscon-

duct. They contend that the acts charged in the indictment

were all part of a scheme initiated, controlled, planned and

executed by the government itself in violation of their con-

stitutional rights to due process of law. Second, the defen-

dants submit that the indictment should be dismissed

because federal criminal jurisdiction was artificially

created by the government, which they argue concocted,

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created and supplied the interstate commerce aspects

necessary to allege a federal offense. Third, defendant

Marcello seeks to dismiss the indictment as to him on

grounds that the government engaged in discriminatory

selective prosecution. Marcello contends that for years

government prrosecutors have arbitrarily labeled him as

chief of a Louisiana organized crime syndicate and boss of

the ‘‘Mafia’’ or ‘‘La Cosa Nostra.’’ Marcello argues that

this false label prompted the government to create the

scheme charged in the indictment for the express purpose

of fraudulently inducing Marcello in particular into the

scheme in violation of his Fifth and Fourteenth Amend-

ment rights to due process and equal protection of the law.

Finally, defendants seek dismissal of the indictment on

grounds that they were severely prejudiced by

government-initiated leaks to the press. They contend that

these leaks enabled newsmen to write and broadcast

reports about the pending BRILAB grand jury investiga-

tion creating unfair and prejudicial pre-indictment and pre-

trial publicity which rendered further proceedings fun-

damentally unfair. Alternatively, the defendants ask that

the government officials responsible for the news leaks be

held in contempt pursuant to Fed.R.Crim.Pro. 6/e).

Each of these motions contemplates a broad eviden-

tiary hearing at which the defendants would examine

government officials, witnesses and documents in hopes of

establishing prosecutorial misconduct so egregious that

the resulting indictment must be dismissed as a violation

of defendants’ constitutional rights. In anticipation of the

contemplated evidentiary hearings, the defendants sub-

poenaed the Attorney General of the United States, one of

his chief deputies, the director of the FBI and one of his

assistants, United States attorneys, FBI agents, and the

government's chief witness and informer. Joseph Hauser.

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In addition, they subpoenaed members of the press whose

news stories appeared prior to and during the grand jury

investigation and which defendants contend prejudiced

them.

A) Governmental Overreaching and Artifically Created

Jurisdiction

The motions alleging governmental overreaching

and artificially created jurisdiction share a common legal

basis and require substantially similar proof. For each of

these motions, defendants seek an evidentiary hearing to

elicit the testimony of government officials and informers

who were involved in the BRILAB investigation or its

supervision. The threshold issue in the resolution of these

motions is whether claims of governmental misconduct and

artificially created jurisdiction present cognizable defenses

to a criminal prosecution. I find that each does.

Ordinarily, a criminal defendant's allegation of

governmental overreaching or prosecutorial misconduct

arises in the defense of entrapment. When a defendant

pleads the defense of entrapment, he has the burden of

showing that law enforcement officials induced him to com-

mit a crime that he was not predisposed to commit and that

the government implanted the criminal design in his mind.

United States v. Russell, 411 U.S. 423, 433, 436, 93 S.Ct.

1637, 1643, 1645, 36 L.Ed.2d 366 (1973); United States v.

Anderton, 629 F.2d 1044, 1047 (5th Cir. 1980); United

States v. Wolffs, 594 F.2d 77, 79-80 (5th Cir. 1979). A claim

of governmental overreaching, however, is a distinct and

different defense in which the defendants contend that the

government's involvement in the BRILAB scheme was so

pervasive and outrageous that due process principles or the

court's power of supervision over the criminal justice

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system require that the indictment be dismissed.

The Supreme Court on two occasions has declined to

reverse a criminal conviction on grounds of governmental

overreaching. There is language, however, in United States

v. Russell, supra, and in the concurring and dissenting opi-

nions in Hampton v. United States, 425 U.S. 484, 96 S.Ct.

1646, 48 L.Ed.2d 113 (1976), suggesting that the Court

might be willing to accept the defense of governmental

misconduct in an appropriate case. In Russell, the Court

upheld the conviction for illegal manufacture of drugs even

though an undercover agent had supplied him with an

essential ingredient. The Court stated, however:

While we may some day be presented with a

situation in which the conduct of law enforcement

agents is so outrageous that due process prin-

ciples would absolutely bar the government from

invoking judicial processes to obtain a convic-

tion,...the instant case is distinctly not of that

breed.... The law enforcement conduct here stops

far short of violating that ‘‘fundamental fairness,

shocking to the universal sense of justice,’’ man-

dated by the due process clause of the Fifth

Amendment.

411 U.S. at 431-32, 93 S.Ct. at 1643. In Hampton, the

Court upheld a conviction for heroin distribution, and

Justice Rehnquist, writing for a three-justice plurality of

the Court, completely rejected the governmental miscon-

duct defense. 425 U.S. at 489-90, 96 S.Ct. at 1650. The con-

curring and dissenting opinions noted, however, that police

overinvolvement in a crime could bar prosecution on due

process grounds where the misconduct reached a

“demonstrable level of outrageousness."’ /d. at 495 n.7, 96

S.Ct. at 1653 n.7.

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Several courts of appeals have recognized that in

some circumstances convictions obtained through

egregious misconduct by government agents involved in

the creation and maintenance of criminal activities would

be vacated. See United States v. Twigg, 588 F.2d 373, 381

(3d Cir. 1978); United States v. Archer, 486 F.2d 670,

676-77 (2d Cir. 1973); Greene v. United States, 454 F.2d

783, 787 (9th Cir. 1971). The Fifth Circuit has agreed that

in certain situations, a defense of governmental miscon-

duct, separate and distinct from the defense of entrapment,

may bar a criminal prosecution on due process grounds. In

United States v. Graves, 556 F.2d 1319, 1324 (5th Cir.

1977), cert. denied, 435 U.S. 923, 98 S.Ct. 1485, 55 L.Ed.2d

516 (1978), the court ruled that ‘‘[t]here is still available in

appropriate cases a governmental misconduct defense

grounded on the dual principles of due process and the

supervisory powers of the court, but such a defense does

not fall within the narrow confines of ‘entrapment’ as that

term has been explicated in Russell and Hampton.”

Therefore, without deciding the merits of defendants’ mo-

tion at this time, I conclude that the motion to dismiss the

indictment on grounds of governmental overreaching

presents a cognizable and legitimate defense.

Similarly, defendants’ motion to dismiss on grounds

of artificially created jurisdiction also presents a

cognizable legal defense. The RICO statute itself makes

clear that an effect on interstate commerce is an essential

element of the federal offenses charged in the indictment.

See 18 U.S.C. § 1962(a), (b), and (c). The motion to dismiss

on grounds of artificially created jurisdiction is factually

related to defendants’ governmental overreaching argu-

ment in that they contend that government overinvolve-

ment in the scheme resulted in the creation and

maintenance of the interstate commerce elements of the

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offense charged in the indictment.

In United States v. Archer, supra, federal and local

law enforcement officers created an undercover operation

to investigate suspected corruption and public bribery in

the New York City criminal justice system. Two assistant

district attorneys were eventually convicted of violations

of the Federal Travel Act, 18 U.S.C. § 1952, but the Second

Circuit reversed the convictions. In its original opinion, the

court held that

when Congress responded to the Attorney

General's request to lend the aid of federal law en-

forcement to local officials in the prosecution of

certain crimes, primarily of local concern, where

the participants were engaging in interstate ac-

tivity, it did not mean to include cases where the

federal officers themselves supplied the interstate

element and acted to ensure that an interstate ele-

ment would be present. Manufactured federal

jurisdiction is even more offensive in criminal

than in civil proceedings.... {MJanufactured

jurisdiction “‘is a reflection of the federal judicial

system which brings it into disrepute.”’

486 F.2d at 682 [citations omitted]. On rehearing, the Se-

cond Circuit tempered somewhat the breadth of its

language, pointing out that its decision “in fact went no

further than to hold that when the federal element in a pro-

secution under the Travel Act is furnished solely by under-

cover agents, a stricter standard is applicable than when

the interstate or foreign activities are those of the defen-

dants themselves and that this was not met here.” Jd. at

685-86.

The Fifth Circuit was faced with a similar motion to

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dismiss a Travel Act indictment on grounds of artificially

manufactured jurisdiction in United States v. Perrin, 580

F.2d 730 (Sth Cir. 1978), aff'd, 444 U.S. 37, 100 S.Ct. 311,

62 L.Ed.2d 199 (1979). In Perrin, the court rejected the

defense under the particular facts of that case, but it

recognized the validity of the defense in a proper case when

it stated that the ‘defendants’ argument that the govern-

ment improperly obtained jurisdiction is for the court to

determine as a matter of law....’ Jd. at 737. Therefore,

again without passing on the merits of the motion, I con-

clude that the defendants’ motion to dismiss on grounds of

artificially created jurisdiction also presents a cognizable

claim.

The two defense motions discussed above are not

patently frivolous; their determination will require an

evidentiary basis of some sort. Each motion looks to a

determination of whether the government acted unlawful-

ly, and each places in controversy the facts surrounding the

government's conduct in this case. Without evidence, I

cannot make the findings of fact, or draw the legal conclu-

sions necessary to decide defendants’ motions. Therefore,

having determined that these motions raise legitimate

defenses in law to criminal prosecutions, I also conclude

that an evidentiary hearing must be conducted. The re-

maining question is when such a hearing should be

conducted.

Fed.R.Crim.Pro. 12(b) provides that ‘‘[aJny defense,

objection, or request which is capable of determination

without the trial of the general issue may be raised before

trial by motion.” The rule then enumerates five kinds of

motions which must be raised prior to trial. Included are

defenses and objections ‘‘based on defects in the institution

of the prosecution” and ‘‘defenses and objections based

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on defects in the indictment or informationn.”’ In United

States v. Covington, 395 U.S. 57, 89 S.Ct. 1559, 23 L.Ed.2d

94 (1969), the Supreme Court interpreted substantially

similar language in the forerunner of the present Rules

12(b). In Covington, the Court stated that a defense is

capable of determination without trial of the general issue

“if trial of the facts surrounding commission of the alleged

offense would be of no assistance in determining the validi-

ty of the defense.’ Jd. at 60, 89 S.Ct. at 1561. The Court

noted that the rule permits factual hearings prior to trial

“if necessary to resolve issues of fact peculiar to the mo-

tion.” Id.

Under Fed.R.Crim.Pro. 12(e), however, I have the

discretion to defer for good cause the determination of such

motions until the trial or after the verdict. The rule

provides:

A motion made before trial shall be determined

before trial unless the court, for good cause,

orders that it be deferred for determination at the

trial of the general issue or until after verdict, but

no such determination shall be deferred if a par-

ty’s right to appeal is adversely affected. Where

factual issues are involved in determining a mo-

tion, the court shall state its essential findings on

the record.

The legislative history of Rule 12(e) indicates that the

Supreme Court initially proposed that the rule allow a

court ‘‘to defer ruling on a pretrial motion until the trial of

the general issue or until after the verdict’’ without men-

tion of ‘‘good cause.’’ H.R.Rep.No.94-247, 94th Cong., lst

Sess., reprinted in [1975] U.S.Code Cong. & Ad. News 674,

679-680. In reviewing the Supreme Court's proposals,

however, the Committee on the Judiciary of the House of

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Representatives modified the Supreme Court's proposal to

permit a court to defer its ruling on pretrial motions only

for good cause. The Committee's chief concern was that a

court not be allowed to defer its ruling if to do so would

adversely affect a party’s right to appeal, especially the

government's right to appeal pursuant to 18 U.S.C. § 3731.

The House Judiciary Committee intended its amendment

to ‘discourage the tendency to reserve rulings on pretrial

motions until after verdict in the hope that the jury’s ver-

dict will make a ruling unnecessary.” H.R.Rep.No.94-247,

94th Cong., lst Sess., reprinted in (1975] U.S. Code Cong.

& Ad.News 674, 6480.

The question here is whether there is ‘‘good cause”

within the meaning of Rule 12(e) to defer conducting an

evidentiary hearing and ruling on defendants’ motions un-

til trial of the case or after the verdict is rendered.

Although there is very little case law addressing the

issue of whether evidentiary hearings on motions like these

must be conducted prior to trial and whether the motions

must be decided pretrial, I find some guidance for my deci-

sion in two recent cases. In United States v. Criden et al.,

Crim. No. 80-166 (E.D.Pa., Aug. 18, 1980) (Fullam, J.), the

court was faced with a similar motion to dismiss the indict-

ment on grounds of governmental misconduct in one of the

Justice Department's ABSCAM prosecutions.” Judge

Fullam conducted several days of evidentiary hearings on

various motions brought by the defendants; nevertheless,

he concluded that resolution of the governmental mis-

2 ABSCAM is a code name for an undercover operation carried

out by the Justice Department at about the same time as the BRILAB

investigation. In ABSCAM, FBI agents set up an operation called

Abdul Enterprises, Inc., and posed as representatives of Middle Eastern

businessmen who sought assistance from public officials for business

enterprises.

A-19

conduct issue had to be deferred until trial when a full and

complete record would be available. In United States v.

Barletta, 500 F.Supp. 739 (D. Mass., 1980) (Tauro, J.), the

government brought a motion prior to retrial of a multi-

count indictment to admit evidence consisting of tape

recordings of telephone conversations between the defen-

dant and a government informer. The court decided to

defer conducting an evidentiary hearing or ruling on the

motion until trial. While the motion at issue in Barletta dif-

fers from those before me, I find that the interests suppor-

ting deferral in Barletta are applicable here. In Barletta,

Judge Tauro said:

It makes sense that pretrial proceedings be

designed to avoid, whenever possible, the time

consuming chore of hearing the same evidence

twice, first before and then during trial...

* * * * * *

Rule 12 was designed to avoid the wasteful

duplication of effort inherent in the government's

theory that would mandate pretrial determina-

tions of motions to admit without regard to any

good cause there may be to defer.... Our courts are

overburdened. Judges, therefore, have an obliga-

tion to expend judicial resources prudently. This

includes ensuring that valuable court time is not

wasted. A determination to defer in order to avoid

such waste is manifestly one made for good

cause....

x = a = * =

A precedent mandating that a district judge

hear the same evidence twice would be an impru-

dent imposition on the limited resources of the

judicial system.

Id., at 742, 744, 747.

\

A-20

In this case, defendants seek an ‘‘unfettered”’ inquiry

into the conduct of government officials. See defendants’

joint supplemental memo of Oct. 9, 1980. The allegations of

government misconduct before me at this time are vague,

and to permit an unstructured inquiry without limitation

at this stage of the proceeding would require hearings

which could last as long as the trial itself, with the defen-

dants hoping to uncover some wrongdoing by government

agents or officials. The facts that describe the govern-

ment’s undercover operation, the offenses attributed to the

defendants in the indictment, and the alleged acts of

misconduct imputed to government officials by the defen-

dants are intertwined. In my judgment, they cannot be suc-

cessfully disentangled. Most of the facts that the defen-

dants want to prove at a hearing will be elicited during the

complex and lengthy trial anticipated by both sides. This

point is best illustrated by the close relationship between

the defendants’ claims of governmental overreaching and

the classic defense of entrapment. See generally United

States v. Graves, supra, 556 F.2d at 1321-24. Although the

court in Graves pointed out that the defense of governmen-

tal misconduct ‘‘grounded on the dual principles of due pro-

cess and the supervisory powers of the court’’ is separate

and distinct from the defense of entrapment, id. at 1324,

the facts supporting the overreaching defense appear to be

included within the entrapment defense. Although in

Graves the Fifth Circuit left no doubt that it was not error

to consider the governmental misconduct defense pretrial,

id. at 1322-23, the court did not require that the motion be

disposed of pretrial or that evidentiary hearings concerning

the motion be conducted pretrial.

I am sensitive to the concerns expressed by counsel

for defendant Marcello at oral argument that insofar as

defendants’ motions would dispose of the case and spare

A-21

defendants the long ordeal and expense of trial if they are

granted, the evidentiary hearing should be conducted and

a ruling made on the motions now. These are important

concerns which I do not brush aside lightly. I find,

however, that in the context of this factually complex case,

the best course to protect both the defendants constitu-

tional rights and society's interest in the just and efficient

administration of criminal justice is to defer resolution of

the motions until trial of the case. At the time of the trial,

I can assess the full panoply of facts, including the conduct

of the FBI undercover agents and government attorneys

who conducted the investigation and the nature of the in-

terstate commerce elements of the offenses charged in the

indictment. The trial will also provide an opportunity for

counsel to define more precisely the areas of inquiry that

support their contentions, which at this time are rather

vague. Moreover, resolution of the issues presented by

defendants’ motions may require that defendants

themselves testify regarding the impact of the alleged over-

reaching or the existence of relationships required in the in-

terstate commerce element of the offense. If I find that fur-

ther hearings appear necessary or appropriate as a result of

the trial, they will be ordered immediately. The interests of

the defendants and of society are best served if these

serious motions are determined on the basis of a full eviden-

tiary record and a complete understanding of the facts of

this complex case. Therefore, I conclude that the eviden-

tiary hearing and resolution of these motions must be

deferred until trial.

In addition, counsel for defendant Marinello contend-

ed during oral argument of his separate motion to dismiss

that the RICO offenses charged in Counts | and II of the

indictment failed to state an effect on interstate commerce

as required by the RICO statute because Fidelity Financial

A-22

Consultants, the California firm set up by the Justice

Department as part of the investigation, was a purely fic-

titious operation through which insurance contracts could

never have been written. I requested that counsel for the

government and defendant Marinello submit supplemental

memoranda on the issue. As counsel for Marinello notes in

footnote 1 of his supplemental memorandum, this argu-

ment is in fact closely related to defendants’ joint motion

to dismiss on grounds of artificially-created jurisdiction.

Since I have deferred until trial my ruling on the motion to

dismiss on grounds of artificially-created jurisdiction, I will

also reserve judgment on this argument until that time. In

all other respects, the motion to dismiss brought in-

dividually by defendant Marinello is denied.

B) Selective Prosecution

Defendant Marcello’s motion to dismiss the indict-

ment on grounds of discriminatory and arbitrary selective

prosecution stands in 4 slightly different procedural

posture from the two motions discussed above. Like those

motions, the motion to dismiss for selective prosecution

raises a cognizable defense to a criminal prosecution. The

Fifth Circuit has ruled, however, that a defendant bears a

heavy burden of establishing, at least prima facie, that (1)

he has been singled out for prosecution while others

similarly situated have not generally been proceeded

against for similar conduct, and (2) the government's

discriminatory selection of him for prosecution has been in-

vidious or in bath faith, i.e, based upon such impermissible

con® derations as race, religion, or the desire to prevent his

exercise of constitutional rights. See United States v.

Johnson, 577 F.2d 1304, 1308 (5th Cir. 1978); United states

v. Kahl. 583 F.2d 1351, 1353 (5th Cir. 1978). There has been

some disagreement among the circuits, however, over the

A:23

second prong of the test stated above. Some decisions have

indicated that relief may be available when intentional or

purposeful discrimination is practiced against an in-

dividual, even though the discrimination is not class-based.

See United States v. Torquato, 602 F.2d 564, 569 n.9 (3d

Cir. 1979), cert. denied, 444 U.S. 941, 100 S.Ct. 295, 62

L.Ed.2d 307 (1980); United States v. Falk, 479 F.2d 616,

619 (7th Cir. 1973).

Criminal prosecutions are generally presumed to

have been undertaken in good faith and nondiscriminatori-

ly, United States v. Catlett, 584 F.2d 864, 866 (8th Cir.

1978); United States v. Falk, supra, 479 F.2d at 620, and

the burden of proving discriminatory selective prosecution

is on the defendant. Several courts have held that in order

to minimize intruding on the largely discretionary pro-

secutorial function while still enabling defendants effec-

tively to raise claims of selective prosecution, the defen-

dant is obligated to make a threshold showing of

discriminatory prosecution before an evidentiary hearing

will be conducted on this defense. Jn re Grand Jury, 619

F.2d 1022, 1030 (3d Cir. 1980); United States v. Torquato,

supra, 602 F.2d at 569-70, and cases cited therein. Before

a hearing will be conducted, some credible evidence must

be adduced showing that the government intentionally and

purposefully discriminated against the defendant. Jd. at

570. In Torquato, for example, the Third Circuit denied

defendant's request for a post-trial evidentiary hearing on

the question of selective prosecution, finding that even

after a full trial on the merits, defendant had failed to show

a sufficient factual basis to require that an evidentiary

hearing be held. Jd. at 572.

In this case, defendant Marcello has not preliminari-

ly adduced any credible evidence of his discriminatory

A-24

selective prosecution by the government. Defendant’s mo-

tion papers contain speculation that the prosecution is in

some way tied to government ‘‘frustration”’ over its inabili-

ty to prevail in a deportation proceeding presently pending

against Marcello. The motion also asserts without any ap-

parent evidentiary backing that the government has ar-

bitrarily and falsely labeled Marcello as an Organized

Crime chieftain. Defendant comes closest to adducing some

credible evidence of selective prosecution when he argues

that some of the consensually obtained tape recordings

made by the government with the assistance of its chief in-

former, Joseph Hauser, show that Marcello was unlawfully

selected and pursued by the government as the target of its

investigation. Defendant has pointed to no specific conver-

sations on these tapes, however, that would tend to provide

the prima facie showing he must make to be entitled to a

full evidentiary hearing on this issue.

Shortly after I made my oral ruling deferring an

evidentiary hearing and resolution of defendants’ over-

reaching and artificially created jurisdiction motions until

trial, counsel for defendant Marcello requested that I also

defer ruling on his motion to dismiss on grounds of selec-

tive prosecution, and I have agreed to defer it. It may be

that some evidence will be adduced at the trial that will be

useful in deciding this motion or that will require that I

conduct further evidentiary hearings after the trial.

C) Prejudicial Publicity

Defendants’ motion to dismiss the indictment, or

alternatively for sanctions, on grounds that they were pre-

judiced by government-initiated leaks to the news media

also requires that I determine whether extensive pretrial

evidentiary hearings must be conducted. Defendants first

A-25

contend that pre-indictment publicity engendered by leaks

to the press by government sources so tainted the grand

jury process that their Fifth Amendment rights to fun-

damental fairness and due process of law have been ir-

reparably impaired. The alternative of defendants’ motion

seeks sanctions because government officials who leaked

information to the news media violated Fed.R.Crim.Pro.

6(e), internal guidelines of the United States Justice

Department, and Rules 13.1 and 13.2,3 Local Rules of the

United States District Court for the Eastern District of

Louisiana. Defendants’ request for an evidentiary hearing

on this part of their motion is clearly governed by the Fifth

Circuit's decision in Jn re Grand Jury Investigation, T. Ber-

tram Lance v. United States Department of Justice (the

Lance case), 610 F.2d 202 (5th Cir. 1980). In a thorough and

well-reasoned opinion, Lance provides guidelines to the

general question of when to hold an evidentiary hearing on

alleged violations of the traditional policy of grand jury

secrecy. After reviewing the existing evidentiary record

2 Local Rule 13.1 provides:

It is the duty of the lawyer for each of the parties not to

release or authorize the release of information or opinion in

connection with pending or imminent criminal litigation

with which he is associated, for dissemination by any means

of public communication, if there is a reasonable likelihood

that such dissemination will interfere with a fair trial or

otherwise prejudice the due administration of justice.

Local Rule 13.2 provides:

When there is a grand jury or other pending investigation of

any criminal matter, a lawyer participating in the investiga-

tion shall refrain from making any extrajudicial statements

for dissemination by any means of public communication

that goes beyond the public record or that is not necessary

to inform the public that the investigation is under way, to

describe the general scope of the investigation, to obtain

assistance in the apprehension of a suspect, or to warn the

public of any dangers, or otherwise to aid the investigation.

A-26

and analyzing the factors outlined in the Lance case, I con-

clude that no further evidentiary hearing is required and

that insofar as defendants’ motion seeks dismissal of the

indictment, the motion is denied.

I note initially that the evidentiary record that

already exists provides evidence determinative of this mo-

tion. The defendants initially submitted as exhibits attach-

ed to their motions fifteen newspaper articles and one

transcript of a television newscast, all of which were releas-

ed between February and June 1980 when the media fre-

quently reported on the pending BRILAB investigation.

The defendants later supplemented these with several

other newspaper articles from publications across the coun-

try. In addition, I have received and reviewed affidavits

submitted by seven government attorneys denying that

they disclosed matters concerning the investigation to any

unauthorized persons and also denying any knowledge that

any other participants in the investigation disclosed secret

matters. At my request, I was also provided with a copy of

the so-called Blumenthal Report, an extensive document

prepared by the Justice Department which reviews in

detail its confidential and internal investigation aimed at

discovering the sources of leaks to the news media that

ocurred during the government’s principle ‘‘sting’’ opera-

tions, including BRILAB. Finally, at defendants’ request,

I have reviewed transcripts of the proceedings of the grand

jury that returned the indictment in this case. In addition

to this evidence, defendants had subpoenaed at the time of

the hearings on this motion several members of the press

whose news stories appeared during the investigation and

a number of Justice Department attorneys and officials,

presumably to elicit their testimony about the source of

news leaks. Based on the arguments of counsel and the evi-

dence already at my disposal, I decided those subpoenaed

A-27

need not testify at this time.

While Lance involved facts different in several

respects from those here, its teachings are applicable.

Lance requires that in determining whether the moving

party has established a prima facie case of prejudicial and

unlawful leaks of secret grand jury information sufficient

to require a broad evidentiary hearing, a court must con-

sider five factors. First, there must be a clear indication

that the media reports disclose information about matters

occurring before the grand jury. 610 F.2d at 216. In this

case some of the articles about which defendants complain

rely for their sources on defendants themselves, see e.g.,

defendants’ exhibit F or on court documents and records.

See, e.g., defendants’ exhibit A, paragraph 1; defendants’

exhibit N. Some do appear, however, to disclose informa-

tion about matters occurring before the grand jury. See,

e.g., defendants’ exhibits L, M, O, P.

Second, the articles must “‘indicate the source of the

information revealed to be one of those proscribed by Rule

6(e)."’ Id. at 217. Those sources include grand jurors, court

reporters, typists, government attorneys, and other gov-

ernment officials to whom disclosure may be made under

the rule. Scattered throughout the articles submitted by

the defendants are references to ‘‘sources close to the in-

vestigation,’ ‘‘Federal sources,’ ‘‘Justice Department

sources’’ and simply ‘‘sources.’’ No reference is made in

any of the articles to a particular person or persons, and in

some of the articles, high-ranking officials in the Office of

the United States Attorney and the FBI are reported to

have specifically refused to comment or give out details on

the investigation. See, e.g, defendants’ exhibit D.

However, in determining whether these vague origins

A-28

actually implicate sources prohibited by Rule 6/e), it is

necessary to consider the nature of the material disclosed.

Id. at 217-18. In some instances, it is reasonable to infer

from the nature of the disclosure made that the ‘‘sources’’

referred to in the article are included within those

enumerated in Rule 6/e).

Third, ‘in assessing the what and who of disclosure

at the prima facie case stage, the court must assume that

all statements in the news report are correct.’ Jd. at 219.

I have done so in this case.

Fourth, the nature of the relief requested and the ex-

tent to which it interferes with the grand jury process must

be considered. A defendant seeking dismissal of an indict-

ment ‘‘bears a heavy burden in attempting to justify such

relief.’’ Jd. On the other hand, a prima facie case requiring

a hearing on whether to impose sanctions does not require

as strong a showing. In this case, defendants seek both

forms of relief—dismissal and contempt sanctions.

Fifth, the court must weigh any evidence presented

by the government to rebut the assumed truthfulness of

reports which otherwise make a prima facie case of miscon-

duct. Jd. at 219. In Lance, government attorneys provided

no evidence denying misconduct and the court found that

the articles presented by Lance in support of his motion

made a sufficient prima facie case to warrant an eviden-

tiary hearing ‘‘in the absence of any affidavit by the Justice

Department attorneys denying that they, their associates,

or their superiors divulged the information appearing in

the newspaper articles.’’ Jd. at 220-21 (emphasis added).

The absence of affidavits appeared to be a key factor in the

court’s decision to remand the Lance case to the district

court for a factual analysis of ‘‘whether the showing made

A-29

by Lance would still warrant an evidentiary hearing even

if a responsive affidavit should be filed by government

counsel.’’ Jd. at 221. I note in this case that while I have

received affidavits from seven government attorneys who

conducted the grand jury investigation locally, I have

received nothing from the FBI agents or other government

officials who may have been privy to the grand jury

proceedings.

Insofar as defendants’ motion seeks dismissal of the indict-

ment, the fourth and fifth factors of the Lance test weigh

heavily against conducting any further evidentiary hear-

ing. As Lance points out, a ‘criminal defendant who seeks

to obtain dismissal of an indictment...bears a heavy burden

in attempting to justify such relief.’’ Jd. at 219. This heavy

burden requires a showing of prejudice to the defendants or

abuse of the grand jury process by the government. See

United States v. Thomas, 593 F.2d 615, 623 (5th Cir. 1979);

United States v. Malatesta, 583 F.2d 748, 753-54 (5th Cir.

1978), cert. denied, 444 U.S. 846, 100 S.Ct. 91, 62 L.Ed.2d

59 (1979). Defendants have failed to bear that heavy

burden in this case. I have examined carefully the tran-

scripts of the grand jury proceedings, and I have found

nothing to indicate that the grand jury process which led

to these indictments was in any way affected by publicity

or by any misconduct by government attorneys. Instead,

the indictment appears to have been the result solely of the

evidence that was presented to the grand jury. My review

of these transcripts and the existing evidentiary record

convinces me that an evidentiary hearing on the motion to

dismiss is unnecessary and that no abuse of the grand jury

process resulting in prejudice to the defendants occurred.

Therefore, the motion to dismiss the indictment on these

grounds is denied.

A-30

Defendants’ motion for sanctions, however, presents

a slightly different situation. The Lance case notes that a

defendant’s burden in showing a prima facie case sufficient

to require an evidentiary hearing on a motion for sanctions

does not require as strong a showing as the motion to

dismiss. The defendants have submitted newspaper ar-

ticles and a broadcast transcript, portions of which appear

to satisfy the first three elements of the Lance standard for

conducting an evidentiary hearing. On the other hand, the

government has submitted affidavits rebutting the assum-

ed truthfulness of the news reports. Moreover, I have

reviewed the Blumenthal Report, and found it inconclusive

at best since it buttresses the government's affidavits in

some respects and the defendants’ claims in others. In

Lance the Fifth Circuit remanded the case to the district

court for factual analysis of whether the preliminary show-

ing would warrant an evidentiary hearing if the govern-

ment filed responsive affidavits. In this case, the govern-

ment has filed affidavits which are only partially respon-

sive. Rule 6(e) imposes an obligation of secrecy not only on

government attorneys, but also on FBI officials and others

who participate in the grand jury proceedings. I have defer-

red my ruling on defendants’ motion for sanctions. The

government may supplement its proffer, if it can, by filing,

no later than February 2, 1981, affidavits of FBI agents or

other officials who participated in the grand jury pro-

ceeding. At that time I will again review the materials sub-

mitted by defendants, the affidavits, and the Blumenthal

Report to determine what further action, if any, by way of

evidentiary hearing or court-ordered investigation is

appropriate.

IV. Motions to Suppress the Consensually Recorded Tapes

Central to the government's case are the electron-

A-31

ically recorded conversations between informer Joseph

Hauser and some of the defendants. The defendants argue

that the tapes were unlawfully obtained because Hauser’s

consent was not given freely and voluntarily, knowingly

and understandingly, and they are therefore inadmissible.

In an effort to compel an evidentiary hearing on the issue

of Hauser’s consent, the defendants submitted with their

motions evidence which they contended constituted a suffi-

cient preliminary showing of Hauser’s incapacity to con-

sent. Included in their proffer was a transcript of Hauser’s

February 5, 1979 guilty plea before the Honorable William

C. Frey, United States District Judge for the District of

Arizona, United States v. Hauser, No. CR-78-313 (D.Ariz.,

Feb. 5, 1979), to RICO charges arising from a scheme to

swindle health, welfare and pension funds from labor

unions. Defendants contend the facts surrounding the guil-

ty plea are relevant because it was entered contem-

poraneously with Hauser’s decision to cooperate with the

government by taping his conversations. They argued that

Hauser made several statements that indicate he could not

have knowingly and voluntarily consented to the

recordings.4

4 For example, the defendants point out that Hauser told Judge

Frey that as an adolescent in Poland during World War II he was struck

on the head with a bar when he tried to escape from an internment camp

(defendant Marinello, exhibit 2, plea transcript p. 5). Hauser also said

that he had been ‘‘under a tremendous pressure” for the last five years

and that at the time he changed his plea he was taking twenty pills a

day, including Dilantin, Valium, Mellaril and Benzedrine (transcript p.

8). Hauser also said that his doctor told him that at times his medication

took away his ability to reason and understand, and that at his physi-

cian's suggestion he had seen a psychiatrist for treatment of depression.

(Transcript pp. 10-13). It should be noted, however, that despite these

problems Hauser assured Judge Frey that he fully understood the pro-

ceeding and the charges to which he pleaded guilty, and Judge Frey ac-

cepted the plea.

A-32

In support of their claim of incompetence, the defen-

dants also submitted the affidavit of Dr. Kenneth Ritter, a

psychiatrist who reviewed a portion of Hauser’s guilty plea

and concluded that some of the drugs Hauser was taking

“have the capacity to alter levels of consciousness,

awareness, alertness, and mood’ and are normally

prescribed to treat serious mental or brain disorders that

“may profoundly affect a person’s capacity to freely give

unbiased consent.’’ In addition, defendants pointed out

portions of the early consensual tapes in which Hauser said

he was under mental and financial pressure. In anticipation

of a hearing on the issue of Hauser’s ability to consent,

defendants subpoenaed Hauser’s medical records from his

personal physician in California.

On the basis of this preliminary showing and to allow

the parties a meaningful opportunity to meet their burdens

on this issue, I conducted an evidentiary hearing limited to

the question of Hauser’s consent. See generally United

States v. Glickman, 604 F.2d 625, 629, 633 (9th Cir. 1979),

cert. denied, 444 U.S. 1080, 100 S.Ct. 1032, 62 L.Ed.2d 764

(1980); United States v. Phillips, 540 F.2d 319, 324 (8th

Cir.), cert. denied, 429 U.S. 1000, 97 S.Ct. 530, 50 L.Ed.2d

611 (1976); United States v. Napier, 451 F.2d 552 (5th Cir.

1971). At the hearing, the government introduced into

evidence seven consent forms executed by Hauser in the

presence of FBI agents in which he agree to allow his con-

versations to be recorded. The government also called as

witnesses FBI Agents William Wiechert and Thomas Rup-

prath, who witnessed the signing of the forms. They

testified that Hauser’s demeanor at the time he executed

the forms was “‘‘rational and normal’”’ and that Hauser ap-

peared lucid and in control of his faculties. They also

testified that Hauser was not threatened, physically abus-

ed, or in any way coerced before signing the forms. Agent

A-33

Wiechert said that while he occasionally saw Hauser tak-

ing pills, he appeared to be lucid and not suffering from any

debilitating effects from the pills.

Over the government’s objection, I permitted the

defendants to examine Hauser’s medical records, and they

were reviewed by Dr. Ritter. On the following day, Dr. Rit-

ter testified that the drug dosages Hauser was taking at or

about the time of his agreement to consent to the tapings

was a ‘formidable dose of medication’’ which itself could

have affected Hauser’s ability to consent, although it was

possible for some persons to function quite well under the

same dosages. He concluded based on the limited informa-

tion available to him that it was possible that Hauser

might have been incapable of consenting. After being given

the opportunity to review the full transcript of Hauser’s

guilty plea, the doctor testified that it appeared that

Hauser understood the exhaustive questioning and the

nature and meaning of his plea of guilty at the time.

Finally, I allowed counsel to question Hauser himself

as part of the evidentiary hearing. Hauser identified the

consent forms and testified that the FBI agents explained

them to him, that the agents made no threats or promises

to him, and that he understood the nature and content of

the forms when he signed them. Hauser testified that

although he was taking medication at the time he con-

sented to the recording of his conversations, his senses

were not impaired. At the conclusion of Hauser’s

testimony, the defendants requested that I compel a

psychiatric examination of Hauser which I declined on the

basis of the evidentiary record. After considering the

testimony of the witnesses, the transcript of Hauser’s

Arizona guilty plea, the documentary evidence submitted

by the parties, and having listened to the consensual tape

A-34

recordings prior to the hearings, I determined that

Hauser’s consent to the recording of his conversation was

given freely and voluntarily, knowingly and understan-

dingly as required by law.

Knowing and voluntary consent is a requisite to

lawful interception of consensually recorded conversations.

See 18 U.S.C. § 2511(2)(c) and (d); United States v. Juarez,

573 F.2d 267, 278 (5th Cir.), cert. denied, 439 U.S. 915, 99

S.Ct. 289, 58 L.Ed.2d 262 (1978). Some circuits have stated

that consent will ordinarily be established if the govern-

ment shows merely that the informant engaged in the con-

versation knowing that it was being taped. United States

v. Glickman, supra, 604 F.2d at 633; United States v.

Fuentes, 563 F.2d 527, 533 (2d Cir.), cert. denied sub nom.,

Sansone v. United States, 434 U.S. 959, 98 S.Ct. 491, 54

L.Ed.2d 320 (1977); United States v. Kirk, 534 F.2d 1262,

1272-73 ‘8th Cir. 1976), cert. denied, 433 U.S. 907, 97 S.Ct.

2971, 53 L.Ed.2d 1091 (1977); United States v. Bonnano,

487 F.2d 654, 658-59 (2d Cir. 1973). In Glickman, the Ninth

Circuit summarized this general approach by saying:

The extent of proof required to show that an in-

former consented to the monitoring or recording

of a conversation is considerably less stringent

than that needed to show consent to a physical

search. The reasons for this less stringent stan-

dard regarding conversations is that....{aJn in-

former's consent to the monitoring or recording

of a telephone conversation is an incident to a

course of cooperation with law enforcement of-

ficials on which he has ordinarily decided some

time previously and entails no unpleasant conse-

quences to him.

In order to establish consent to taping of con-

versations, it wilf ordinarily suffice for the gov-

A-35

ernment to show that the informant engaged in

the conversation knowing that it was being

taped.

604 F.2d at 633-34 (citations omitted). A panel of the Fifth

Circuit, however, has indicated that the validity of an in-

former's consent to the recording of his conversations must

be measured against the more stringent standard of con-

sent to a physical search. In United States v. Napier, 451

F.2d 552, 553-54 (5th Cir. 1971), the court cited its decision

in United States v. Elrod, 441 F.2d 353 (5th Cir. 1971), a

case involving the validity of a defendant's consent to a

search of his hotel room, as providing the proper standard

for determining the effect of mental capacity on the ability

to consent to the recording of conversations.” In Elrod, the

court said that ‘‘a determination of the question of free and

voluntary consent requires a determination that the person

was mentally competent to understand the nature of his

act when he signed the ‘Consent to Search’ form.’’ 441 F.2d

at 355 (emphasis by the court). The court said that the act

of consent must be ‘‘the consensual act of one who knew

what he was doing and had a reasonable appreciation of the

nature and significance of his actions.’’ Jd.

Regardless which standard is applied in this case,

however, I conclude that Hauser was mentally capable of

freely and voluntarily consenting to the recording of his

conversations, and that he did so. The consent forms, the

agents’ testimony, Hauser’s testimony during the eviden-

tiary hearing, and the transcript of his guilty plea, which

was accepted by Judge frey, convince me that Hauser's

° In a footnote in Glickman, the Ninth Circuit recognized the dif-

ferent standard applied by the Fifth Circuit in Napier and Elrod, but rul-

ed that Napier and Elrod were inapposite to the facts of Glickman. See

United States v. Glickman, supra, 604 F.2d at 634 n.5.

A-36

consent was knowingly and understandingly given.

Moreover, one need not listen too long to the tape recor-

dings themselves to become satisfied beyond peradventure

of doubt that they were made freely and with full

understanding of what was going on. I| therefore conclude

that the defendants’ motions to suppress the consensually

recorded conversations must be denied.

In addition to the grounds discussed above, defen-

dant Davidson argues that because (1) Hauser was not ac-

ting ‘‘under color of law’’ as required by 18 U.S.C. §

2511(2)ic), and (2) the taping was for purposes of commit-

ting criminal, tortious, or injurious acts by Hauser, a per-

son not acting under color of law, and the tapes were

therefore unlawfully made under 18 U.S.C. § 2511(2)(d) and

must be suppressed. I find that these arguments are

without merit. Section 2511(2)(c) provides that it ‘shall not

be unlawful...for a person acting under color of law to in-

tercept a wire or oral communication, where such person is

a party to the communication or one of the parties to the

communication has given prior consent to such intercep-

tion.’’ The courts have generally held that where an in-

former is acting under the direction and supervision of

government investigators, as the evidence indicates

Hauser was doing in this case, the informer is acting under

color of law within the meaning of the statute. See United

States v. Rich, 518 F.2d 980, 985 (8th Cir. 1975), cert.

denied, 427 U.S. 907, 96 S.Ct. 3193, 49 L.Ed.2d 1200 (1976);

United States v. Ransom, 515 F.2d 885, 890 (5th Cir. 1975),

cert. denied, 425 U.S. 945, 96 S.Ct. 1687, 48 L.Ed.2d 189

(1976). Since I conclude that Hauser was acting under color

of law in this way, it is unnecessary to reach defendant's se-

cond argument, which is prefaced on the assumption that

Hauser was not acting under color of law, and defendant

Davidson's motion to suppress on these grounds is denied.

A:37

V. Motions to Suppress the Court-Ordered Wiretaps

In their motions to suppress the court-ordered

wiretaps, the defendants contend that their tape-recorded

conversations made pursuant to wiretap orders issued by

United States District Judges under 18 U.S.C. § 2510 et

seq. are inadmissible for a variety of reasons. Their chief

arguments are that (1) the orders authorizing the wiretaps

were not founded on a showing of probable cause; (2) FBI

agents and government attorneys misrepresented and

omitted material facts in the affidavits accompanying the

applications for authorization to tap defendants’

telephones; and (3) the government did not comply with the

requisite statutory provisions permitting wire intercepts.

The defendants contend that each subsequent application

for a wiretap order in the long series of intercepts authoriz-

ed in this investigation builds upon the fruits of the

previous orders. Thus, defendants have concentrated their

challenges® on the earliest applications and orders of May

4, June 13, and June 14, 1979.

© It is undisputed in this case that defendants Davidson and

Marcello have standing to challenge any and all of the wiretap orders,

and they have brought their own motions or adopted the arguments of

their co-defendants in seeking suppression of these tapes. The govern-

ment has challenged the standing of defendants Marinello, roemer, and

Young to attack the early wiretap iy AS that as to these

orders they are not ‘aggrieved persons’ within the meaning of 18

U.S.C. § 2518(10a) and Alderman v. United States, 394 U.S. 165, 89

S.Ct. 961, 22 L.Ed.2d 176 (1969). I agree, however, with defendants’ con-

tention that each subsequent wiretap order issued in the long series of

orders in this case built upon previously issued orders to establish pro-

bable cause. It is clear that all defendants eventually became ‘aggrieved

persons’’ at one point or another in the series of wiretap orders. Since

the early wiretap orders formed the linchpin upon which all later fin-

dings of probable cause and the wiretap orders were based, I conclude

that all defendants have standing to raise these challenges to the

wiretap orders. Therefore, I have allowed counsel for all defendants to

present their arguments on these motions.

A-38

The affidavits upon which defendants focus their at-

tack are virtually identical; each can be divided into two

sections. In the May 4, 1979 affidavit of FBI Agent

Charles Waker, for example, the first 14 paragraphs con-

sist of background information purportedly provided in an

April 4, 1979 conversation between Walker and Hauser in

which Hauser described past dealings he allegedly had with

defendants Marcello and Davidson. The second part of the

affidavit contains information purportedly gleaned from

recorded telephone and personal communications of David-

son, Marcello and Hauser made by the FBI with Hauser’s

consent. Walker stated in the affidavit that he had per-

sonally reviewed each of the conversations and summariz-

ed their content. Walker's May 4 affidavit was included in

the application for the initial wiretap order prepared by

government attorney Bruce Kelton and submitted to

United States District Judge Charles R. Richey in

Washington, D.C. It appears in substantially similar form

along with another affidavit in which FBI Agent Doug

Bird purportedly summarizes additional telephone conver-

sations intercepted pursuant to the May 4 order in the

June 13 application, and again above Walker’s signature in

the June 14 application. Both Walker and Kelton testified

extensively during the evidentiary hearings.

A) Sufficiency of the Affidavits: Probable Cause,

Misrepresentations, and Omissions

Defendants’ arguments that the recordings are inad-

missible because the orders were not supported by pro-

bable cause and because there were material misrepresenta-

tions and omissions in the affidavits supporting each

wiretap application are somewhat related. Both involve the

ultimate question of the sufficiency and validity of the af-

fidavits supporting the determination of probable cause to

A-39

wiretap. The arguments require that i inquire into (1) the

‘facial’ sufficiency of the affidavits and whether the hear-

say and double hearsay statements in the background

paragraphs provided by Hauser are sufficient to support a

finding of probable cause, and (2) the ‘‘subfacial’’ sufficien-

cy of the affidavits and whether there were material mis-

representations and omissions that affected the

magistrate’s determination of probable cause.

An order authorizing a wiretap, like an ordinary

search warrant, must be supported by a magistrate’s fin-

ding of probable cause. 18 U.S.C. § 2518(3)(a); United

States v. Weinrich, 586 F.2d 481, 487 (5th Cir. 1978), cert.

denied, 441 U.S. 927, 99 S.Ct. 2041, 60 L.Ed.2d 402 (1979);

United States v. Hyde, 574 F.2d 856, 862 (5th Cir. 1978). In

general, probable cause exists where “the facts and cir-

cumstances within the affiant’s knowledge, and of which he

has reasonably trustworthy information, are sufficient un-

to themselves to warrant a man of reasonable caution to

believe that an offense has been or is being committed.”’

Berger v. New York, 388 U.S. 41, 55, 87 S.Ct. 1873, 1881,

18 L.Ed.2d 1040 (1967). The Supreme Court has recognized

that ‘‘only the probability, and not a prima facie showing,

of criminal activity is the standard of probable cause,”’ and

that magistrates may use their common sense in determin-

ing the existence of probable cause. Spinelli v. United

States, 393 U.S. 410, 419, 89 S.Ct. 584, 590-91, 21 L.Ed.2d

637 (1969). See also United States v. Davis, 617 F.2d 677,

659 (5th Cir. 1979). A magistrate'’s determination of pro-

bable cause should be paid great deference by reviewing

courts, as long as the magistrate has performed his in-

dependent function and no. served merely as a rubber

stamp for the police. Aguilar v. Texas, 378 U.S. 108, 111,

84 S.Ct. 1509, 1512, 12 L.Ed.2d 723 (1964); See Spinelli v.

United States, supra, 393 U.S. at 419, 89 S.Ct. at 591;

A-40

United States v. Davis, supra, 617 F.2d at 692. When the

magistrate’s finding of probable cause is based on his

review of the entire picture presented to him and the use of

his own judgment and common sense, his determination is

conclusive in the absence of arbitrariness. United States v.

Weinrich, supra, 586 F.2d at 487; United States v. Hyde,

supra, 574 F.2d at 862.

The defendants’ arguments in these motions to sup-

press raise what the Fifth Circuit has described as

challenges to both the ‘facial sufficiency’ of the affidavits.

See United States v. Martin, 615 F.2d 318 (5th Cir. 1980).

An attack on the facial sufficiency of the affidavit involves

the information contained within the four corners of the af-

fidavit itself. A challenge to the subfacial validity of the af-

fidavit goes beyond the document and concerns itself with

alleged misrepresentations and omissions that could have

affected the magistrate’s assessment of probable cause.

In this case, defendants challenge the facial sufficien-

cy of the affidavits by arguing that the hearsay and double

hearsay information provided to the affiant by Hauser and

the information gleaned from the consensually recorded

taped communications were insufficient to support a fin-

ding of probable cause. Where the information contained in

an affidavit supporting a wiretap order is obtained from an

informer such as Hauser, the magistrate’s determination of

probable cause must be measured against the dual test

established by Aguilar v. Texas, supra, and Spinelli v.

United States, supra. First, the affidavit must provide the

magistrate with the underlying facts from which the infor-

mant concluded that criminal activity was occurring or had

taken place, and these facts must warrant an inference of

criminal activity. Second, the affidavit must provide facts

establishing the probable credibility of the informer or the

A-4]

reliability of his information. Both requirements must be

satisfied; if either is not met, the affidavit cannot establish

probable cause. United States v. Martin, supar, 615 F.2d at

324. I conclude in this case that both elements of the

Aguilar-Spinelli test are satisfied on the face of the

affidavits.

The background portion of the affidavit sets out suf-

ficient facts as related by the informer, Hauser, taken as a

whole and read in context with the entire affidavit to war-

rant an inference that criminal activity related to the ac-

quisition of insurance contracts through corrupt influence

and bribery had occurred in 1976. Similarly, the affidavit

contains sufficient facts provided by the consensually-

made tape recordings to warrant an inference that in-

fluence and payoffs were to be used to obtain public

employee insurance contracts in Orleans and Jefferson

Parishes in 1979. I conclude from my reading of the af-

fidavits that sufficient facts were stated to satisfy the first

element of the Aguilar-Spinelli test. Similarly, the detailed

affidavits submitted in support of the early wiretap ap-

plications also supplied the judges who issued the orders

with sufficient facts to determine the probable credibility

and reliability of the informer. The information contained

in the background portion of the affidavit related to the

1976 transactions is detailed and is based largely on

Hauser’s personal knowledge, observations, and participa-

tion in the activity. Much of the background information

concerning Hauser’s past dealings with Marcello and

Davidson is corroborated by the consensual recordings

which are the source of the information contained in the se-

cond part of the affidavits. The affidavit informs the

magistrate that despite Hauser’s past dealings with

Marcello and Davidson, he was now cooperating with the

FBI by taping conversations in connection with the

A-42

investigation, (May 4, 1979 affidavit of Walker, § 15), and

that a federal criminal prosecution was pending against

Hauser at the time he was becoming involved as an in-

former in the BRILAB investigation (May a4, 1979) af-

fidavit of Walker, € 52). In short, the information set out in

the affidavits provided the magistrates with sufficient

evidence to warrant a finding of probable cause, and those

findings should not now be disturbed.

Defendants’ challenge to the subfacial sufficiency of

the affidavits argues that the affidavits are flawed by

material misrepresentations and omissions that undermine

the affidavits and vitiate the finding of probable cause.

These arguments go beyond the four corners of the af-

fidavits to attack the probable cause determinations. The

validity of such subfacial challenges to affidavits presented

in support of warrants was recognized by the Supreme

Court in Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674,

57 L.Ed.2d 667 (1978), and has also been recognized by the

Fifth Circuit. United States v. Martin, supra, 615 F.2d at

328; United States v. Astroff, 578 F.2d 133 (5th Cir. 1978).

In Franks, the Court recognized a defendant's right to

challenge the truthfulness of statements made by the af-

fiant in an affidavit supporting a warrant and ruled that in

some circumstances a pretrial evidentiary hearing on the

issue might be required. If at the hearing ‘'the allegation of

perjury or reckless disregard [for the truth] is established

by the defendant by a preponderance of the evidence, and,

with the affidavit's false material set to one side, the af-

fidavit’s remaining content is insufficient to establish pro-

bable cause, the search warrant must be voided and the

fruits of the search excluded to the same extent as if pro-

bable cause was lacking on the face of the affidavit.’’ 438

U.S. at 156, 98 S.Ct. at 2676. In a summary at the end of

its opinion, the Court said:

A-43

There is, of course, a presumption of validity

with respect to the affidavit supporting the

search warrant. To mandate an evidentiary hear-

ing, the challenger’s attack must be more than

conclusory and must be supported by more than

a mere desire to cross-examine. There must be

allegations of deliberate falsehood or of reckless

disregard for the truth, and those allegations

must be accompanied by an offer of proof. They

should point out specifically the portion of the

warrant affidavit that is claimed to be false; and

they should be accompanied by a statement of

supporting reasons. Affidavits or otherwise

reliable statements of witnesses should be fur-

nished, or their absence satisfactorily explained.

Allegations of negligence or innocent mistake are

insufficient. The deliberate falsity or reckless

disregard whose impeachment is permitted today

is only that of the affiant, not of any nongovern-

mental informant. Finally, if these requirements

are met, and if, when material that is the subject

of the alleged falsity or reckless disregard is set to

one side, there remains sufficcient content in the

warrant affidavit to support a finding of probable

cause, no hearing is required. On the other hand,

if the remaining content is insufficient, the defen-

dant is entitled, under the Fourth and Fourteenth

Amendments, to his hearing. Whether he will

prevail at that hearing is, of course, another issue.

438 U.S. 171-72, 98 S.Ct. 2684-85 (emphasis added). While

Franks deals only with misrepresentations in the affidavit,

the Fifth Circuit has held by analogy to Franks that ‘‘omis-

sions...made intentionally or with reckless disregard for the

accuracy of the affidavit’’ may also vitiate a finding of pro-

bable cause. United States v. Martin, supra, 615 F.2d at

329.

A-44

Using Franks as my guide, I determined that defen-

dants had made a sufficient preliminary showing of possi-

ble misrepresentations and omissions in the affidavit to

warrant an evidentiary hearing. At that hearing, the

testimony of FBI Agent Charles Walker, the affiant in the

May 4, 1979 application for a wiretap order, and Bruce

Kelton, the government attorney who prepared the initial

application, was taken. In addition, defendants submitted

a substantial amount of documentary evidence. Also ad-

mitted into evidence during this hearing were copies of the

consensually recorded taped communications of Hauser,

Marcello, and Davidson made prior to the May 4 applica-

tion and accompanying transcripts of the tapes prepared

by the government. I have now carefully reviewed the

evidence and listened to the tape recordings and I conclude

that defendants’ motions to suppress on these grounds

must be denied. It is true, as defendants have pointed out,

that there were some misrepresentations and omissions in

the affidavits, but in each instance they were either

unintentional or were not made recklessly, or they were im-

material to a finding of probable cause. Most of what the

defendans characterize as unlawful misrepresentations are,

in fact, reasonable inferences and interpretations which can

be drawn from a review of all the tapes and an understan-

ding of the statements in the entire context of the series of

conversations among the participants.

It is unnecessary to address each of the arguments

and allegations raised by the defendants, but a few ex-

amples will illustrate my views. In paragraph 20 of the

affidavit, the affiant describes a conversation between

Hauser and Marcello in which Hauser allegedly asks

Marcello if Marcello has any ‘‘juice’’ with the New Orleans

City Council that might assist Hauser in winning an

insurance contract for the city’s public employees. Ac-

A-45

cording to the government's affidavit, Marcello replied:

“Yes, I've got 'em all where I want ‘em.’ Defendants con-

tend that Marcello’s actual response was: ‘‘Yeah, I got

them all what I want.’’ I have listened to the tape recording

of this particular conversation more than 12 times, and I

conclude that it is possible to hear the statement either

way and I am not now positive which is correct. In con-

sidering the remark in the context of the entire conversa-

tion and the series of conversations represented by the

tapes that were admitted into evidence, however, I believe

that the interpretation placed upon the conversation by the

affiant is an accurate one. The inference arising from the

conversation that Marcello exercises influence over the

decisions of the council is a reasonable one based on a

review of the entire conversation tuat supports the finding

of probable cause. Similarly, the defendants challenge the

use in paragraph 24 of the affidavit of the phrase ‘‘inside

information” to describe information Marcello allegedly

would provide to Hauser concerning bidding for insurance

contracts for Jefferson Parish public employees. The defen-

dants argue that the government affidavit has in fact plac-

ed placed a sinister hue on what in reality was an offer to

obtain perfectly legitimate information, such as bid

specifications for the parish insurance business. While it is

true that the phrase ‘‘inside information’ does not appear

on the recording of the conversation upon which this

paragraph of the affidavit is based, it is clear to me from

my review of the «xchange in the context of the entire con-

versation that the affiant’s characterization of the conver-

sation was a reasonable and accurate one.

Perhaps the most serious misrepresentations raised

by the defendants concern paragraphs 23 and 28 of the af-

fidavit. In paragraph 23, the affidavit states that while

discussing the Jefferson Parish insurance contracts during

A-46

an April 2, 1979 conversation, Hauser said that once the

contract was obtained, ‘ ‘we'll pay who we have to pay’ and

Marcello verbally agreed.’’ I agree with defendants that

the phrase ‘‘we'll pay who we have to pay’ does not appear

on the tape. In fact, Walker admitted as much when he

testified during the hearing. I conclude, however, that the

placement of quotes around the disputed phrase was not

done in reckless disregard of the truth since a review of the

entire conversation indicates that paragraph 23 is an ac-

curate conveyance of the meaning of what was said in that

conversation. The actual exchange on which this paragraph

was based appears to have been Hauser saying that

‘whatever we have to take care of we'll take vare of’’ and

Marcello responding ‘‘That’s all.’ It is important, I

believe, not to view these brief verbal exchanges in a

vacuum; instead, they can only properly be understood and

interpreted when heard in the context of the relevant con-

versation as a whole. While the actual words presented to

the magistrate in the affidavit were inaccurate, the

magistrate was not misled because the paragraph accurate-

ly reflected what the conversation, viewed as a whole, was

all about. In paragraph 28, the affidavit describes an April

7, 1979 conversation between Hauser and Davidson. While

the affidavit characterizes this paragraph as the summary

of a taped conversation reviewed and analyzed by the af-

fiant, it is actually a summary of a telephone call monitored

on an extension phone in Hauser’s home by another FBI

agent. See defendants’ exhibit 35. Apparently, no recor-

ding of this conversation exists, although the magistrate

apparently was led to believe that this paragraph was bas-

ed on a recording. I find, however, that even if this

paragraph is stricken from the affidavit, a sufficient basis

for a finding of probable cause still exists in the remaining

content of the affidavit.

A-47

I have reviewed each of the defendants’ allegations

of misrepresentations or omissions raised in their pre-trial

motion papers, in their questioning and oral argument at

the evidentiary hearing, and in the supplemental memoran-

dum filed by defendant, Roemer after the hearing. I have

measured these allegations against what I have read in the

affidavits and heard on the tapes, and I have weighed them

against the applicable legal standards provided by the

Supreme Court and the Fifth Circuit. I conclude that the

defendants have failed to establish intentional or reckless

misrepresentations or omissions in the affidavits which,

when set to one side of the affidavits, render them insuffi-

cient to establish probable cause. Most of the alleged

misrepresentations or omissions raised by the defendants

are in fact accurate reflections or interpretations of the

tape-recorded conversations when those statements or

remarks are heard and understood in their proper context

within the series of conversations relevant to these mo-

tions. Those few allegations that raise actual misrepresen-

tations or omissions are either unintentional, not recklessly

made, or have no effect on the sufficiency of the affidavit

to support a finding of probable cause when deleted from

the affidavit. Defendants’ subfacial challenge to the suffi-

ciency of the affidavits has therefore failed, and the mo-

tions to suppress on those grounds are denied.

B) Staleness

An additional argument raised by the defendants in

connection with the sufficiency of the findings of probable

cause to wiretap is that the background information pro-

vided by Hauser in the first part of the affidavit should be

stricken from the affidavit on grounds of staleness. Defen-

dants contend that because the background information

concerns events occurring from late 1975 to September

A-48

1976, it is stale information which cannot be used to sup-

port a finding of probable cause in the 1979 applications for

wiretap orders. I disagree with the defendants’ argument.

The staleness standard does not establish an ar-

bitrary time limitation in which information must be

presented to a magistrate. Instead, it is clear that in some

circumstances ‘information which demonstrates a chain of

related events covering a broad span of time continuing to

the current period may furnish a most reliable indicia of

present activity.....° United States v. Weinrich, supra, 586

F.2d at 491. Staleness is an issue which must be decided on

the peculiar facts of each case, but the rule allows ‘“‘fairly

long periods of time to elapse between information and

search warrant in cases where the evidence clearly shows a

longstanding, ongoing pattern of criminal activity."’

United States v. Hyde, supra, 574 F.2d at 865.

In this case, the facts set out in the affidavit describe

similar kinds of criminal activity occurring in 1976 and

again in 1979 among persons who appear to have had a

longstanding and ongoing relationship. Moreover, the

older information set out in the background portion of the

affidavit is corroborated in many respects by the informa-

tion obtained from the consensual tape recordings made in

1979. Under these circumstances, it was not unreasonable

for the judges who issued the intercept orders to conclude

that the relationships and activity described in the af-

fidavits was ongoing and continuing, and I will not disturb

their findings of probable cause to issue intercept orders on

grounds of staleness.

C) The Statutory Requirements

At various points in their motions, defendants have

A-49

sought to suppress the tape recordings made pursuant to

court orders on grounds that the government failed to com-

ply with some of the statutory requisites established by Ti-

tle III of the Omnibus Crime Control and Safe Streets Act

of 1968, 18 U.S.C. § 2510 et seg. Included among defen-

dants’ arguments are that (1) the orders are insufficient on

their face; (2) the government failed to ‘‘minimize the in-

terception of communications not otherwise subject to in-

terception”’ pursuant to 18 U.S.C. § 2518/5); (3) the orders

failed to particularly describe the communications sought

to be intercepted pursuant to 28 U.S.C. § 2518/4); (4) the

government provided an insufficient justification for the

need for electronic surveillance and failed to try other in-

vestigatory techniques before resorting to wiretapping as

required by 18 U.S.C. § 2518(1)(c); (5) the government failed

to comply with the sealing requirements of 18 U.S.C. §

2518(8)(a); and (6) unauthorized disclosures were made to

the grand jury in violation of 18 U.S.C. § 2517(5).

I have been provided with no evidence to support any

of the defendants’ allegations, and my own examination of

the orders and the relevant parts of the record in this case

convinces me that all requirements of 18 U.S.C. § 2510 et

seg. have been complied with by the government. Defen-

dants’ motions to suppress on these grounds are therefore

denied.

D) Miscellaneous Arguments

Defendants have also raised several miscellaneous

arguments in support of their contentions that the tapes

made pursuant to court-ordered wiretaps are inadmissible.

These arguments include (1) the statute authorizing the

wire interceptions, 18 U.S.C. § 2510 et. seg., is unconstitu-

tional; (2) the application failed to include a statement of

A-50

facts relating to previous interceptions of the defendants’

communications; (3) unauthorized interceptions of defen-

dants’ conversations were made; and (4) the intercept

orders are “‘irretrievably tainted’’ under the doctrine of

Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9

L.Ed.2d 441 (1963). I conclude that all of these arguments

are without merit, and that the motions to suppress the

court-ordered wiretaps on these and any other grounds

asserted by the defendants are denied without need for fur-

ther discussion.

VI. Motion to Disclose Identity of Informer

Near the end of August, 1980, a sealed envelope was

delivered to the office of the attorney-in-charge of the

Justice Department’s New Orleans Organized Crime Strike

Force.’ The only identification contained on the envelope

was a telephone number scrawled on the outside. The

attorney-in-charge opened the envelope and found a spiral

looseleaf notebook containing telephone call logs and ap-

pointment notations. The notebook apparently belonged to

defendant Marcello. The attorney turned over the notebook

and the telephone number to an FBI agent who after call-

ing the telephone number on the envelope arranged to meet

with the person who answered. They met on five occasions

in August and early September 1980 and the agent receiv-

ed eleven additional notebooks, all containing information

similar to that in the first notebook and all apparently

' The factual narrative that comprises the first three paragraphs

of this section of my minute entry is based on the testimony of the

witnesses who testified at the evidentiary hearing conducted on this mo-

tion. The witnesses were Russell Schonekas, counsel for defendant

Marcello; Eades Hogue, attorney-in-charge of the Justice Department's

New Orleans Organized Crime Strike Force; John Volz, United States

Attorney for the Eastern District of Louisiana; and Special Agent

Harold Hughes of the New Orleans office of the FBI.

A-51

belonging to defendant Marcello. The notebooks contained

information about appointments and telephone calls dating

from 1970 to 1977, and the government officials reviewed

the notebooks and determined that they were irrelevant to

the BRILAB prosecution and would not be used at trial.

On October 2, 1980, counsel for defendant Marcello

was summoned to the Office of the United States Attorney

for this District. When he arrived, he was given the twelve

notebooks. Government representatives declined to iden-

tify the source of their information since the informer had

requested anonymity because of fear of reprisals.

The notebooks were personal property of Marcello

which had been stolen in an August 30, 1977 burglary of

his business office and reported to the Jefferson Parish

Sheriff's Office. The FBI was aware that Marcello had

reported a burglary, and when the informer provided the

FBI with the twelve notebooks, he was questioned about

his knowledge of the burglary. According to the FBI agent

who met with the informer, the informer denied that he had

committed the burglary and denied that he knew the identi-

ty of the burglar.

Defendant Marcello has brought this motion to re-

quire the FBI or the government attorneys (1) to disclose

the name and address of the informer who provided the

government with the notebooks allegedly taken in the

burglary, and (2) to state (a) whether they know the identi-

ty of the burglar, (b) whether the government participated

in or was responsible in any way for the burglary, and (c)

whether they have reviewed or examined the notebooks

and plan to use them at the trial of this case. Counsel for

the defendant agreed at oral argument on this motion that

the government had satisfied the second part of this

A-52

motion. Each of the government officials who testified at

the evidentiary hearing on this motion denied that the

government perpetrated the burglary or was in any way in-

volved, and also denied that any government official knows

the identity of the burglar. some of the government of-

ficials admitted they had examined the notebooks, but the

Strike Fo°>» attorney-in-charge testified that they were ir-

relevant . she BRILAB case and would not be used at

trial. Thus, the only portion of defendant’s motion that re-

mains to be decided is defendant’s request for disclosure of

the identity of the informer who provided the government

with the notebooks. Defendant’s legal theory in support of

his motion is rather vague; his very brief memo in support

of the rnotion states simply that he “‘relies upon the 5th

and 14th Amendments to the U.S. Constitution and Rule

47 of the Federal Rules of Criminal Procedure.’’ Counsel's

oral argument following the evidentiary hearing seemed to

touch on notions of fundamental fairness inherent in the

Fifth Amendment. Defendant cites no case law in support

of his motion.

Although the govefnment is required to disclose the

identity of confidential informers under some cir-

cumstances, there is no general requirement that an in-

former's identity be disclosed in all cases. See Rugendorf v.

United States, 376 U.S. 528, 84 S.Ct. 825, 11 L.Ed.2d 887

(1964); Roviaro v. United States, 353 U.S. 53, 77 S.Ct. 623,

1 L.Ed.2d 639 (1957). In Roviaro, the Supreme Court pro-

vided the following general guidance on the ‘‘informer’s

privilege:”’

What is usually referred to as the informer’s

privilege is in reality the Government's privilege

to withhold from disclosure the identity of per-

sons who furnish information of violations of law

A-53

to officers charged with enforcement of that law.

The purpose of the privilege is the furtherance

and protection of the public interest in effective

law enforcement. The privilege recognizes the

obligation of citizens to communicate their

knowledge of the commission of crimes to law-

enforcement officials and, by preserving their

anonymity, encourages them to perform that

obligation.

The scope of the privilege is limited by its

underlying purpose....

A further limitation on the applicability of the

privilege arises from the fundamental re-

quirements of fairness. Where the disclosure of an

informer’s identity, or of the contents of his com-

munication, is relevant and helpful to the defense

of an accused, or is essential to a fair determina-

tion of a cause, the privilege must give way. In

these situations the trial court may require

disclosure...

We believe that no fixed rule with respect to

disclosure is justifiable. The problem is one that

calls for balancing the public interest in protec-

ting the flow of information against the in-

dividual's right to prepare his defense. Whether a

proper balance renders nondisclosure erroneous

must depend on the particular circumstances of

each case, taking into consideration the crime

charged, the possible defenses, the possible

significance of the informer’s testimony, and

other relevant factors.

353 U.S. at 59-62, 77 S.Ct. 627-29 (citations omitted) {em-

phasis added]. In general, therefore, disclosure of an in-

former's identity will be ordered when the informer's iden-

tity is relevant, helpful to the defense, or essential to a fair

A-54

determination of the case.

In this case, disclosure of the informer's identity will

serve none of these purposes. Defendant has failed to

demonstrate the relevance of this informer’s identity to

this case and his defense, and I discern none. The identity

of the informer, who provided information which itself is ir-

relevant to this case, is in no way essential to determina-

tion of this proceeding, nor would it be helpful to the

defense of these charges. The informer apparently fears

revelation of his or her identity and obviously would not

have come forward except under the cloak of anonymity ex-

plained in Roviaro. Under these circumstances, the balance

of interests weighs in favor of continued confidentiality,

and I therefore deny defendant's motion for disclosure.

ORDER

SEAR, District Judge.

IT ISORDERED that defendants’ motions to adopt

the substantive motions and motions to suppress of their

co-defendants are GRANTED.

IT IS FURTHER ORDERED that the defendants’

motions to dismiss the indictment in the captioned pro-

ceeding on grounds of governmental misconduct and over-

reaching, artificially created jurisdiction, and selective pro-

secution are DEFERRED until trial. Defendants’ motion

to dismiss the indictment on grounds of prejudicial publici-

ty is DENIED, but defendants’ alternative motion for

sanctions is DEFERRED.

IT IS FURTHER ORDERED that all other substan-

tive motions urged by defendants in arguments conducted

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October 6 and 7, 1980, including the motions to sever, to

dismiss, and to strike portions of the indictment, are

DENIED.

IT IS FURTHER ORDERED that the defendants’

motions to suppress the consensually recorded tapes of

defendants’ conversations and the tape recordings made

pursuant to court orders, which motions were urged and

argued December 8 through 12, 1980, are DENIED. The

motion of defendant Marcello for disclosure of the identity

of a government informer is also DENIED.

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APPENDIX “C”’

UNITED STATES of America

v.

Carlos MARCELLO et al.

Crim. A. No, 80-274.

United States District Court,

E.D. Louisiana.

April 20, 1982. .

Defendants moved for judgment of acquittal or, in

the alternative, for new trial following their convictions of

conspiracy in violation of the Racketeer Influenced and

Corrupt Organizations Act. The District Court, Sear, J.,

held that: (1) the Government's involvement in the sting

operation was not so unusually pervasive as to violate due

process principles and did not result in the artificial crea-

tion of federal jurisdiction; (2) there was sufficient evidence

that defendants agreed to commit one or more additional

predicate offenses to sustain their convictions; (3) although

the offenses which served as additional predicate offenses

were related to the initial predicate offense they were

separate offenses for purpose of establishing a pattern of

racketeering activities; and (4) the Government amply pro-

ved an agreement to participate in an enterprise separate

and apart from the mere agreement to commit acts of

racketeering activity.

Motions denied.

John Volz, U.S. Atty., L. Eades Hogue, U. S. Justice

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Dept., Albert Winters, Richard T. Simmons, Asst. U. S.

Attys., John Voorhees, U. S. Justice Dept., New Orleans,

La., for Government.

Arthus A. Lemann, III, Provino Mosca, Russell

Schonekas, New Orleans, La., Henry Gonzalez, Tampa,

Fla., for defendant Carlos Marcello.

John R. Martzell, John Wilson Reed, Michael Fawer,

Mathew Greenbaum, New Orleans, La., for defendant

Charles E. Roemer, II.

SEAR, District Judge.

Introduction

Following their convictions in this federal criminal

prosecution, defendants Carlos Marcello and Charles E.

Roemer, II, moved for judgments of acquittal or, in the

alternative, for a new trial on a number of grounds. After

considering the extensive memoranda submitted by coun-

sel and the oral argument presented at the hearing of

December 14, 1981, in light of the substantial record of the

case and the voluminous evidence adduced at trial, I denied

the defendants’ motions, ruling orally from the bench. At

the same time, I also denied four motions which had been

argued by the defendants prior to trial, but whose deter-

mination had been deferred until trial. See United States v.

Marcello, 508 F.Supp. 586, 590-98 (E.D.La.1981).

Background of the Case

In the summer of 1980, Marcello and Roemer were

charged with three co-defendants in a lengthy twelve-count

indictment resulting from a year-long Justice Department

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undercover ‘‘sting’’ operation commonly known as Brilab.!

The Brilab investigation was nationwide and broad in

scope, centering upon suspected illegal activities involving

public officials, labor unions and reputed organized crime

figures. The investigation was carried out by agents of the

Federal Bureau of Investigation working with a convicted

felon and career con man named Joseph Hauser. Hauser

had recently pleaded guilty to federal criminal charges aris-

ing from a scheme to swindle health, welfare and pension

funds from labor unions, United States v. Hauser, No.

CR-78-313 (D.Ariz. Feb. 5, 1979). He willingly agreed to

cooperate with federal officials when approached at about

the time of his quilty plea by FBI agents who proposed

that he participate in the undercover operation.“ Hauser’s

agreement to cooperate in the investigation was not entire-

ly motivated by the spirit of penitence or by a sense of civic

obligation. In exchange for his participation in the Brilab

investigation, Hauser received the assistance of Justice

Department attorneys who appeared on his behalf in his

Arizona sentencing, substantial compensation payments in

addition to reimbursement for expenses and other fringe

benefits during -his-participation in the Brilab investiga-

tion, and a place in the federal witness protection program

when his term of imprisonment resulting from his criminal

conviction ended.

The Louisiana arm of the Brilab operation in which

: The term “Brilab” is an acronym which stands for ‘‘bribery-

labor.’ Ironically, the Louisiana component of the Brilab investigation

in no way implicated labor unions or their officials in any alleged or ac-

tual wrongdoing uncovered by the investigation.

2 Hauser testified at trial that he was initially approached about

cooperating in the investigation by FBI agents William Wiechert and

William Fleming. See Trial Testimony of Joseph Hauser under Direct

Examination by the Government, June 15, 1981, Trial Transcript at

4208-12.

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Hauser became involved lasted about one year, from

February 1979 to February 1980, a period during which the

1979 gubernatorial campaign and election were conducted.

As part of the undercover investigation, Hauser and two

FBI agents, Michael Wachs and Larry Montague, posed as

representatives of a fictitious Beverly Hills, California firm

called Fidelity Financial Consultants. Wachs, who assum-

ed the alias Michael Sachs, and Montague, who took the

name Larry Golden, working together with Hauser, set up

their dummy business on the West Coast. Personalized

business cards and stationery showing that they

represented Prudential Insurance Company of America,

one of the largest insurance firms in the world, were printed

by the FBI.2 Posing as insurance representatives with a

connection to Prudential, Hauser and the two agents con-

tacted individuals with whom Hauser said he had dealt in

the past, including Carios Marcello, in an effort ta. gain a

foothold for obtaining insurance contracts with state and

local governmental agencies and private businesses in

Louisiana. The agents’ activities included face-to-face

meetings with Marcello, several candidates for public of-

fice, and Roemer, who wa then Commissioner of Ad-

ministration of the state of Louisiana and chief of the

gubernatorial campaign of then-State Senator Edgar G.

* Government exhibit No. 309. John Stoddart. senior vice presi-

dent and general counsel of Prudential. testified that although Pruden-

tial had agreed to cooperate with the government in the Brilab in-

vestigation, the printing of business cards bearing the inscription

‘Fidelity Financial Consultants Representing Prudential Insurance

Company of America” and listing an agent's alias, address and

telephone number was in conflict with assurancces Prudential had

received from the FBI in May 1979 that there would be no ‘advertising’

of a connection between Prudential and Fidelity. See trial testimony of

John Stoddart under direct examination by defendant Marinello, July

23, 1981, Trial Transcript at 9097-9119. Interestingly. the name Pruden-

tial Insurance Company was printed on the business cards in boldface

type at least twice as large as the lightface printing used for the name

Fidelity Financial Consultants.

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‘Sonny’ Mouton of Lafayette. Scores of tape recordings of

conversations concerning the election campaign, insurance,

and the activities of the agents and the defendants were

made with Hauser’s consent? or pursuant to wiretap

orders previously issued by United States district judges.°

More than 130 of the surreptitiously made recordings were

eventually used as evidence at the Brilab trial. The agents

made cash payments of thousands of dollars to several can-

didates or their representatives. Roemer himself received

two payments totalling $25,000, which he contended were

campaign contributions for Mouton. In the indictment that

formed the basis for this criminal prosecution, however, the

payments were characterized as bribes given in return for

Roemer’s promise to use his influence to shift the state

employees insurance contract from its existing carrier to

the agents.

Count One of the superseding indictment® that

resulted from the Brilab investigation charged Marcello,

Roemer, I. Irving Davidson, Vincent Marinello, and

Aubrey Young with a conspiracy in violation of the

Racketeer Influenced and Corrupt Organizations (RICO)

Act, 18 U.S.C. § 1962(d). Specifically, the defendants were

charged with conspiring to associate together in fact as an

enterprise for the purpose of obtaining the state employees

insurance contract through the commission of various

criminal acts, including public bribery in violation of

4 See 18 U.S.C. § 2511(2Nc) and (d); United States v. Marcello, 508

F.Supp. 586, 598-601 (E.D.La.1981)

© See 18 U.S.C. § 2510 et seg.

6 Two indictments were actually returned. Each contained essen-

tially the same charges, but the first. returned on June 17, 1980, Court

Record Document No. 1, named only four defendants while the second,

a superseding indictment returned on August 12, 1980, Court Record

Document No. 56, named a fifth defendant. Aubrey W. Young.

A-61

Louisiana law, La.Rev.Stat.Ann. § 14:118 (West

Supp.1980); interstate travel with intent to conduct

unlawful activity in violation of 18 U.S.C. § 1952; wire

fraud in violation of 18 U.S.C. § 1343; and mail fraud in

violation of 18 U.S.C. § 1341. Count Two charged all five

defendants with a substantive violation of RICO. Counts

Three through Twelve alleged various acts of mail fraud,

wire fraud, and interstate travel in aid of unlawful activity

against some or all of the defendants.

After eighteen weeks of trial, the jury found Marcello

and Roemer guilty of Count One, the RICO conspiracy.

Marcello was acquitted on the eleven other counts against

him, and Roemer was acquitted of the five other charges

against him.’ Their co-defendants were acquitted on all

charges against them.®

Prior to the trial, I had deferred ruling on three mo-

tions brought by the defendants to dismiss the indictment

on grounds of governmental overreaching or misconduct,

selective prosecution, and artificially created federal

jurisdiction,? an issue raised with renewed fervor in

" Roemer was acquitted of Counts Nine and Eleven, both involv-

ing wire fraud charges, when | granted his motion for entry of judgment

of acquittal as to those counts pursuant to Rule 29(a), Fed.R.Crim.Pro.,

on July 7, 1981 at the close of the government's case-in-chief. The jury

acquitted him of Counts Two, Ten and Twelve. The jury acquitted

Marcello on Counts Two through Twelve.

8 Davidson was acquitted of all twelve counts against him by the

jury. Marinello was acquitted of Count eleven on July 7, 1981 when I

granted his motion for entry of judgment of acquittal as to that count

pursuant to Rule 29a), Fed.R.Crim.Pro. The jury acquitted him of

Counts One, Two and Twelve. Young was acquitted of all counts alleged

against him in the indictment when | grante! his motion for entry of

judgment of acquittal pursuant to Rule 29a) on July 7, 1981.

9 In their pre-trial motions, the defendants had also sought

A-62

defendant Roemer’s post-trial motion for judgment of ac-

quittal. The rulings were deferred primarily so that my

determination would be based on a complete evidentiary

record and a complete understanding of the facts of this

complex case without the necessity of conducting exten-

sive and redundant pre-trial hearings that would have

duplicated much of the evidence to be presented at the an-

ticipated lengthy trial. United States v. Marcello, supra,

508 F.Supp. at 594. Although the defendants were provid-

ed an opportunity at the post-trial hearing conducted on

December 14, 1981 to present any further evidence rele-

vant to their pre-trial motions,!9 no additional evidence

was presented at that time and the defendants rested their

motions on the substantial record developed at trial. After

the trial, the convicted defendants filed lengthy post-trial

motions! ! which were scheduled for hearing and argument

on December 14, 1981 along with the deferred motions. In

addition to the previously raised issue of artificially

created federal jurisdiction, the post-trial motions included

the following three general arguments: (1) The evidence

presented during the trial was insufficient to support the

RICO conspiracy conviction because no actual agreement

to commit the requisite second predicate offense was prov-

ed; (2) The jury instructions concerning certain elements

(Footnote 9 continued) a

dismissal of the indictment on grounds that they were prejudiced by

government-initiated leaks to the news media prior to and during the

grand jury investigation that led to their indictment. I denied their mo-

tion to dismiss, but deferred ruling on their alternative motion for sanc-

tions against the government. See United States v. Marcello, 508

F.Supp. 586, 598 (E.D.La.1981). My ruling on the defendants’ alter-

native motion for sanctions is discussed at pages 1378-79.

10 See Court Record Document No. 463, at 4-5.

11 See Court Record Documents No. 448, 548, 549, 557. Counsel

for defendant Marcello also indicated his desire to adopt the arguments

set forth in defendant Roemer's motion and memoranda.

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of the RICO conspiracy conviction were insufficient; and

(3) The government failed to prove either the existence of

an ‘‘enterprise’’ separate from the alleged predicate of-

fenses or a ‘‘pattern of racketeering activity’’ as that term

is defined by the RICO statute.

Governmental Overreaching and Artificially Created

Federal Jurisdiction

The defendants’ allegations of governmental miscon-

duct or overreaching and artificially created federal

jurisdiction share common legal and factual bases and re-

quire substantially similar proof. Both claims touch upon

the conduct of government agents in the instigation, opera-

tion and maintenance of alleged criminal offenses during

the Brilab investigation. Both require examination of the

specific activities of these government agents in an under-

cover operation, which, by its nature, required a degree of

government participation, and both seek to define the

boundary between permissible and impermissible govern-

mental involvement.

In their motions to dismiss on grounds of govern-

mental misconduct and overreaching, the defendants con-

tend that the government’s involvement in the Brilab

scherne was so pervasive and outrageous that due process

principles or the court’s supervisory power over the

criminal justice system require that the indictment against

them, and their resulting convictions based on that indict-

ment, be dismissed. Although the Supreme Court has never

applied the defense of outrageous governmental miscon-

duct in a specific case to dismiss an indictment or vacate

a conviction, it has recognized that a situation may arise

“in which the conduct of law enforcement agents is so

outrageous that due process principles would absolutely

A-64

bar the government from invoking judicial processes to ob-

tain a conviction.’’ United States v. Russell, 411 U.S. 423,

431-32, 93 S.Ct. 1637, 1643, 36 L.Ed.2d 366 (1973). In order

for the defense to be invoked successfully, the egregious

conduct of the law enforcement agents must be violative of

our concepts of fundamental fairness and the universal

sense of justice embodied in the due process clause. Jd. In

a concurring opinion in Hampton v. United States, 425

U.S. 484, 495 n.7, 96 S.Ct. 1646, 1653 n.7, 48 L.Ed.2d 113

(1976), Justice Powell stated that in order for the defense

to be invoked successfully in any given case, ‘‘police overin-

volvement in crime would have to reach a demonstrable

level of outrageousness before it could bar conviction.”’

Several courts of appeals have established that in

some circumstances convictions obtained through

egregious governmental misconduct in the creation and

maintenance of criminal activities must be vacated. See

United States v. Twigg, 588 F.2d 373 (3d Cir. 1978); United

States v. Archer, 486 F.2d 670 (2d Cir. 1973); Greene v.

United States, 454 F.2d 783 (9th Cir. 1971). Other courts,

while recognizing the validity of the defense, have noted

that it is one that ‘‘would rarely, if ever, be available.”’

United States v. Brown, 635 F.2d 1207, 1212 (6th Cir.

1980), quoting United States v. Leja, 563 F.2d 244, 246 n.4

(6th Cir. 1977), cert. denied, 434 U.S. 1074, 98 S.Ct. 1263,

55 L.Ed.2d 780 (1978). The Fifth Circuit has acknowledged

that a defense of governmental misconduct grounded on

concepts of due process and existing separately from the

traditional defense of entrapment is available in some cir-

cumstances, United States v. Meacham, 626 F.2d 503, 512

(5th Cir. 1980); United States v. Graves, 556 F.2d 1319,

1324 (5th Cir. 1977), cert. denied, 435 U.S. 923, 98 S.Ct.

1485, 55 L.Ed.2d 516 (1978), but in no case has the Fifth

Circuit yet reversed a conviction on that specific ground.

A-65

The defendants’ motions to dismiss on grounds of ar-

tificially created federal jurisdiction have two basic com-

ponents, one asserted pre-trial in very general terms, and

the other argued post-trial and addressed to specifics. In

their motions raised prior to trial, the defendants contend-

ed that the overinvolvement of government agents in the

scheme resulted in the creation and maintenance of the in-

terstate commerce elements of the offenses charged in the

indictment. For example, the defendants argued pre-trial

that because the California firm set up by the FBI was a

purely fictitious operation through which insurance con-

tracts could never have been written, there could be no ef-

fect on interstate commerce in reality through the dealings

of the defendants with the agents. In their post-trial mo-

tions, the defendants have refined their argument, concen-

trating on specific evidence adduced at trial which they

contend demonstrates the government's creation of the

federal jurisdictional elements of the mail and wire fraud

offenses that serve as predicate acts to the RICO con-

spiracy of which they were convicted. The defendants

argue that the government agents themselves created and

caused the November 2, 1979 mailing which forms the

basis of the mail fraud predicate offense and that the

government manipulated the cross-country travels of

government informer Joseph Hauser and the undercover

agents in such a way as to create the necessity for in-

terstate telephone calls the defendants caused or made to

Hauser or to the agents in furtherance of the scheme.

While the Fifth Circuit has never vacated a convic-

tion on grounds of artificially created federal jurisdiction,

it has recognized the legitimacy of the defense. United

States v. Perrin, 580 F.2d 730, 737 (5th Cir. 1978), aff'd, 444

U.S. 37, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979). The defen-

dants, however, have relied principally on the decision of

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the Second Circuit in United States v. Archer, supra. 12 In

Archer, federal and local law enforcement officers created

an undercover operation to investigate suspected corrup-

tion and public bribery in the New York City criminal

justice system. Two convictions under the Federal Travel

Act, 18 U.S.C. § 1952, resulted, but the Second Circuit

vacated those convictions finding ‘‘manufactured federal

jurisdiction” in a situation in which ‘‘the federal officers

themselves supplied the interstate element and acted to en-

sure that an interstate element would be present.’’ United

States v. Archer, supra, 486 F.2d at 682.

Federal jurisdiction in the Archer case was based

primarily on three interstate or foreign telephone calls

allegedly made or received by the defendants in fur-

therance of the bribery scheme. The first call involved a

defendant in New York who returned a telephone call made

by a government agent in New Jersey. The court discarded

this call as a legitimate basis for finding federal jurisdiction

because the agent admitted he had gone to New Jersey for

the sole purpose of getting the defendant to talk in an in-

terstate phone conversation. Jd. at 674, 681-82. The second

call involved attempts by a defendant in New York to reach

a government agent at a Las Vegas, Nevada hotel. The

court rejected these unsuccessful attempts to reach the

agent in Las Vegas because the calls ‘resulted from a plant

of misinformation’ which provoked calls that the defend-

12 The defendants have also placed some reliance on the opinion

of the district court in United States v. Jannotti, 501 F.Supp. 1182

(E.D.Pa.1980), see Court Record Document No. 548 at 44-45, in which

the district judge vacated two convictions obtained as a result of the

Abscam investigation, another Justice Department ‘‘sting operation

conducted at about the same time as the Brilab investigation. The

ddistrict court's decision has now been reversed, however, by the United

States Court of Appeals for the Third Circuit, 673 F.2d 578 (3d Cir.

1982).

A-67

ant would not otherwise have made and because the agent

knew that any attempt by defendant to reach him at the

hotel would be fruitless because the agent would not be at

the hotel and ‘‘there was not and, under the circumstances,

could not have been any actual use of a facility in interstate

commerce which would in fact promote, etc., any unlawful

activity. Jd. at 682. The third call was from a government

agent, who was in Paris, France on a legitimate, though

unrelated. investigation, to a defendant in New York.

Although the government agent had not been sent abroad

for the sole purpose of making a foreign call that would

serve to create federal criminal jurisdiction, the court re-

jected it because the call was a casual and incidental occur-

rence which served no real purpose in furtherance of the

scheme and had in no way been initiated by the defendant.

Id. at 682-83. On rehearing, the Archer court adhered to its

decision reversing the convictions and dismissing the in-

dictment. but limited somewhat the broad language it had

used in rendering its initial opinion by noting that it had

gone ‘‘no further than to hold that when the federal ele-

ment in a prosecution under the Travel Act is furnished

solely by undercover agents, a stricter standard is ap-

plicable than when the interstate or foreign activities are

those of the defendants themselves....'’ (emphasis added).

Id. at 685-86.

The use of paid informants and undercover opera-

tives. like those employed in Brilab, is, of course, a

legitimate and permissible law enforcement technique and

means of investigation. See United States v. Russell, supra,

411 U.S. at 432, 93 S.Ct. at 1643. Only when the specific

acts of such government agents)? reach ‘‘a demonstrable

.

+3 The activities of hauser. a paid government informer, are con-

sidered those of a ‘government agent” for purposes of the defenses of

governmental overreaching or outrageous misconduct and artificially

A-68

level of outrageousness,’ Hampton v. United States,

supra, 425 U.S. at 495 n.7, 96 S.Ct. at 1653 n.7, or result

in manufactured jurisdiction should convictions obtained

as a result of such investigative techniqtes be vacated. The

government's involvement in the Brilab scheme was

undeniably extensive. When that involvement is viewed as

a whole, however, I find that it was not so unusually per-

vasive as to violate those notions of justice and fair play

embodied in our concept of due process and necessary for

the proper administration of our criminal justice system.

Moreover, federal jurisdiction was not created solely and

impermissibly by the activities of government agents in

the manner prohibited by the Archer case.

Even those isolated government actions during

Brilab that, in my view, come closest to being included in

the category of activities prohibited by the cases discussed

above were insufficient to require setting aside these con-

victions. For example, on at least two occasions, Hauser’s

voice could be heard during tape-recorded conversations in

which, the defendants contend, Hauser was attempting to

implicate others in criminal activity even though the

general conversations themselves were innocent.!4 On

June 28, 1979, Hauser stepped into a restroom alone dur-

ing a meeting with Marcello and Davidson at Marcello’s

Metairie, Louisiana office. The meeting occurred very early

in the Brilab investigation before the details of the RICO

(Footnote 13 continued)

created federal jurisdiction. See United States v. Brown, 635 F.2d 1207

(6th Cir. 1980); see also Sherman v. United States, 356 U.S. 369, 78 S.Ct.

819, 2 L.Ed.2d 848 (1958) (activities of government informer considered

those of government agent for entrapment purposes).

14 Hauser’s extemporaneous remarks on these occasions and

others were referred to as the ‘‘Hauser soliloquies’’ by counsel during

the trial.

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conspiracy of which Marcello and Roemer were convicted

had begun to emerge. While still alone, Hauser said:

Carlos, I’m listening. And I’m reading the

papers. I understand what you're saying. Okay.

I’m gonna read what you're showing me. So in a

sense what you're saying is that you're taking

over the whole family. Oh, then we can write

business throughout the country. I'm. I'm

reading. Okay, I'll read it. Lemme finish reading

this. You mean to tell me something like this they

distribute in the mail? Oh, I see. By messenger.

(long pause) (time reduced) I never realized

numbers were such a big game.!®

On November 11, 1979 during a meeting between

Hauser and gubernatorial candidate Louis Lambert, who

was then a member of the Louisiana Public Service Com-

mission, Lambert had clearly left Hauser alone while

Lambert left the room to gather some testimonial tickets

he planned to sell in exchange for $10,000 in cash that

Hauser was prepared to deliver to him. While they were

together in the room, the conversation proceeded in pari as

follows:

Lambert: What do you want to contribute to

my campaign?

Hauser: I want to give vou ten thousand dollars

cash right now.

Lambert: And I'm gonna give you, let me tell

you what I’m doing so you can just (unintel-

*? Government exhibit 23-T, government transcript at 26; tape

played in court during testimony of William Fleming under cross-

examination by defendant Marinello. May 12, 1981. and during

testimony of Joseph Hauser under cross-examination by defendant

Roemer. June 19, 1981.

A-70

ligible) .... Wait, right...til I go get some tickets.

Hauser: Oh, leave me alone, give them to L. G.

Moore, leave me alone.

Lambert: You take the goddamn tickets and

then we've done it the right way.

Hauser: Okay.

Lambert: That scares you, but you just have to

learn we've go a new policy.

At this point in the conversation, the sound of footsteps—

Lambert's footsteps leaving the room—and the sound of a

door opening and closing are clearly audible on the tape

recording. Hauser, now momentarily alone in the room,

takes the opportunity to inject a word that had not

previously been used in the discussion:

Hauser: I want it understood one thing. That's

part of the business. I, I call it_a kickback, you

can call it anything you want.?‘

At that point, the sound of a door opening and closing and

the sound of footsteps—Lambert’s footsteps re-entering

the room—are clearly audible on the tape, and Hauser, his

solo remarks interrupted in mid-sentence by Lambert's

return, concludes:

You want to call it this..you just get

1© Defense exhibit, denominated “defense tape” in government

exhibit transcript book, at 60; tape played in court during testimony of

Joseph Hauser under cross-examination by defendant Roemer, June 19.

1981.

17 Ig (emphasis added).

is

this...okay.!

Although Hauser denied on the stand that he was fabri-

cating evidence or that Lambert was out of his presence

when he made these statements. !9 it is obvious from listen-

ing to the tapes that Hauser was in fact alone.

While Hauser’s conduct in these two instances was

disreputable and cannot be condoned, it clearly bore no

relationship to the offense for which the defendants

Marcello and Roemer were convicted. The strength of the

connection, or causal relationship, between the challenged

government conduct and the commission of the acts for

which the defendants stand convicted is a consideration

which several courts have deemed important in evaluating

a defense of egregious governmental misconduct. United

States v. Brown. supra, 635 F.2d 1207, 1213; United States

v. Spivey, 508 F.2d 146, 149-150 (10th Cir.), cert. denied,

421 U.S. 949, 95 S.Ct. 1682. 44 L.Ed.2d 104 (1975); United

States v. Szycher, 585 F.2d 443, 447-49 (10th Cir. 1978).

Moreover, Hauser’s soliloquies are not symptomatic of a

broader pattern of governmental misconduct in the Briiab

investigation. Instead, they were isolated events of the

general type against which Hauser had been warned by

federal law enforcement officers working with him in the

investigation.-0

The defendants also contended that the govern-

ment’s overinvolvement in the Brilab scheme is illustrated

| ae ie

+? Trial testimony of Joseph Hauser under cross-examination by

defendant Roemer. June 19, 1981. Trial Transcript at 4769-77.

20 See trial testimony of William Fleming under direct examina:

tion by the government. May 7. 1981. Trial Transcript at 31-32.

A:72

by the allegedly substantial role played by Justice Depart-

ment officials and investigating agents in planning both

the general contours and the specific details of Brilab.

Hauser and FBI agents Wachs and Fleming were all ques:

tioned about whether they attended meetings with, or

received instructions from, Justice Department officials

about how, why, and against whom the Brilab investiga-

tion should be conducted. Yet, I find no convincing

evidence to support defendants’ contentions concerning

the existence of a government masterplan that comprises

outrageous overreaching or misconduct in this case. In

questioning Fleming. for example, counsel for defendant

Roemer made reference to an internal FBI memorandum

dated March 22, 1979 originating from the Los Angeles

field office of the FBI and addressed to the FBI director.*!

The memorandum requested permission to institute 4

widespread undercover operation, Brilab, ‘to criminally in-

volve” labor officials whom Hauser alleged had been in-

volved in bribery in the past. No extensive questioning

regarding the memorandum took place and it was not of-

fered in evidence. Although the memorandum used the

facially suspicious phrase ‘to criminally involve,’ Fleming

and the other government agents who testified denied that

instigation of criminal activities was the motivation behind

the Brilab investigation or that they had received detailed

instructions from Washington on how to proceed, and I

find that their actions during the more than year-long in-

vestigation support this view. Moreover, examination of

the memorandum as a whole?? read in context indicates

*! Trial testimony of William Fleming under cross-examination

by defendant Roemer, May 11, 1981, Trial Transcript at 433-40.

22 The memorandum was part of a voluminous collection of

documents produced by the government for my in camera inspection

pursuant to a broad request by the defendants for access to exculpatory

material which they might be entitled to receive pursuant to Brady +

A-73

that the investigation at that early stage merely con-

templated having Hauser recontact individuals with whom

he said he had illicit dealings in the past so that the FBI

could legitimately investigate those dealings through the

medium of Hauser’s renewal of past relationships. The fact

that the agents eventually became in volved in an in-

vestigation of corrupt practices in the obtaining of state in-

surance contracts relating to the Louisiana gubernatorial

campaign and the Office of the Commissioner of Ad-

ministration, a direction and development clearly unan-

ticipated when the Brilab investigation was germinating in

early 1979, further illustrates that it was the defendants

themselves, and not the government, who were the ar-

chitects of the specifics of the offense for which they were

eventually convicted.

The events surrounding the mailing of November 2,

1979 and the various interstate telephone calls made or

caused by the defendants in furtherance of the scheme, par-

ticularly the call from Marcello to Hauser of September 21,

1979, are relevant to the issues of both outrageous govern-

mental misconduct and artificially created federal

jurisdiction.

On September 21, 1979, Marcello made a long dis-

tance telephone call from Metairie, Louisiana, to Hauser at

a motel in Albuquerque. New Mexico. Earlier that day,

Marcello and Roemer had met at the St. Ann Hotel in New

(Footnote 22 continued)

Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), and its pro-

geny. After examining the memorandum, I ordered it produced to the

defendants solely because of the use of the phrase ‘‘to criminally in-

volve’ and because of the possibility that the phrase might somehow

prove exculpatory in light of some additional evidence the defendants

might produce. No such evidence was in fact produced at trial or during

the other hearings conducted in this matter.

A-74

Orleans where, according to Roemer's testimony,22

Roemer agreed to meet with Hauser and the agents. The

sole purpose of the call was for Marcello to arrange that

meeting:

Marcello: Okay, I just come from seein’ that

man (Roemer).

Hauser: Uh huh.

Marcello: Now he said them boys (the agents)

are supposed to take out some deals. ya know?

Come up with somethin’.

Hauser: Uh huh.

Marcello: Uh, that he could see what he can do,

va know?

Hauser: Uh huh.

* = x = = =

Marcello: Yeah, but he got to show, you got to

show uh wat reason and all, I mean uh the boys

gotta come on down. They got his number haven't

they?

Hauser: Who?

Marcello: Your boys.

Hauser: Yeah, what va mean his number. yeah.

Marcello: His telephone number.

Hauser: Yeah.

“3 Trial testimony of Charles Roemer under direct ex-

amination, July 21, 1981. Trial Transcript at 8615-18.

A-75

Marcello: So I can tell ya where, where we go,

you're gonna meet.

Hauser: Okay.

Marcello: Ya understand? Ya gotta meet Mon-

day in Shreveport.

Hauser: We gotta meet him Monday in

Shreveport?

Marcello: Yeah.

* * * * « +

Marcello: You come in Sunday. We'll talk Sun-

day night uh Monday morning.

Hauser: Okay.

Marcello: I'm gonna make ya reservations for

Sunday for Monday evenin’. They get, go to

Shreveport and I'll have your reservation there

and all.24

Unlike the Archer situation, there is no evidence that

the government arranged to have Hauser in New Mexico or

prodded Marcello into making this call only as a means of

providing federal jurisdiction. Brilab was a broad-based in-

vestigation in which Hauser traveled nationwide contac-

ting individuals, including Marcello, with whom he had

prior dealings. Both defendants knew at the time Roemer

agreed to meet with Hauser and the agents and Marcello

acted to schedule that meeting that Hauser’s consulting

operation was headquartered in California and that he

would be traveling west at about the time any meeting

“4 Government exhibit 71-T, government transcript at 1-3 (em-

phasis added)

A-76

would have to be arranged. Moreover, the call was an im-

portant one in furtherance of the scheme, not merely

casually or incidentally related to obtaining the insurance

contract, because it set up an important meeting between

Roemer and the agents at which proposas for obtaining

the contracts were to be discussed.

Similarly, the November 2, 1979 mailing of a written

proposal concerning the insurance contract from the

agents to Roemer was an event encouraged, and to some

extent expected and approved, by the defendants.

Throughout the course of their dealings with the agents,

Marcello and Roemer had requested a written proposal

from Hauser and the agents for Roemer’s use in transferr-

ing the state insurance contract from its existing carrier to

the agents. On November 1, 1979, Hauser and the agents

brought a draft of the proposal to Marcello’s office in

Metairie. Because the proposal contained a typographical

error, however, Hauser asked Marcello if Marcello’s

secretary would retype the letter for him. Apparently

satisfied because Hauser had finally produced the written

proposal he and Roenier had so often requested,?> Marcello

was pleased to oblige:

Hauser: Carlos, you know what I need?

Marcello: What?

Hauser: Can Loretta do me a big favor? I need

a letter retyped.

Marcello: The girl's gone (unintelligible).

Hauser: Oh, she’s gone already?

*° See, e.g., portions of transcripts of tape-recorded conversations

quoted in text at notes 31-35 infra.

A-77

Marcello: Michael, was it a big, ah—

Hauser: Can she do it tomorrow?

Wachs: Yeah.

Marcello: You want it in the morning or you

need it now?

Hauser: No, I don’t need it now. (unintelligible)

Marcello: What you want (unintelligible).

- «= * = = =

Hauser: This is a letter with proposals that

we're sending to Roemer, and the word more was

spelled with two r’s and I didn't want to send it

out this way, it looks like shit. You understand

what I’m saying?

Marcello: Yeah, where's it at?

Hauser: Right there, nothing more, it’s got two

r's in it.

* a“ * * = =

Marcelle. You don’t need it ‘til tomorrow?

Hauser: Oh, tomorrow's fine. I'll. I'll leave it

with you. I'm leaving it with you anyway, man.

Marcello: Good.2©

On the following day, again at Marcello's Metairie office,

Hauser instructed Janice Decker, Marcello’s secretary, on

“© Government exhibit 106-T. government transcript at 2-3

A-78

how the letter should be retyped.?/ The proposal? was

mailed after it had been retyped and Marcello had reviewed

it approvingly:

The

Hauser: Carlos, just look at this. (Chair

squeak), This is the letter, read, uh, the important

part is the last—the second page.

Marcello: This your brief—you're sending this

to Roemer.

Hauser: Yes.

Marcello: On the second page? (Pause— Paper

Shuffle) Save ‘em a million dollars, man. That's

beautiful.

Hauser: Black and white. I’m quotin’ them the

number.

Marcello: Ya see that’s what, that’s what I'm

sayin’, ya see. You got something and ya think,

maybe that Roemer should get this letter first,

before I talk to him. Tell him ya got a letter, man,

coming there. Or we gotta go to Baton Rouge. I

don’t know you gotta decide. Man, that’s your

line of business. It ain’t me, ya know, Think it

over. We got plenty of time but uh, we got to

work fast.29

actual mailing was arranged by Marcello’s secretary

and the agents in the following manner:

5-6.

“" See, e.g., Government exhibit 109-T, government transcript at

26 Government exhibit 313.

29 Government exhibit 109-T, government transcript at 10-11.

A-79 .

Decker: You want me to have him (Wachs) sign

it?

Hauser: Let me have, let him sign it. Address

the envelope and then ...

Decker: And I'll ...

Hauser: Then uh.

Decker: You want me to mail it to you?

Hauser: Would you mail it? I'd appreciate it

very much.

Wachs: Sign it.

Decker: Yeah.

Montague: Express mail.

Hauser: No, she’s gonna mail it.

Decker: If you mail it, ... I'll mail it at the Post

Office today, it’s okay.

Montague: Oh really. Okay that’s fine.20

The defendants have characterized this sequence of

conversations as evidence that the government or-

chestrated the mailing that provided federal jurisdiction

for at least one of the RICO predicate offenses. This

characterization ignores the general context provided by

other evidence showing that the government's role in the

mailing was not so extensive or outrageous that dismissal

of the indictment or entry of a judgment of acquittal is re-

quired. The proposal was prepared and placed in the mail

30 Id. at §.

A-80

as a result of persistent requests by the defendants that

Hauser and tke agents provide Roemer with just such a

written proposal. In their earliest meetings, Roemer had

suggested that Hauser send him a written proposal concer-

ning the insurance contract and made his assistant, Joseph

Terrell, available to provide information needed for

preparation of the proposal. As time passed and their

discussions continued, Roemer began to press Hauser to

send him the proposal. At a September 25, 1979 meeting in

Baton Rouge, the following conversation took place:

Roemer: Uh, I thought you was going to give

me a proposition. I’m talking about a, what the,

what you had to offer. You understand what I'm

talking about?

Hauser: Oh, I have a proposal the proposal. I'll

have that when I come back Monday.

Roemer: Okay.

Hauser: A week from Monday.

Roemer: Okay.31

On October 11, 1979, Roemer met Hauser again, this time

in Lafayette:

Roemer: Where's the damn paper you were go-

ing to have, I’m beginning to wonder about you

fella.

Hauser: Oh, man, I've been, I’ve been busy.

Roemer: Well I haven't so I just (unintelligible)

* «= = * * *

°? Government exhibit 77-T, government transcript at 8.

A-81

Roemer; When can, when can you give me this

proposal??4

Finally, in a November 2, 1979 conversation with Marcello,

Roemer again presses to be sent a proposal:

Roemer: Well I have been doin’ my thing. Get-

tin’ closer and closer to their thing, but I need to

hear. I need to see somethin’, what their porposal

is.

Marcello had also noted the importance of providing

Roemer with a proposal in his telephone conversation with

Hauser of September 21, 1979 in which he scheduled the

meeting between the agents and Roemer,24 and on

November 2, 1979 he assured Roemer that the proposal he

desired was on its way to Roemer.?° Thus, the preparation

of the proposal and the act of sending it to Roemer were

more the result of the prodding and persistent requests of

the defendants than of government planning or instigation.

Contrary to the argument of the defendants, Roemer

did not specifically expect or insist that the proposal be

personally delivered to him rather than mailed. In support

of this contention, the defendants rely principally on the

following conversation between Roemer and Hauser on Oc-

tober 11, 1979 in Lafayette:

32 , ’ a

oe Government exhibit 102—t. volume 2. government transcript

w

at

33 Government exhibit 110—t. government transcript at 31.

34 Government exhibit 71-T. government transcript at 1-4

35 Government exhibit 110-T. government transcript at 32.

A-82

Hauser: ....I can have the proposal ready in the

middle of next week. That's an intelligent answer.

Roemer: Uh huh. Where do you go from here?

Do you go from New Orleans from here or you go-

ing where?

Hauser: I’m going to New Orleans from here

and from then I’ma going to go back to LA for

one day, draft the proposal, sit down with my ac-

tuaries, draft the proposal and I’m gonna either

take a red eye from Houston here or stop in here

and leave the proposal, eh...I could leave it with

Carlos or could I leave it with Carlos and you

could pick it up. Could that be possible?

Roemer: Whatever, whatever's convenient for

you.

Hauser: That would be the best way if I were to

shoot in on a plane and shoot right out.

Roemer: I could meet you at the airport if you

like.

Hauser: Okay if you will. I don’t want to im-

pose on you...’cause I know what you gotta do.

Roemer: Yeah.

Hauser: Look I appreciate your job. I did it in

1960, okay, so I know what you're doing. You

don’t have time to go to the bathroom.

Roemer: You, you can, you can get it to him,

and he could get it to me. We got all kinds of

ways.

Hauser: Okay, I'll get it to Carlos then. Okay,

sometime in the middle of the week, ‘cause I’m

A-83

going to have a meet with Carlos on the Florida

situation. I’m gonna have the, the thing.

okay....

This conversation does not indicate, as defendants have

contended, that Roemer was interested only in a personal

delivery of the proposal and that the government manufac-

tured the mailing only as a means of creating federal

jurisdiction and an additional predicate offense for pur-

poses of its RICO charge. The conversation shows merely

an attempt by Hauser and Roemer to convenience each

other, leaving a variety of possible methods of delivery

open; it does not rule out use of the mails. Considered

together with Roemer’s numerous requests that he be sent

a written proposal, it demonstrates Roemer 's eagerness to

receive the proposal by almost any means available.

Moreover, there is ample evidence that Marcello and

Roemer in fact subsequently agreed to the mailing and ap-

proved it.3!

In short, the conduct of Hauser and the in-

vestigating agents, when viewed as a whole and together

with the activities and conduct of the defendants, was not

impermissibly outrageous and did not result in the ar-

tificial creation of federal jurisdiction. Both defenses re-

quire a level of governmental misconduct that far exceeds

the bounds of legitimate undercover law enforcement

techniques. In my view, the evidence indicates that the

government agents’ activities did not vary so dramatically

from the bounds of accepted and permissible law enforce-

ment practices that the governmental overreaching or

3© Government exhibit 102-T. volume 2, government transcript at

4-5.

37 See. e g.. portions of transcripts of tape-recorded conversations

and text at notes 49-51 infra.

A-84

artificially created jurisdiction defenses could successfully

be invoked. The evidence shows that the Brilab undercover

operation in Louisiana merely afforded the opportunities

and facilities for the commission of an offense. See United

States v. Russell, supra, 411 U.S. at 4, 93 S.Ct. at 1644-45.

The general thrust of the scheme, the specific direction it

took, and the details of its execution, as well as the federal

jurisdictional elements, were provided by the defendants. I

conclude that viewed as a whole the conduct of the govern-

ment in the Louisiana component of the Brilab investiga-

tion as it related to these two defendants does not require

dismissal of the indictment or acquittal on grounds either

of governmental overreaching or artificially created

jurisdiction.

Selective Prosecution

Having heard the evidence at trial, and having pro-

vided an opportunity post-trial for the submission of any

additional evidence the defendants desired to present for

my consideration, I conclude that Marcello’s claim that the

government engaged in arbitrary and discriminatory selec-

tive prosecution against him is also without merit. Because

criminal prosecutions are generally presumed to have been

undertaken in good faith and nondiscriminatorily, United

States v. Blitstein, 626 F.2d 774, 782 (10th Cir. 1980), cert.

denied, 449 U.S. 1102, 101 S.Ct. 898, 66 L.Ed.2d 828 (1981);

United States v. Catlett, 584 F.2d 864, 866 (8th Cir. 1978);

United States v. Falk, 479 F.2d 616, 619 (7th Cir. 1973), the

burden of proving discriminatory selective prosecution is

on the defendant who raises the defense. In the Fifth Cir-

cuit, the defendant bears the heavy burden of establishing

(1) that he has been singled out for prosecution while others

similarly situated have not generally been proceeded

against for similar conduct; and (2) that the government's

A-85

discriminatory selection of him for prosecution has been in-

vidious or in bad faith, ie. based on such impermissible

considerations as race, religion, or the desire to prevent his

exercise of constitutional rights. United States v. Uni Oil,

Inc., 646 F.2d 946, 953-54 (5th Cir. 1981): United States v.

Johnson, 577 F.2d 1304, 1308 (5th Cir. 1978).

Marcello has completely failed to sustain the heavy

burden imposed upon him by the jurisprudence concerning

his claim of selective prosecution. At trial, counsel for

Marcello elicited some testimony from two FBI agents

assigned to the Brilab investigation that Marcello has for

years been the subject of an open FBI file and the object

of FBI surveillance®® and is considered a leading figure in

organized crime.29 Reference was also made during the

trial to a government effort in 1961 to deport Marcello to

Guatemala using what can at best be characterized as

legally questionable means.?9 No convincing evidence was

presented however, to support the defendants’ contention

°° Trial testimony of Harold Hughes under direct examination by

defendant Marcello, July 24. 1981. Trial Transcript at 9190, 9198.

39 Trial testimony of Michael Wachs under cross-examination by

defendant Marcello. May 26. 1981. Trial Transcript at 1678-79.

40 Trial testimony of Harold Hughes and William Fleming under

direct examination by defendant Marcello. July 24. 1981. Trial

Transcript at 9177-82, 9190-98. Marcello’s 1961 deportation to

Guatemala is described in the district court's opinion in United States

ex rel Marcello v. District Director etc, 472 F.Supp. 1199

(E.D.La.1979), rev ‘a, 634 F.2d 964 (5th Cir.). cert. denied, 452 U.S. 917,

101 S.Ct. 3052, 69 L.Ed.2d 421 (1981). In reversing the district court and

affirming the Board of Immigration Appeals’ denial of Marcello’s ap-

plication for suspension of his deportation. the Fifth Circuit said the

1961 deportation to Guatemala “was apparently executed illegally:

arguably Marcello was shanghaied to Guatemala without prior notice to

him or his attorney by means of a Guatemalian birth certificate that the

Immigration and Naturalization Serivce (INS) may have known was a

forgery. 634 F.2d at 966.

A-86

that Brilab was designed to ‘‘get Marcello” or that

Marcello’s prosecution was motivated by government

frustration over its inability either to deport Marcello or to

link him inextricably and concretely to organized crime.

Marcello was not singled out for investigation and prosecu-

tion. Joseph Hauser’s decision to cooperate with the

government provided the investigators with a link to

several individuals with whom Hauser said he had illicit

dealings in the past. Marcello was in that group, and

nothing was presented at trial to overcome the presump-

tion that his prosecution was undertaken in good faith.

Sanctions for Leaks to the Press

Prior to trial, I denied defendants’ motion to dismiss

the indictment against them on grounds that government:

initiated leaks to the news media concerning the Brilab in-

vestigation and subsequent grand jury proceedings had

prejudiced them. I deferred ruling on the defendants’ alter-

native motion for sanctions and provided the government

an opportunity to supplement its proffer of affidavits of of-

ficials who participated in the grand jury proceeding. The

government subsequently supplemented its response to

the defendants’ motion for sanctions by filing the af-

fidavits of Wachs, Montague, Harold Hughes and Vincent

Coyle, the FBI agents engaged primarily in the local Brilab

investigation.41 Each denied any involvement in leaks of

information to the press. I have now reexamined all

materials previously submitted to the court in connection

with this motion, including the affidavits of government of-

ficials involved in the investigation, the Justice Depart-

ment’s Blumenthal Report, and the newspaper clippings

41 Court Record Document No. 232. The affidavits of other

government participants in the investigation are attached as exhibits to

Court Record Document No. 131.

A-87

and transcript of a television newscast submitted by the

defendants. I have determined based on this reiew that no

further hearings or investigation of the alleged leaks are re-

quired and that imposition of sanctions against the govern-

ment would be inappropriate. Accordingly, the defendants’

motion for sanctions is denied.

Sufficiency of the Evidence

The defendants, particularly Roemer, contend in

their post-trial motions that in order to establish a RICO

conspiracy. the government must prove beyond a reason-

able doubt that the defendant personally and actually

agreed to participate in the affairs of an enterprise and to

commit two or more predicate crimes as part of his par-

ticipation in the affairs of that enterprise. Essentially, the

argument of each defendant is that the evidence is insuffi-

cient to support a finding that each agreed to commit the

requisite two predicate offenses, specifically because

neither agreed to use the mails or interstate telephone

facilities in furtherance of the scheme.

In determining these motions for judgments of ac-

quittal on grounds of insufficiency of the evidence, I must

view the evidence adduced during this lengthy trial in the

light most favorable to the government. ‘The verdict of a

jury must be sustained if there is substantial evidence, tak-

‘ing the view most favorable to the Government, to support

it.’ Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457,

469, 86 L.Ed. 680 (1942): see Burks v. United States, 437

U.S. 1, 16-17, 98 S.Ct. 2141, 2150, 57 L.Ed.2d 1 (1978);

United States v. Marx, 635 F.2d 436, 438 (5th Cir. 1981).

In the Fifth Circuit, the standard for proving the ex-

istence of a RICO conspiracy was established in United

A-88

States v. Elliott, 571 F.2d 880, 903 (5th Cir.), cert. denied

sub nom. Hawkins v. United States, 439 U.S. 953, 99 S.Ct.

349, 58 L.Ed.2d 344 (1978). In Elliott the court recognized

that the object of a RICO conspiracy is to commit a

substantive RICO offense by conducting or participating

in the affairs of an enterprise through a pattern of

racketeering activity. The gravamen of the RICO con-

spiracy charge is not that each defendant agreed to commit

each of the separate predicate offenses that demonstrate

the pattern of racketeering activity. but that ‘each agreed

to participate, directly and indirectly, in the affairs of the

enterprise by committing two or more predicate crimes..."

Id. at 902. The court said:

To be convicted as a member of an enterprise

conspiracy, an individual, by his words or actions,

must have objectively manifested an agreement

to participate, directly or indirectly. in the affairs

of an enterprise through the commission of two or

more predicate crimes. One whose agreement

with the members of an enterprise did not include

this vital element cannot be convicted under the

Act.

Id. at 903 (emphasis by the court). Accord: United States

v. Phillips, 664 F.2d 971, 1038 (5th Cir. 1981); United

States v. Sutherland, 656 F.2d 1181, 1189 (5th Cir. 1981);

United States v. Welch, 656 F.2d 1039, 1056 n.24 (5th Cir.

1981); United States v. Martino, 648 F.2d 367, 383 (5th Cir.

1981): United States v. Bright, 630 F.2d 804, 834 (5th Cir.

1980).

Thus. while a substantive RICO charge requires pro-

of of the exic tence of an enterprise which affects commerce

and that the defendant participated in the conduct of the

enterprise's affairs by committing at least two of the

A-89

designated acts of racketeering activity, ‘‘[a] RICO con-

spiracy charge requires the additional element of agree-

ment; ... the agreement involved in a RICO conspiracy

must include the vital element of agreeing to commit the

predicate acts.’’ United States v. Martino, supra, 648 F.2d

at 383. This is not to say, of course, that a RICO conspiracy

requires the actual commission of the requisite predicate

offenses. No actual acts of racketeering need occur; there

need only be an agreement by each defendant to commit

two predicate offenses coupled with some overt act by one

of the conspirators in furtherance of the conspiracy. / nited

States v. Phillips, supra, 664 F.2d at 1038; United States v.

Sutherland, supra, 656 F.2d at 1186-87 n.4; United States

v. Winter, 66.3 F.2d 1120, 1136 (1st Cir. 1981). Such an agree-

ment may be proved by circumstantial evidence. United

States v. Sutherland, supra, 656 F.2d at 1188.

The defendants concede in their post-trial motions

that the evidence, viewed in the light most favorable to the

government, establishes an agreement to commit one

predicate offense, the bribery of Roemer in violation of

Louisiana law,4? and I agree with this assessment of the

evidence. The defendants argue, however, that there was

no actual agreement to commit the requisite second

predicate offense. Roemer’s argument on this point and the

government's response raise an important threshhold issue

relating to the accuracy and sufficciency of the jury in-

structions concerning the bribery charged as a predicate of-

fense to the RICO conspiracy in this case.

At various times during the trial and preparation of

the instructions to the jury, I discussed with counsel the

42 See Roemer s Memorandum in Support of his Post-trial Motion

for a Judgment of Acquittal or. Alternatively. for a New Trial. Court

Record document No. 548. at 2

a

A-90

nature of the bribery charge involving Roemer and heard

argument on the subject. The government contended dur-

ing trial that the Roemer bribery component of the RICO

scheme actually constituted three separate bribes and

predicate offenses, specifically (1) the payment of $10,000

to Roemer in exchange for obtaining the state employees

insurance contract; (2) the payment of an additional

$15,000 in exchange for obtaining the same contract; and

(3) the payment of a percentage of commissions to Roemer

in exchange for maintaining the state insurance contract in

place once it had been obtained by the agents. I rejected

this argument at trial. The government now contends,

however, that because I included in the instructions a

reference to Paragraph (E) of Count Two of the

indictment?® in the section of the charge summarizing the

forty-two page indictment for the jury, the instructions in

fact allowed the jury to find an agreement to commit three

separate briberies, and therefore three predicate offenses,

as part of the Roemer transaction. The defendants argue in

their post-trial memoranda that during preparation of the

jury instructions I had agreed with their characterization

of the transaction as a single offense.

I disagree with the government's contention that the

instructions allowed the jury to find three separate

predicate offenses in the Roemer bribery transaction. Dur-

ing the trial | agreed with the defendants that the Roemer

bribery constituted only one predicate offense, and the jury

instructions, examined and understood as a whole, reflect

that view. The view of the Roemer transaction reflected

43 Paragraph (E) of Count Two of the supreseding indictment

Court Record Document No. 56, at 17-18. was a two-page chronological

listing and description of the specific acts which the indictment alleged

and the government contended constituted bribery in violation of Loui-

siana law

A-91

in the jury instructions was based on my interpretation of

the Louisiana bribery statute, La.Rev.Stat.Ann. § 14:118

(West Supp.1980), in light of the published Loouisiana

Supreme Court jurisprudence available at the time of trial,

State v. Ponthier, 391 So.2d 1138 (La. 1980),44 and the

evidence adduced during the proceedings. The statute and

the Ponthier case define bribery in violation of Louisiana

law in terms of specific intent to influence official conduct

rather than in terms of amounts or installments of money

paid to gain that influence. At trial, I concluded that the

payments offered to or accepted by Roemer constituted a

single bribery offense, and therefore a single predicate

crime for RICO purposes, because each payment or pro-

mise to pay was made to influence only the single official

act of obtaining the state emplovees insurance contract for

the agents.

4 After the jury instructions in the Brilab case were given and

the verdicts rendered, two additional cases relevant to the issue of the

number of bribery offenses included in the Roemer-Marcello transaction

were published. In L’nited States v. Colacurcio, 659 F.2d 684 (5th Cir

1981), decided almost three months after the Brilab verdicts were

returned, and State v. Hebert, 402 So.2d 675 (La.1981), decided on June

22, 1981 but not published until after a motion for rehearing had been

denied in September 1981, the courts recognized that a series of

payments made, not to influence a single act of official conduct. but to

provide continuing protection or influencce over a period of time. could

be considered separate bribes and separate offenses. These decisions

arguably would allow the Roemer-Marcello transaction to be considered

as at least two separate bribes consisting of

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