# Brief for the US in Opposition — Art National Manufacturers Distributing Co. v. Federal Trade Commission > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385601_0353%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the US in Opposition - **Published:** January 1, 1962 - **Citation:** 370 U.S. 939 ## Text “INDEX Opinions below. .-. --- ~~. - - Jurisdiction. ____. nonce Questions presented. __.._ - - ; x Statute involved__ Statement Sat dae dia 7 A: Events leading up tou sie | present pros- Pe cokecsnedewecemacaecne —_ rs Evidence of petitioner McCue, Jr. ‘s guilt : . Evidence of petitioner MeCue, Sr.’s guilt _- eeeae a tk on atetiivn tueedwbus Conclusion ~.— _.. - _ , CITATIONS Cases: Brandote v. *niled States, 268 F. 559. Browder v. United States, 312 U.S. 335 Butzman v. United States,.205 F. 2d 343, cer- tiorari denied, 346 U.S. 828__. Cohen v. United States, 201 F. 2d 386, certi- orafi denied, 345 U.S. 951-20. Conrad v, UV nited States, 255 F. 2d 247. Cooper v. United States, 282 F. 2d 527. De Rosier v. United Stafes,218 F.2d 420.___ - Fisher v. United State%, 254. F. 2d 302, certi- orari denied, 358 YS. 895_______- ina Haminer vy. United States, 271 U.S. 620. oenes Knowles v. United States. 224 F. 2d 168. __ - Marzani v. United oe 168 F. 2d 133, affirmed, 335 U.S dns hh oe ee eee Petite v. United States, “ v S. 529... Pittsburgh Plate Class Co. v. ‘United States, 643221-42——-1 eae *Cases—Continued y ae a _ Seymour v. United States,-77 F. ate. 23. Smith v.. United States, 257 F. 2d 133__--.-- "= ae Todorow v: United ‘States, 173 F. 2d 439, cer- ' - tiorari denied, 337 U.S. 926... -..2-.---- 21 /" . Travis v. United 8 , 269 F.2d 928, re- - ; >, “ S versed, 36409).S. 631]-. --.-- teawchen anon 21 ‘ .. United States v. Apex Distributing Co., 148 F. RN sinks scan Mine cenad cnckce 18 i see States v. Beacon Brass! Co., 344 U. S. 43 20 nited States v. Bramblett, 848 U. 8. 503-____: 19 United Statey v. Gilliland, 312 U.S. 86. -_- 17, 18,19 - United States v. Goldsmith, 108 F. 2d 917, cer- ” tiorari denied, 309 U.S. 678-_.__..-.------ 21 . “United States v. Kiltian, 246 F. 24.77__------ 21 United States v. McCue,.160 F. Supp. 595--- - 5s United States v. Meyer, 140 F, 2d 652--_---.- 20 ‘ United States v. Philippe, 173-F. Supp. 582... -19 * United States v. Quirk, 167 F. Supp: 462, af- , ‘firmed, 266 F..2d 6....:... euee akc k as 2°. 18 United States v. Silver, 235 F. 2d SS 19 United States-v.. Wood? 14 Pet. 430_....--- ind 21 United States v. Zavala, 139.F. 2d S..2..... @ . Weiier v. United States, 323-U.S. 606-.2.--.2 21: - Young v. United States, 214 F, 2d 232.--..-. 23 —. Statutes: = ~ — Inte a Nenu Code‘of 1939: Sec 5(a) (26 U.S.C. 1952. ed., Sec: PUES tis de nnadaweeun sees "4,5, 11,13 Sec. 145 (b) {26 U.S.C. es ed., Sec. Ns echo eh 4,5, 11, 13 . . Sec. 3616(a) (26 U.S.C. “1952 ed., Sec. Re, Seen pe ee 11, 13 18 U.S.C. 1001__+.---- 2,8, 12, 13, 14, 17, 18, 19, 21 Miscellaneous; , Balter, Fraud Under Federal Tox Law (2d ed. ee 9 Sein tc eycdeand eae wucmerece 17 -™ ee. 3 on Qe — Court of he United Sites : | OctoneR TERM, 1961 c ~ No. 981 . JAMES O. McCus, JR, AND James O. McCur, SRs e. PETITIONERS * | 3 £ | v. _Unitep States or AMERICA, ® - ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIROUIT BRIEF FOR THE UNITED STATES IN OPPOSITION __ OPINIONS BELOW - | The opinion of the court of appeals (Pet. 5a-17a) has not yet been reported. _ One opinion of the district court (P2A. 115a-134a)' is reported at 178 F. Supp. 426; a second opinion of. the district court (P.A- i si is unreported. JURISDICTION ; The ‘uihalabaiats of the court of appeals were entered’ on March 20; 1962 (Pet. la—4a), and_a timely petition 1In this brief in opposition, as in the petition. for a writ of certiorari, petitioners’ appendix in the court below (“Appel- lants’ Appendix”) is. designated “P.A.,” and the government’s (“Appellee’s Appendix”) is designated “GA. * (1) A , 9 for rehearing was denied on April 20, 1962.* The peti-. tion for a writ of certiorari was filed -on May 18, 1962. The — of this Court is invoked under 28 USC. 1254(1)> eae, QUESTIONS PRESENTED ° 1, Whether. the. bringing of this“ prosecution for — ; mpking false oral statements in 1954 to Treasury agents ‘investigating petitioners’ income tax hability violated ° fair standards of federal criminal justice i in view of thé prior ‘disposition of indictments charging petitioners with attempts in 1951 and 1952 to evade and ‘defeat their ineome taxes. ; . 2. Whether ‘petitioners’. conduct in making ‘false oral statements to Treasury agents in‘'a matter within the jurisdiction of the Internal Revenue Service con- stitutes a violation of 18 U.S.C. 1001. | | 3. Whether the government’s failure to have’ cer- tain grand jury testiniony recorded by a stenographer constituted reversible error. 4: Whether the question: asked of petitioner Me- Cue, Sr., in answer to which he mads a false state- - ment, was too vague and ambiguous : to support a conviction. - STATUTE INVOLVED Section 1001 of the Criminal Code (18 U.S.C. 1001) ‘provides: ‘Whoever, in any matter within the jurisdic- tion of any department or ageney ef the United States: knowingly and willfully falsifies, con-. ceals or covers up by any trick, scheme, or device a material ‘fact, or makes any false, fictitious or fraudulent statements or repre- ” v sentations, or makes or uses any false writing <¢- * orMocument knowing the same to contain any nig fictitious or fraudulent statement or en- Ay try, shall be fined not more than $10,000 my five years, or hott ——_—__—_.. ot . STATEMENT On Fehruary 2, 1959, the petitioners were indicted — in the United States District Court for the District of Connecticut; each on three counts, - for having ' knowingly and wilfully made false statements and representations to.specia] agents of the Internal Rev- | enue Service in August 1954, in a matter within ihe jurisdiction of the Treasury Department, Internal Revenue Service, in violation of 18 USC. 1001 (P.A. 3a, 6a-8a, 418a-420a). After a seven-week ‘trial be- fore a jury, petitioner McCue, Jr., was convicted in’ May 1960 on two evunts (P.A. 314a—375a ) and was fined $5,000 on each count and sentenced to -concur- rent one-year prison terms, execution of which was to . be suspended after service of four months and peti- tioner to be placed. on probation for one year from that date (P.A. 409a). After. an eleven-day trial before another jury, petitioner McCue, Sr., was con: victed in October 1960 on one counit (P.A. 547a) and was: fined $5,000 and sentence d'to serve a one-year: prison term, with the same provision for suspension after four months and one year’s probation running from that date (>, A. 551a-552a). ‘A. EVENTS izapiio UP. TO THE PRESENT PROSECUTION In the latter part of 1954, a Treastury special agent ‘ was conducting an investigation of the income tax returns of petitioners for the years 1946-1952 and ” y. , 4... | those of the Stamford Rolling Mills Company (a corporation) for the fiseal years ended Augu&t 31, 1947, through ‘August 31, 1951 (G.A. 52-53, 435) ~ Petitionet McCue, Sr., was President and Treasurer of the corporation; petitioner McCue, Jr., was Vice- President; and the entire stock of the corporation was held by the McCue family and in family trusts (G.A. 89, 153). Petitioners made the false state- ‘ ments involved in this prosecution at separate con- ferences: in August 1954 in» response to questions — -put to them by the agent (see pp. 5-10, (ufra).2 Some . - ten months later the agent submitted his report, ree- ommending that both petitioners be prosecuted for the wilfu! attempted evasion of income taxes (P.A. “178a, 451a-452a; G.A. 53, 439). The agent did not - recommend prosectition for the making of false oral statements in 1954 (G.A. 66, 448, 451, 558). In May 1956 the Department of Justice directed. the then United States Attorney to institute criminal - proceedings against both petitioners for ‘the wilful attempted evasion of their personal income taxes for the years 1950 and 1951, ‘in. violation of Section 145(b) of the Internal Revenue Code of 1939, a fe lony provision (P.A. 20a). The then United States At- - torney requested authorization to prosecute petition- ers instead under Section 145(a) of the Code, a misdemeanor provision, but. such authorization was ?Coilaborating in the investigation, of which the special agent was in charge, was an. Internal Revenue agent, who handled the “audit” or civil tax aspects of the case and avho was present at the conferences in Atagust 1954 (G. A. 03, 415, wil {> ay denied (PLA. 19, oa). Ih, March 1957, a grand jury indicted petitioners for a Laie of Section * 145(b) (P.A. 14a-18a). On April 15, 1957, the then | United States Attorney, appearing in court with peti- -tioners and their. counsel, moved the court to allow McCue, Sr., to pleaa to a misdemeanor charge under _ Section: 145(a) and to dismiss the charge against MeCue, Jr. (PLA. 558a, 5660). McCue, Sr.. pleaded nolo par ndere, and the court found him guilty a as ‘to two counts, adjudging cone urrent sentences of a £10,000 fine, a suspended prison term of one year and two years’ probation; the court.also dismissed the, /indictment aghinst McCue, Jr. (PLA. 564a-566a).° B. EVIDENCE OF PETITIONER MCCUE, JK.’S GUILT Petitioner MeCue, Jr, aiade the false oral state- ments toa Treasury nipgy agent at a conference held . on Angust 31, 1954 (G.A . do), 418-429). . McCue, J Tes _¢ame.to the meeting seul, Was accompanied by his attorney, was advised of his constitutional rights — and stated that he understood them (G.A. 418). He. gave testimony nuder oath (ibid. ). The comits as to which he was found guilty (C ‘outs J and III) related to false travel vouchers and to water wells drilled on “One week later. the then United States Attorney appeared before the court accompanied by an attorney from the dDe- partment. of Justice and moved that the judgment convicting MeCue. Sr., of violating Section 145(a) be vacated on the ground that, since a violation of that section was not a lesser included offense under Section 145(b), the court had been without jurisdiction to render the judgment. This motion gras denied. United States v. McCue, 160 F. Supp. 595 (2. Conn.). oo . P ; ° b his personal estate. The evidenge of his guilt may be summarized briefly as follows: 1. During the period August 1947-1951, monthly travel vouchers were submitted tothe corporation on behalf of petitioner McCue, Jr., averaging $1,774.00 - per month over the, four-year period (GA, 372-399). _ The voucher was usually prepared at the end of each month by McCue, Jr:, and given to’ the corporation's paymaster, who would prepare the reimbursement?” check, «ash it at the bank and turn the cash over to McCue, Jr. (G.A, 92, 97-98, 100, 113-114, 133-143). No substantiating documents were ever presented to support McCue, Jr.'s claim for payment (G.A, 104). All of these amounts were treated as deductible ex- penses by the corporation (G.A, 102). At the August 31, 1954, conference, the 'Preasury special agent asked McCue, Jr., **Were you at all times at the places shown on the dates shown on these memos 2°"; * peti- tioner McCue, -- answered under oath, * ¥es-——fethe—-—— hest«f my knowledge we were; ves” (G.A. 427). This answer, which was the basis for Count I, was false. - As. the court below described the government's evi- dence on this.point (Pet. 9a) : , The Government was able to show from cor- porate records, iieluding the gatemen’s books, cafeteria slips and telephone tol] slips and from the records of the McCues” country club that they were in fact at the plant or nearby on. the dates on which, according to the travel vouchers, they purported to be in other cities. ‘Tt is clear from the context that “memos” referred to the travel vouchers. . - o . - ‘ Indeed, defense counsel conceded in his summation tu the jury that the MeCnes were usually not at the places on the dates shown in. the travel vouchers (G_A. 05, BIT -—BIR; R2O-BZD). | aan 2. At the Audtist 3h, 1954, conference, the Treasury special agent asked petitioner MeCue, Jdr., about Sonne water’ well drilling serviees that had Deen performed on his personal estate but Which had been paid for by the corporation and treated by it for tax purposes as deductible expenses. The following qiestions were asked by the agent and answered by MeCue, Jr., under eath (GAA. 423): . | ~ Q. Wie negotiated to liave this well drilled at vour place / ACT haven't “any idea, not even to this day. Q. Who paid for fhe well drilling operation ? A. I don’t know. , QQ. Did vou? A. No, sir, I didn't-need it. 1 didn’t want. it. I didy’t authorize it, and knew nothing _ about. it. | . As the court below found, the falsity of these stite- tients. Whieh were the basis for Count TTL, was ‘ “amply established by the evidence (Pet. 9a): . MeCue, Jr. ordered the well drilled, examined, discussed and accepted the propesatprovided a thi tits engaged for the work, and ordered | them to undertake it. He was kept informed of the work on the well,as it proceeded and discussed its progress with drillers. He went with them to choose a spot-on his property for drilling the well. As with his father the loca- tion of the well drilling equipment, its size and 644221-—42—- 2 & ‘the noise of the operation make it impossible - that he. was unawave tliat a well was being * drilled on kis property. . The record fully supports this eapsule summary by the court of appeals (P.A. 183a-187a, 271a-27a, 278a—- 279a : GA. 72-77, 82-84, 147-151, 184-991, 397, 399-415, 417). _ C. EVIDENCE OF PETITIONER MCCUE, SRS GUILT Petitioner McCue, Sr., made the false oral state- ment to a Treasury special agent at a conference held on August 13, 1954 (G.A. 637-653). McCue, Sr, | through his- attorney; had’ volunteer dd to appear bée- fore the agents to testify, and this offer.was accepted (GA, 451). He was accompanied by his attorneys,’ was advised of his constitutional rights and stated that he understood them. (G.A, 637-638). He gave testi- mony under oath (G.A. 638). The connt as to which he was found guilty (Count TIT) -related to water wells drilled and reconditioned on. his personal estate. The evidence of his uilt may be summarized briefly as follows: - - 2 asi At the August 13, 1954, conference,, the Treasury special agerit asked McCue, Sr., about some water ‘well drilling and reeonditigning services that had been _perfgrmed on his personal estate... As in the case of his son, the services had ‘been paid for by the cor- poration, which charged the payments to ‘‘Repair— . Expenses” and took them as deductions on its income - ’ tax return. The following questions were asked by — °" = the ogent and answered by McC Ue, Sr.. under oath (Gi. A AAR): . , ~ Who negotiated to have the work’ done? = . Jack McCue [ MeCug? Sr.’s brother]. : Was he told to haye it done ? A. No, he dene-a tot of things or all things. He was at my home with people, with .cus- tomers, at meetings. T presume-he did.’ ‘ Q. You didn’t have a thing to do with it - A. Not a thing. yr These answers, the last one of which served as a basis ——for Count TLL, were. false. The eotrt of appeals suum- marizedéthe evidence establishing their falsity as fol- lows (Pet. Sa): : af il McCue, Sr had in fact / fom several oe- easions dise pa his need for More water with Downey, the purehasing agent of the Cony: my, and sometime late in 1950 61 carly in 1951, his own office and in the presence of MeCue, Jr. had instructed Downe ‘y to have wells drilled | con his property ayd’on the property oecupied * as a-home by Me@ue, Jr. Downey engaged the * se PVICeS of a company in. the business of drill- - ing wells and the.two wells were drilled. ~ Downey discussed with MeCue; Sr. certain _ diffic ultivs which were encountered in the course of driJling the welJs. The well on thé property. . | of MeCue, Sr. was. about three hundred feet _ from his house and the derrick used in drilling "it was about foyty or fifty feet high. * The drill- “ ing equipment/ makes a noise like a pile driver. * é /* a2 + * _ Jack MeQue had nothing whatever to do with the well aril or the negotiations, and the / - po / “ Th men in charge of the drilling had never even heard of him. The court’s summary is f: lly epee, by the: ree- ord (P.A: 452a-453a, 455a, 456a-460a; G.A. 455-459 463, 465, 467-470, 480-481, 486-487, 490-492, 506- 50, 510-5 nee 517, 518, 525, 562-563, 636,. 655-667). oO ' ‘ ARGUMENT 1. Petitioners claim here, as they urged in the court below, that’ in “repudiating” an alleged agreement” not to prosecute the present charges, the government — violated “minimal standards of honor and fair deal-- ing in Government prosecutorial practices” (Pet. 9) that should be enforced by this Court (Pet. 8-14).- They do not make any legal argument to the effect , that petitioner McCue, Sr.’s plea to the earlier charge (see p. 5, supra) was ‘falsely induced” so as to in- validate that conviction, but rather urge intervention by this Court as a matter, of its discretion “to exercise its supervisory powers over the adniinistration of federai criminal justice’’ (Pet. 9}- The short answer to this: request is that_ the record does not syipport the existence ‘of an agreement not to press the instant charges. Furthermore, we respectfully. urge that as a general rule—and certainly in the cireumstances disclosed by ‘this case—the enforcement of informal agreements between counsel is not a proper function of. this Court.’ * Petitioners appear to have abandoned their contentions, ' pressed vigorously in thé court of appeals, that the. instant prosecutions are barred on the theory of estoppel and because their subject matter was part of a binding statutory compro- mise entered into between defense counsel and the former ll (a) As the citations advanced in support of it readily disclose, petitioners’ statement (Pet. 5) that ““Ctlhe United States Attorney promised that, if MeCue, Sr. would plead nolo contendere to mis- demeanor charges, the indictment against McCue, Jr. would be dismissed and the charye that defendants made false statements to Special Agents of the In- ternal Revenue Service would enot be proseceuted” (emphasis supplied) is without the slightest, foun- dation.’ On the contrary, those references show that the possibility of the petitioners’ being charged with _ having made false statements to the government was never even considered ‘in. the discussions leading up to the alleged agreement. The only charges that were discussed ‘were the tax evasion charge under - Section 145(b) of the 1939 Code and its possible reduction to a misdemeanor charge under Section 145(a) or Section 3616(a) of the 1939 Code for the filing of false returns (P.A. 3la-32a, 39a); there was no discussion of a possible charge for making United States Attorney. In any event the trial court, in a lengthy opinion, pointed out many reasons why those points are without merit (P.A. 115a-134a), and the court of appeals agreed (Pet. 14a-17a)., | 24 * After correctly obsetving that “the exact confines of the agreement were never clearly defined” (Pet. 14a), the court below stated that “it may. be assumed, for our purposes, that both the United States Attorney and counsel for defendants fnderstood that the offenses which are the subject of the present prosecution were to be included in the agreed upon disposition of the matter” (¢mphasis supplied: ./4/d.). This assumption arguendo is not a finding that the agreement so provided, for the court plainly meant that in view of the grounds on which it disposed of this issue, it did not’ matter whether or not the agreement so provided. a 12 , false statements to a Treasury special a agent. in vio- lation of 18 U.S.G. 1001 (tbid.; see also G.A. 14- 15). No such chargé was then pending (B.A. 95a); . neither ‘thad the investigating agent’ recommended _ the prosecution of such a charge (G.A, 66), nor had - - the Department of Justice been requested to authorize | - such a charge (P.A. 9la). The then. United States Attorney who had made the alleged agreement with petitioners had never given **any thought’’ ( P.A. 99a) - to the possibility of bringing a charge under 18 U.S.C. 1001; ‘‘all [he] had in mind”’ in making the agree- _ ment, was “the disposal of the indictments’’ then pending (P.A.-9la), and he had not ‘intended, nor - did he Consider himself authorized, .tv. bind the . ; government a any charges not then pending” ie ‘short, pa the extent that any agre ement not to — prosecute urider 18 U.S.C. 1001 ever existed, it existed only. in the minds of petitioners’ trial counsel—who, for all the record ‘shows, had not themselves. enter- tained any thought of a possible prosecution for the making of false. staterients to the government, but who would presumably have been quite receptive. to the notion of blanket immunity for their clients from prosecution on any conceivable charges., It borders, we suggest, on an affront to the responsibility of the * The United States Attorney did state that, in making the agreement, he “never intended to bring any other charges” (P.A. 99a); however, he testified that he had never disclosed that intention to petitioners’ attorneys (ibid.). Moreover, as we have noted, that intention was arrived at without due consideration having been given to the possibility that peti- tioners should be poesecuted under 18 U.S.C. 1001. . 13 Pern. Beet mae ' then United States Attorney to allege that be would make a, Wholesale agreement not to prosecute peti- ~ tioners on chargés which neither he nor they (so far as tW® record shows) had ever considered. - Such an. agreement would be so plainly contrary to public policy as not only to be unworthy of enforcement but "as to raise serious questions as to the good faith of the partie s entering inte it. Nor is it reasonable to suppose that even the broad- ‘est sort of agreement not to proseeute further any matters arising out of the filing of petitionérs’ tax” returns would embrace the prosecution of charges under 18 U.S.C. 1001. That statute is wholly’ distinct from the tax statutes and serves an entirely different governmental purpose. While the criminal tax laws, such as Sections 145(a), 145(b) and 3616(a) of the 1939 Code, supra, ave designed to protect the federal revenue, 18 U:S.C, 1001 is designed to enforce every citizen's obligation to deal truthfully with his govem- ment in all matters within its proper jurisdiction., So diverse are these.two classes of enactments that an agrecinent to refrain from’ prosecuting. urider ) one of them could not. properly be considered as embracing ‘the other’ where such a broad purpose had ‘not been spelled out with the most unequivocal spec- ificity. Especially is this so where, as here, the prose- cutions under the two sets of statutes involve wholly separate, transactions. The 1957 prosecution under Seetion 145 of the Internal Revenue Code of 1939 was, for attempts, carfied out in 1951 and 1942, to evade and defeat income taxes for the years-1950 and 1951 by filing false and fraudulent income tax returns ( P.A. ‘ oe / “\14a-17a) ; the 19 09 prosec ution under 18 U.S. C. 1001 was for making false oral statements under oath in 1954 to a duly authorized representative of the govern-_ _ ment acting in a matter within the jurisdiction of his -agency.. Plainly enough, the fact, that. the latter . offense oc courted in the course of the. investigation of the former does not create the identity hetw een the two upon which petitioners basé their argument. . (b) Petitioners’ efforts retrospectively to transform what was at most a simple agreement not to press any pending tax evasion charges into a wholesale ah- dication of the prosecutor’s responsibilities suggests what is perhaps the most compelling reason for the Court’s not entertaining this issue; namely, that such agreements are, not ordinarily ‘susceptible of effective, judicial enforcement. Agreements between counsel ~ for the parties toa law suit, whether in a civil pro- ceeding or between prosecution and defense, are nor- mally inforthal. They are not usually, reduced to writ- ing or made a matter of record: indeed, as was the * ease here (G.A. 12-13), the court is often not even informed of the existence of an agreement, let alone of its terms, for the parties to such an agreement do not contemplate. that it will ever be judicially enforced gr in any way be binding on any court. As the trial court..discovered: in unsuccessfully attempt- ing to make an accurate reconstruction of this agree- ment, the parties’ recollections of such informal trans- actions soon fade and, consciously or unconsciously, eften tend to reflect what they later wish the agree- ment had provided (see, e.g. G.A. 34-35). Such. vague and often hiased retrospect prov ides no proper *, : : 15 basis for judicial action. The execution of most such agreements must very largely de pend, as it has always depended, upon the parties’ conte miporary under- standing and knowledge of. its. terms and purposes and upon the confide nee of each in the: good faith of the other. ©. | Moreover, there. are many considerations bearing Upon Whether, or the extent to which, an informial agreement between counsel should be given. effect. that can be adequately appreciated and acted upon ~, only by the. parties themselves. There may, for ex- ample, be a critical change in the. cireumstances to : which the agreement relates.. Or one or the other of _ the parties aay have failed to make a full disclosure of the relevant facts. By. the same token, it would seem that the fact that, in this ease, the then United States Attorney acted not only without. the authority of the Departnient-of. Justice in. making the alleged agreement but directly contrary to its instructions (see pp. 4-9, supra) would have some -relevance in deternuning how generously the alleged agreement ought fe be construed and in what way any douwbts should he resolved. Each of thesg consider ‘ations must be weighed by each party in relation to the terms and purposes of the agreement ‘in question and to his own professional and personal éonscience. None of thém. ean be: properly exyaluated in its full context by a court far removed from the circumstane es that gave ; rise cay the agreement. . Petitioners also argue (Pet. 13-14) that tiaie voilicteala for tax exasion and their subsequent indict- _ment on-the present false statement charges consti- 16 « ‘tuted “multiple prosecutions” such as to raise ‘‘seri- ‘ous questions for the administration of federal eruminal justice.”’ be Petitioners do not argue, nor could they argue, that there was any legal bar to the present. prosecution; no question, for example, of double jeopardy is involved. “What they do contend is that the general policy of the Attorney General, cnunciated in the government’s Motion to Vaeate the Judgment and Dismiss the Indictment (p. 3) in Petite v. United States, 361 U.S. 529, 530, that **several of- *+* & *& fenses arising out of a single transaction ‘ should not be made the basis of multiple prosecutions” ought to be enforegg—indecd, judicially enforeed—in this case. | We note at the outset that the two prosecutions involved here—one based on the filing of fraudulent - _ tax returns in 1951 and 1952, the other. based.on false oral statements made in 1954—in no sense arose “*out of a sirigle transaction”’ (see pp. 13-14, supra). More importantly, however, the enforcement of such policies - as this, as well as the ultimate exercise of that broad power of judgment known as the “prosecutor’s dis-~ cretion,” have always heen thought properly to reside ~~ in the Attorney General. Petitioners have suggested no sound reason for transferring that administrative function to this or any other court. Nor does the manner in which executive discretion was exercised in this case suggest any occasion for judicial concern. The prosecution of petitioners and the arguments made on appeal in support of these convictions were , authorized, reviewed and re-reviewed at the highest levels of the Department of Justice. While the fraud attempted to be perpetrated upon the government by m aa 17 petitioners’ false oral statements plainly called tor vigorous prosecution, the fact that petitioners had previously been prosecuted for. tax’ evasion on not wholly unrelated facts was, of course, a matter to be takep into acceunt. ° But no less relevant was the consideration that’ one petitioner (McCue, Sr.) had at that time been convicted of only a misdemeanor and the other ‘had cotten off scot free—both in cir- cumstances Where the Department's otherwise in- variable policy has been to press for a felony convie- tiun (see G.A. 25-26; Balter, Fraud Under Federal Tar Law (2d ¢d.), p. 140). The executive determina- tion was neither hightly nor carelessly made, nor, we submit, Was it inequitable. We suggest that, on the ‘contrary, a failure to prosecute might well have been viewed as a gross discrimination in favor of the wealthy and influential. - 3. Petitioners contend (Pet, 15-25) that Section 1001 of the Criminal Code does not apply to the false, ‘statements they made to the Treasury special agent because (a) in their view, the false Statements did not pervert the functioning of government. offices, (b) the statements weré made in response to questions put by a criminal investigator, and (c) the statements. were oral. None of these arguments has’ merit.’ * Petitioners’ argument as’ ‘o the severity of the punishment permissible’ under 18 U.S.C. 1001 (Pet. 17) was answered by this Court 20 years ago when. it stated (United Ntates vy. Gilli- land, 312 U.S. 86, 95): “The matter of penalties lay within the _ discretion of Congress. Section [1001] covered a variety of offenses and the penalties prescribed were maximum penalties which gave a range for judicial gemtences according to the circumstances and gravity of parficular violations.” * 18 (a) Petitioners repeatedly (Pet. 16; 17, 18) urge that their conviction cannot stand because their false . Statements’ did not ‘sueceed. in perverting the fune- “tioning of.a government office: But it is settled that the existence of an offense under 18 U.S.C. 1001 does not depend upon the false statement’s having _ sueceeded jn its fraudulent purpose. United Stites Vv. Gilltiand, 312 US. 86, 933° Butzman ve United States, 205 F. 2d 3483 (CLAL 6), certiorari denied, 346 U.S. 828: De Roster v. United States, 218 F.2d 420, 423 (CLA. 5) : United States v. A pew Distributing Co, 148 F. Supp. 365, 371 (DRL): United States v. Quirk, 167 F. Supp. 462, 464.(¢6,D. Pa.), affirmed per ‘curiam, 266 F.2d 26 (C.AL 3). Moréover; peti- tioners’ conduct here .(see pp. 5-10, spray was - plainly caleulated to pervert the functioning of ‘the Internal Revenue Service—i.v., deceptively to induce "misdirected administrative action by persuading the Treasury agents that the investrgations weninst both petitioners and their corporation sheuld be wonnd up without criminal or civil sanctions, and with as, small a‘tax deficiency assessment as possible. The fact that the effort failed is of no consequence so far as 18 U.S.C. 1001 is coneerned. (b) Equally. without merit is petitioners’ broad “argument (Pet. 17-20) that the statute was not. in- tended to apply to any false statements’ made te criminal investigators.” The statute contains no such’ ‘Tt shonld be recalled (see note 2. p. bosivvrr) that the false statements here were made not only to the special agent but also to the Internal Reverrne agent who was, present and who was in charge of the civil aspeets of petitioners’ tax cases. See Knowles v. United States, 224 F.2d 168 (CLA. 10), sp e 1Y | - limitation, and the appellate cases are to the con- trary. Brandow, v. United States, 268 F. 2d 559 (C.A. 9); United States v. Silver, 935. F.2d 375, 377 (C.A. 2); Cooper v. United States, 282 F. 2d 527, 530 (C.A. 9); Cohen v. United States, 201 Fy 2d 386, 392 (CLA. 9), certiorari denied, 345 US. 951." This Court has said that 18 U.S.C. 1001 should be con- strued ‘‘according to its literal and natural import” (United States v. Gilliland, 312 U.S. 86, 90-91) and that Congress had made ele ar its purpose (312 U.S. at 93) 7 to protect the authorized functions of govern- mental departments and agencies from the per- version Which might result-from the deceptive - practices deseribed. We see no reason why this apparent intention should be frustrated by construction. a es See also United States v..Bramblett, 348 U.S. 503, - 09-10, We submit that te-constre48-ES.C- 100b as not applying to duly. authorized representatives of government departments.conducting ‘investigations upon substantive matters within the jurisdiction of the same departments, because a eviminal prosecut lon Was foreseeable, would plainly frustrate the intention Petitioners rely (Pet. 18-19) of three district court cases— two of them from the Second Circuit and only one ‘of’ whieh, United States ve Philippe. V3 F. Supp. 582 (S.D.N.Y.), in- volved a Treasury special. agent. The rationale of Ph/Jippe was that false statements to a special agent “are hardly caleu- ——tted-to, and cannot ‘possibly pervert the authorized functions of a Special Agent” (173 F. Supp. at 584). As we have shown (see p. 1S, supra), this is an erroneous assumption, and the Second Circuit in the case at bar expressly overruled the _ Philippe case (Pet. 13a). 20 : of Congress to protect: the authorized functions of ° the government.” (c) The third part of petitioners’ argument that Section 1001 does not apply to their case is that it -Was a to cover only written statements (Pet. 25). The argument is without foundation, | ig ma of the statute is clear and comprehensive ; * as this Court pointed out in United States v. Beacon Brass Co.; 344 U.S. 43, 46,°“no distinction is made in [Section 1001] between written and oral state- ments,” and the courts of appeals have uniformly held that the statute does apply to oral statements. United States v. Meyer, 140 F. 2d 652, 655 (CA. 2); United States v. Zavala, 139 F. 2d 830 (CA. 2) ; Marzani v. United States, 168 F. 2d 133 {C.A.D.C.), affirmed by equally divided Court, 335 U.S. 895; Knowles v. United States, 224 F. 2d 168 (C.A. 19); ef. Smith v United States, 257 F. 2d 133 (CA. 10); Cooper v. United States, 202 F, 2d 527 (CLA. %). Petitioners recite at length the legislative history, of a bill that — never beeame law (Pet. 20-24), but all they are able oor < : F . ° a " Petitionérs express the “hope” (Pet. 1s) that “| w le have * * * come too far along the road in-the development of our national traditions to entertain any notion that a citizen owes an allegiance of fidelity to an individual Government criminal investiga tor’. We suggest that, on the contrary, it is a mark of the high development of our national traditiotis that we, reeog- nize the citizen's “allegiazce of. fidelity” to his government, whether he deals with that government through “an individual Government” administrator, “aw individual) Government” judge or “an individual Govermnert criminal investigator.” “2 1t is’ hoteworthy that the statate deals with both “false, fictitious or fraudulent statemer: is or representations” aad “any false writing or document.” indic ‘ating a clear infention to comprehend something broader than mere writingssor documents. 21 to say (and, indeed, all that can be said in support of their position) about the bill that produced Section 1001 in its present form is that “there is not a soli- tary suggestion” in the legislative background that the statute was to apply to oral statements (Pet. 25). AS was said aheut a comparable attack on this statute shortly after it was enacted, **such uncertain and at hest negative evidence of legislative purpose cannot serve to limit the clear statement-of the new statute.” United States v. Goldsmith, 108 &. 2d 917, 9 «A ‘A. 2}, certioriri a 309 US. 678.) ef. Browder v. Unit: d States, 312 U.S. 335, 338." } : 4. The contention ger 2 20y, that the govern ment committed reversible error in failing to have certain grand jury testimony recorded is without © Potitionen alee stgrgeest ‘Pet, 17) that the “twee Wit ness” rile applicable to perjury prosecutions shonkd have been saris fied in the present. case and was not. This Wa argued for the first time im ihe court below, ne sueli point having been- raised in the distriet court. In Wesler 0. Vinited Soaten, 425 TS. 606. rehed upon by -petitioners (Pet iT). 9 perjury conviction Was reversed for the trial conrt’< failure to give a rejuested instruction relating to the “two-witness” rule | In the case at bar the petitioners hot only failed’ to reg cost uch an onstruction but requested inconsistent instructions. @uder which verdicts of wilt could be based on cirenmstantial evi dence (GA. S67, 368, 650-651). Moreover. the “two Witness” rule does not apply to prosecutions under Section iw, Vnited - States v¥. Aitiian, 246 ¥F. 2d 7 Gé- 82 (CA. 90: Fisher vw. Vnitid com States, 254 F. 2d wm (CPR, 9), Josininast denied, 358 10S 895: Todorow v. United States, WS FF. 2k 430 (CLAY 9). certiorari denied, 337 US. 925: Traris ¥. Vnited States, 269 F. 2d 828 (CLA. 10). reversed on other grounds, 34 TS G51. Finaily, the proof in the instant case was so -frong that the “twe witness” rule was satisfied (se pp. 2 Wa saprere com pare Thanmer sv. Vonited States, 271 ULS. 620, 625: honited Sah v. Wood, 14 Pet. $508, 4455) 22 merit. It is true, of course, that there are occasions when a trial court may in its diseretionjordertrand - jury testimony produced for a defendant's use in the cross-exammination of government witnesses, Pifts- burgh Plate Glass Co. v. United States, 40 U.S, 395, _ 400, but there is no rule that we are aware of requir- ing the’ recording of such testimony. Petitioners’ main ‘complaint is that the testimony of the special agent was not recorded. However, there was no heed to record such. testimony, for at both trials the govern- ment turned over to the cgurt a largesnumber of reports and memoranda "ae by the agent, after which a large part of this material (ineluding some of the exhibits to. the reports) was turned over to the defense for use in cross-examining the agent (GA. 61, 443-445). “These reports and memoranda adequately took the place of a transertpt vf the agent's _ testimony, for there obviously would be no reason for him to give testimony before the grand jury in conflict. with his prior reports and- memoranda and his later testimony at the trial. : ». Equally lacking in merit is the contention (Pet. 98-30): that -the Treasury’ agent's questions to. pett- tioner McCue, Sr, were too vague. > The argument. >is that when he. answered, “Not a thing,” to the ques- tion, “You. didi?’t have a thing to do with it?” (see pp. 8-9 supra), all he meant was that he did not personally negotiate. with the well-drdling firm ‘to have the well drilled. The ‘point was faised at the © trial, and the jury was instructed in minute detail “- _ tiorari should be denied, ° r 23 as to what it would have to find in order to conviet™* This submission was proper, for the jury had to ¢on- “sider the context in. which the ene Was asked. Conrad x. United States, 255 F. 2d 247 (CLA, Seymour \. United States, TT BF. 2d S77, 584 Ok 8): Young v. United. States, 214 F, 2d 232 -(C.A. D.C). _ CONCLUSION For the reasons stated. the petifion fer a writ-of cer- . Respectfully submitted, ‘ ARCHIBALD Crix, Solicitor General, Aoun DB. Jonte, dr. Acting Assistant Attorney General, ; J: Witte Doone, . Assistant to th: Soliciter General, Ricnanp b. peng sacha ara od Attorney, Taternal Reroute Se rvicc, Washington 25, D.C. JUNE 1962: - . **To summarize: In order to convict on this third count of the ‘indictment, you must find the pronoun ‘it’ in the question refers to having the ry: done: that thesdefendant fully an- derstood that the word ‘it’, as used—by the questioner, re ‘ferred to having the work ye poet the defendant in his answer did ‘not intend to indicate only. that he had nothing to do with the negotiations for or the actual performance of the well drilling and reconditioning services, and that the defendant did intend falsely to say that he had net told Dowzey to have well drilling and reconditioning services performed on McCue, Sr.’s, private estate” (PLA. 5338). * © GOWER NET NT PR RTING OFFICE segs nu --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385601_0353%3A3. Public record. Not legal advice.