Opposition Brief — Gillock v. United States

Office -Supreme Court, U.S,

FILED

FOL 16 1985

ALEXANDER L. STEVAS,

hana CLERK

In the Supreme Court of the Hnited States

Octoser TeRrM, 1985

No. 84-1851

EpGAR HARDIN GILLOCK, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES

CHARLES FRIED

Acting Solicitor General

STEPHEN S. TROTT

Assistant Attorney General

JoeL M. GERsHOWITZ

Attorney

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTIONS PRESENTED

1. Whether the court of appeals erred in concluding that

the misjoinder of three counts of the indictment was harm-

less error and therefore did not require reversal of petition-

er’s convictions.

2. Whether the evidence was sufficient to support peti-

tioner’s convictions for mail fraud, wire fraud, and

extortion.

3. Whether evidence was properly admitted at trial

under the co-conspirator exception to the hearsay rule.

(I)

Opinion below

Jurisdiction

Statement

Argument

Conclusion

TABLE OF CONTENTS

TABLE OF AUTHORITIES

Cases:

Schaffer v. United States, 362 U.S. 511 ....

United States v. Barta, 635 F.2d 999,

cert. denied, 450 U.S. 998 ..............

United States v. Bohonus, 628 F.2d 1167,

cert. denied, 447 U.S. 928 ..............

United States v. Bronston, 658 F.2d 920,

cert. denied, 456 U.S. 915 ..............

United States v. Bryza, 522 F.2d 414,

EES SE Ey

United States v. Bush, 522 F.2d 641,

GE i BIT cece cccccccs

United States v. Castor, 558 F.2d 379,

cert. denied, 434 U.S. 1010 .............

United States vy. Feldman, 711 F.2d 758,

cert. denied, 464 U.S. 939 ..............

United States v. George, 477 F.2d 508,

cert. denied, 414 U.S. 827 ..............

United States v. Keane, 522 F.2d 534,

cert. denied, 424 U.S. 976 ..............

(111)

“eevee eeeeeeeeeeeeeeeeeeeeeeeeeee

cere

IV

Cases—Continued:

United States v. Lane, cert. granted,

Fe ORE CE 80s SUED Secs cdeccccnvesess 4

United States v. Mandel, 591 F.2d 1347,

vacated, 602 F.2d 653, cert. denied,

ES ce ice cee hed ees ecaeeurese 6

United States v. Mazzei, 521 F.2d 639,

Mc ME WE, BED. coccvccstostccsecs 7

United States v. Rabbitt, 583 F.2d 1014,

cost. Gomind, 6499 U.S: DRG. .6s ccccccccces 5, 6, 7

United States v. Rindone, 631 F.2d 491 ........ 7

United States v. Shamy, 656 F.2d 951,

a es CT RE oc cava ber cs ss ccweis 6

United States v. States, 488 F.2d 761,

RI, GET Ties EE phe bec ccieseveccses 6

United States v. Venneri, 737 F.2d 995,

cert. denied, No. 84-266 (Nov. 26, 1984) ....... 6

Statutes and rules:

Hobbs Act:

ee, MNS ON is cc aeaaee ee 2,4

Pe es, SEED 6:64) hb cc cexe bv wcdeees 6

eT Feat its os as eae k eben eers 2

PE Cc Wee bRGks Sewee eth weee eye |

es oe ae uae bale ween 12

oe het unekeen chatae Rab es 2

Bs FED sos bcccceeducccscevevececs 2

V

Page

Statutes and rules—Continued:

Fed. R. Crim. P. :

SEE: Kas Ke vnnnereueccesese eee 3

CE rn POET ee Te. i 5

In the Supreme Court of the dnited States

OCTOBER TERM, 1985

No. 84-1851

EDGAR HARDIN GILLOCK, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES

OPINION BELOW

The opinion of the court of appeals (Pet. App. 1-20) is

reported at 752 F.2d 1116.

JURISDICTION

The judgment of the court of appeals was entered on

January 14, 1985. A petition for rehearing was denied cn

March 1, 1985 (Pet. App. 21-22). On April 22, 1985, Justice

O’Connor extended the time for filing a petition for a writ of

certiorari to May 30, 1985, and the petition was filed on

May 25, 1985. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

STATEMENT

Following a jury trial in the United States District Court

for the Western District of Tennessee, petitioner was con-

victed on six counts of mail fraud, in violation of 18 U.S.C.

1341, two counts of wire fraud, in violation of i8 U.S.C.

(1)

2

1343, one count of extortion, in violation of 18 U.S.C. 1951,

one count of tax evasion, in violation of 26 U.S.C. 7201,

and one count of conspiracy, in violation of 18 U.S.C. 371. )

Petitioner was acquitted on three counts of making false tax |

returns, in violation of 26 U.S.C. 7206, and a mistrial was |

declared with respect to six counts charging him with extor- |

tion. He was fined $10,000 and sentenced to concurrent

terms of four years’ imprisonment on the fraud, extortion,

and conspiracy counts and a consecutive three-year term on

the tax evasion count. The court of appeals affirmed except

with respect to one of the wire fraud counts and the conspi-

racy count (Pet. App. 1-20).!

1. The evidence at trial showed that petitioner, a former

Tennessee state senator, used his influence to assist in the

sale of Honeywell computers to state and locai governments

in exchange for payments in excess of $150,000. Oliver

Drew and Jack Owen, two Honeywell employees, ap-

proached petitioner in 1975, seeking his assistance in their

efforts to sell a Honeywell computer to the Tennessee

Department of Employment Security. After the Depart-

ment announced plans to purchase the computer, petitioner

asked Owen for compensation. Owen replied that Honey-

well had a policy of prohibiting payments to public officials,

but he contrived a scheme to pay petitioner $4,000 indi-

rectly through a consulting firm. Pet. App. 1-2.

In 1976, co-defendants Allan Bibby and A. Arthur Ayers,

Honeywell executives, devised a plan to defraud the com-

pany by obtaining kickbacks from several sales of Honey-

well computers financed by Financial Marketing Services,

1Co-defendants Ailan Bibby and A. Arthur Ayers were convicted on

the conspiracy, mail fraud, and wire fraud counts. The court of appeals

affirmed their convictions except with respect to one of the wire fraud

counts. Bibby has sought review by this Court. Bibby v. United States,

No. 84-1692.

EO ee

3

Inc., which was owned by Jack Camarda, a former Honey-

well employee. As a result of this scheme, Bibby and Ayers

each received $600,000 from Camarda out of the proceeds

of 12 computer sales over the course of four years. In order

to conceal the payments from Honeyweil, they were fun-

nelled through a cattle ranching operation. Pet. App. 2-3.

One of the sales involving kickbacks was to Shelby

County, Tennessee. Petitioner agreed with his co-defendants

and Camarda to use his influence to convince the county to

purchase an upgraded Honeywell computer system. They

paid him $3,000 per month for six months as a retainer and

$130,000 as a commission after the sale was finalized. The

commission was paid to a company operated by a friend of

petitioner’s, who then used the money to pay some of peti-

tioner’s bills. Petitioner never reported the commission as

taxable income. Pet. App. 3-4.

2. The court of appeals concluded that three counts

charging petitioner with tax fraud in connection with unre-

lated deductions for attorney’s fees were improperly joined

under Fed. R. Crim. P. 8 with the counts relating to the

Honeywell transactions (Pet. App. 5-7). The court con-

cluded, however, that the misjoinder was harmless error in

view of petitioner’s acquittal on the misjoined counts, the

relatively insignificant attention devoted to them at trial,

and the discrete nature of the misjoined offenses (id. at 7-9).

The court of appeals reversed petitioner’s conspiracy

conviction on the ground that he was not part of the central

conspiracy between his co-defendants and Camardato split

the profits from a series of computer sales, but rather was

involved only in a conspiracy with respect to the Shelby

County sale (Pet. App. 11-12). Notwithstanding the proof

of multiple conspiracies, the court of appeals concluded

that the record adequately supported the admission of co-

conspirator statements under Fed. R. Evid. 801(d)(2)(E)

(Pet. App. 12-13).

4

Finally, the court of a,peals ruled that, with the excep-

tion of one wire fraud count, the evidence was sufficient to

sustain petitioner's convictions for mail fraud, wire fraud,

and extortion.’ As to the fraud counts, the court reasoned

that Honeywell had been defrauded by the defendants’

receipt of kickbacks and that petitioner was aware that he

was not entitled to the funds that he received (Pet. App.

15-17). With respect to the extortion count, the court con-

cluded that petitioner violated the Hobbs Act (18 U.S.C.

1951) by receiving money in exchange for his promise to use

his influence as a state official to assist in closing the sale

with Shelby County (Pet. App. 18-19).

ARGUMENT

1. Petitioner contends first (Pet. 25-40) that his convic-

tions should be reversed on the basis of misjoinder.

a. Referring to the misjoined tax offenses, petitioner

argues (Pet. 25-27, 33-40) that misjoinder may never be

considered harmless error. This question is identical to that

presented in United States v. Lane, cert. granted, No.

84-744 (Feb. 19, 1985). Accordingly, the petition should be

held with respect to this question pending the Court’s deci-

sion in Lane, and then disposed of as appropriate in light of

that decision.’

?The court of appeals reversed the one wire fraud count because the

government had not proven what was said during the phone call that

formed the basis for that count (Pet. App. 17).

*We have recommended the same course with respect to the petition

filed by co-defendant Bibby (No. 84-1692).

To the extent that petitioner is also arguing that even if misjoinder

may constitute harmless error, the court of appeals erred in concluding

that the error was harmless here, that factbound contention obviously

does not merit review by this Court. Especially in view of petitioner's

acquittal on the misjoined counts and their minor role at trial, he could

not have been harmed by their presence in the case. See Pet. App. 7-9.

5

b. Petitioner also contends (Pet. 28-33) that he was pre-

judicially misjoined with his co-defendants in light of the

reversal of his conspiracy conviction. This argument lacks

merit. It is well settled that, at least in the absence of bad

faith (which is not alleged here), dismissal of a conspiracy

count does not retroactively invalidate t!e initial joinder

under Fed. R. Crim. P. 8(b). Schaffer v. United States, 362

U.S. 511, 513-517 (1960). Moreover, even without the con-

spiracy count, the joinder of all defendants plainly was

proper here, as they had “participated * * * in the same

series of acts or transactions constituting an offense or

offenses” under Rule 8(b). In particular, all of the defend-

ants were charged and convicted on the same mail and wire

fraud counts. Accordingly, there was no misjoinder apart

from the tax counts involving attorneys’ fees.

2. Relying on United States vy. Rabbitt, 583 F.2d 1014

(8th Cir. 1978), cert. denied, 439 U.S. 1116 (1979), peti-

tioner argues next (Pet. 40-52) that the evidence was insuffi-

cient to support his convictions for fraud and extortion.

The court of appeals correctly rejected this claim.

a. The defendant in Rabbitt was a Missouri state legisla-

tor. In return for a fee, he introduced an architectural firm

to persons who might have been able to secure governmen-

tal construction contracts for the firm (583 F.2d at 1020-

1021). His prosecution for mail fraud rested on the theory

that he had defrauded the citizens of Missouri (id. at 1024-

1025). The court of appeals reversed the mail fraud convic-

tions because there was no evidence that the defendant’s

conduct had injured the public or affected the performance

of his duties (id. at 1026).

Here, by contrast, petitioner was charged with defraud-

ing Honeywell, not the citizens of Tennessee. The court of

appeals correctly found (Pet. 15-17) that Honeywell had in

fact been injured by petitioner’s fraud because petitioner’s

6

receipt of kickbacks violated the company’s policy against

payments to public officials and because the cc mpany was

deprived of the loyal and faithful services of its employees.‘

No monetary loss is required, although in fact the kickbacks

here by their nature prevented Honeywell from receiving a

higher profit or offering a lower price (which may have

helped it to obtain business in the future). The courts of

appeals have uniformly held that the mail fraud statute

extends to breaches of duty similar to that involved in this

case, and this Court has consistently declined to review

tho.. decisions.’ There is no reason for a different result

here.

b. Nor is petitioner’s extortion conviction inconsistent

with United States vy. Rabbitt, supra. Under the Hobbs

Act, it is illegal to “obtain{] * * * property from another,

with his consent, * * * under color of official right” (18

U.S.C. 1951(b)(2)). In Rabbitt, the court of appeals applied

‘Petitioner's clandestine receipt of the kickbacks (see Pet. 16-17)

negates any claim of ignorance of the company’s policy on his part.

*See, ¢.g., United States v. Venneri, 736 F.2d 995 (4th Cir. 1984),

cert. denied, No. 84-266 (Nov. 26, 1984); United States v. Feldman,711

F.2d 758, 763 (7th Cir.), cert. denied, 464 U.S. 939 (1983); United States

v. Bronston, 658 F.2d 920, 926-927 (2d Cir. 1981), cert. denied, 456 U.S.

915 (1982); United States v. Shamy, 656 F.2d 951, 957 (4th Cir. 1981),

cert. denied, 455 U.S. 939 (1982); United States v. Barta, 635 F.2d 999

(2d Cir. 1980), cert. denied, 450 U.S. 998 (1981); United States v.

Bohonus, 628 F.2d 1167, 1172 (9th Cir.), cert. denied, 447 U.S. 928

(1980); United States v. Mandel, 591 F.2d 1347, 1361-1364, vacated on

other grounds, 602 F.2d 653 (4th Cir. 1979) (en banc), cert. denied, 445

U.S. 961 (1980); United States vy. Castor, 558 F.2d 379, 383 (7th Cir.

1977), cert. denied, 434 U.S. 1010 (1978); United States v. Bush, 522

F.2d 641, 646-648 (7th Cir. 1975), cert. denied, 424 U.S. 977 (1976):

United States v. Keane, 522 F.2d 534, 544-546 (7th Cir. 1975), cert.

denied, 424 U.S. 976 (1976); United States v. Bryza, 522 F.2d 414 (7th

Cir. 1975), cert. denied, 426 U.S. 912 (1976); United States v. States,

488 F.2d 761 (8th Cir. 1973), cert. denied, 417 U.S. 909 (1974); United

States v. George, 477 F.2d 508 (7th Cir.), cert. denied, 414 U.S. 827

(1973).

7

(583 F.2d at 1027) the established rule tiiat a public official

violates the Hobbs Act by receiving payments in connection

with the performance of an official function even where

“(t]he official [does) not control the function in question,”

so long as “the extorted party possesses a reasonable belief

in the official’s powers.” However, no such belief was

proven in that case (id. at 1028). Here, o1 the other hand,

the court of appeals, applying the same rule, expressly

found (Pet. App. 19) that petitioner’s “past performance on

the State of Tennessee contract, combined with his assur-

ances to Oliver Drew that he had ‘influence in Shelby

County,’ were sufficient to create a reasonable belief that he

could deliver the goods.” This was plainly sufficient to

violate the statute. See, e.g., United States v. Rindone, 631

F.2d 491, 495 (7th Cir. 1980); United States v. Mazzei, 521

F.2d 639, 643 (3d Cir.) (en banc), cert. denied, 423 U.S. 1014

(1975).

3. Finally, petitioner argues (Pet. 52-62) that the admis-

sion of certain co-conspirator statements under Fed. R.

Evid. 801(d)(2)(E) was erroneous because the district court

incorrectly assumed that only one conspiracy had been

proven at trial. The court of appeals, however, took note of

this problem and concluded (Pet. App. 13), after reviewing

the record, that the evidence was properly admitted even

though multiple conspiracies had existed. This factbound

conclusion obviously does not warrant review by this

Court.

8

CONCLUSION

The petition should be held with respect to Question |

pending the Court’s decision in United States v. Lane, No.

84-744, and then disposed of as appropriate in light of that

decision. In all other respects, the petition should be denied.

Respectfully submitted.

CHARLES FRIED

Acting Solicitor General

STEPHEN S. TROTT

Assistant Attorney General

Joe, M. GERSHOWITZ

Attorney

JULY 1985

DO)-1985-07