Petition for a Writ of Certiorari — Keane v. United States

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Re IE CLON SAEVIIOE” BOO OPER BIS

No. 75-867 *

In the

Supreme Court of the United States

Octosper Term, 1975

THOMAS E. KEANE,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

JEROME H. TORSHEN

11 South LaSalle Street

Chicago, Illinois 60603

312-372-9282

JOHN POWERS CROWLEY

53 West Jackson Blvd.

Chicago, Illinois 60604

Attorneys for Petitioner

SHERMAN C. MAGIDSON

MARIA A. SKIRNICK

EDWARD G. WIERZBICKI

On the Brief

UNITED STATES LAW PRINTING CO., CHICAGO, ILLINOIS 60618 (312) 525-6581

ere REQSY,

PEPE AES I ULAR eG ARR SET RY ERA RE Se

RaIlIirern THD HAicrwu

INDEX

PAGE

RINE. TIOIUE can concss convinces vieceiscadichamiionteidasnaniioanniaunaaiel 1

PPIs scshcccninssaisccscemsininiies-steseoaienadebletilaelcadalcaicesinaliedintaatiatta 2

OID: Sr IIIIO saicicstsnincctandcnassenenachisesbadaaaineninleinapaaiciesinhiaas 2

Constitutional and Statutory Provisions Involved ... 3

EE. TR SO circeiitiaccncicqesonticnntnnsitiannibonninsinninci +

Alleged Use of Undue Influence .....0..0000000000000.... 8

Alleged Use of Advance Information .................... 1l

Alleged Deprivation of Faithful Service ~............ 13

Reasons for Granting the Writ -.................... eee 16

Il. The Decision Below Creates Confusion Con-

cerning, and Disregards Constitutional Re-

quirements Involved in, the Interrelationship

of the Confrontation Clause and the Busi-

ness Records Exception to the Hearsay Rule 16

ll. The Decision Below Conflicts with the Stan-

dard of Review Required in Criminal Cases 23

Ill. The Prosecution Here Intrudes on Areas of

Peeuliarly Local Concern. Approval Will

Permit Greatly Expanded Federal Oversight

and Control of Loeal Affairs .........000000000 0. 24

RII: 1... cs dente citnbacsncndeiacenahins here dllesiabaiadecbeabansgennooneneien 28

Appendix;

A.—Opinion of the Court of Appeals for the

I STII ectierercerinsencecinecttiitecsenennstinian App. 1

B.—Order Denying Petition for Rehearing,

SII “Uy MA thinncntssasniecshemacsonsinniccieeascnaedes App. 53

eth.

Rs

ii

AUTHORITIES CITED

Cases

PAGE

Berger v. United States, 295 U.S. 78 (1934) 200... 22

Brady v. Maryland, 373 U.S. 83 (1963) 2. 23

California v. Green, 399 U.S. 149 (1970)... 16

City of Chicago v. Fielderest Dairies, Ine., 316 U.S.

BIN llc pcievcicctnroneerianensernmioninninrpncrencetises 25

City of Park Ridge v. Hollis, 35 Ill.2d 489 (1966) ...... 15

Dutton v. Evans, 400 U.S. 74 (1970) -0.02 ee... 16

Garner v. Louisiana, 368 U.S. 157 (1961) -200000... 2... 24

Glasser v. United States, 315 U.S. 60 (1942) 200. 24

Hanley v. United States, 416 F.2d 1160 (Sth Cir. 1969) 19

Harris County Commissioners Court v. Moore, 420

See CINE erentinnaddnipertnmnpnnnianennchecasinsinsensensine 25

Hoag v. New Jersey, 356 U.S. 464 (1958) -.222 2... 25

Kay v. United States, 255 F.2d 476 (4th Cir. 1958) ... 19

Mancusi v. Stubbs, 408 U.S. 204 (1972) ...00 2. 16-17

Mattox v. United States, 156 U.S. 237 (1895) 0... 16

MeDaniel v. United States, 348 F.2d 785 (Sth Cir.

Rs seseptcbeedietges tars ictnlide nnenpadeielinAinnieh<terndnrnenchnintiiiviinnens 19

McNeese v. Board of Education, 373 U.S. 668 (1963) 25

People v. Drobnick, 1 Ill.2d 456 (1963) 00... 15

Phillips v. Neil, 452 F.2d 337 (6th Cir. 1971) ............ 19, 20

Rewis v. United States, 401 U.S. 808 (1971) 20022... 28

iii

PAGE

Rutkin v. United States, 343 U.S. 130 | 27

Screws v. United States, 325 U.S. 91 | ERR eae 27

Thompson vy. City of Louisville, 362 U.S. 199 (1960) 24

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

United States v. Bass, 404 U.S. 336 (1971) oo. 28

United States v. Beasley, 513 F.2d 309 (oth Cir, 1975) 19

United States v. Burruss, 418 F.2d 677 (4th Cir. 1969) 19

United States v. Johns-Manville Corp., 225 F.Supp.

We NS ME shionitcinnlanm etic ue 19

United States v. Joyce, 499 F.2d 9 (7th Cir.), cert. de-

nied, 419 U.S. 1031 SpE ON Ec ee ae 8

United States v. Leathers, 1385 F.2d 507 (2d Cir. 1943) 18

United States v. Nixon, 418 U.S. 683 I cane 21

United States v. Parker, 491 F.2d 517 (Sth Cir. 1973) 19

Warren v. United States, 447 F.2d 259 (9th Cir. 1971) 19

Other Authorities

Advisory Committee’s Introductory Note on the Hear-

say Problem (reprinted in 4 Weinstein’s Evidence

ce titeace orpag, Go NOT ORS a . 18

Beard and Horn, Congressional Ethies, The View

from the House, 42-45 (Brookings, A 25

Confrontation and the Hearsay Rule, 75 Yale L. Jour.

PI Side a 22

Friendly, Federal Jurisdiction: A General View, 58

DO aiencen iceicietistisdenlallani aaah snasighiincs unbee ok. 27

ae

iv

PAGE

Jackson, Journal of the American Judicature Society,

Vol. 24, No. 1, June, 1940, p. 20-2... eeeseeeseseeeeseeeeeees 27

Jackson, The Supreme Court in the American System

of Government, 70 (Harper Torchbooks, 1963)

iene 27

Jennings, Preserving the Right to Confrontation—A

New Approach to Hearsay Evidence in Criminal

Trials, 113 U. of Pa. L. Rev. 741 (1965) ..............-. 17, 21

McCormick, Evidence, $252 at p. 607 (2d Ed. 1972) .... 22

4 Weinstein’s Eividlemoe ............--..-...ce.c.ssecceescosenesneeseeees 18, 21

In the

Supreme Court of the United States

Ocroner TERM, 1975

No.

THOMAS E. KEANE,

Petitioner,

VS.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioner, Thomas E. Keane, respectfully prays that

a Writ of Certiorari issue to review the judgment and

opinion of the United States Court of Appeals for the

Seventh Cireuit entered in this proceeding on August 18,

1975.

OPINION BELOW

The opinion of the Court of Appeals, reported in 522

F.2d 534, appears in the Appendix hereto. No opinion was

rendered by the District Court for the Northern District

of Illinois, Eastern Division.

cn

2

JURISDICTION

The judgment of the Court of Appeals for the Seventh

Cireuit was entered on August 18, 1975. A timely petition

for rehearing with suggestions for rehearing en banc was

denied on October 20, 1975. On application duly made,

the time for filing a petition for a writ of certiorari was

extended to December 19, 1975. This petition has been

timely filed. This Court’s jurisdiction is invoked under

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

QUESTIONS PRESENTED

1. Whether a defendant's Fifth and Sixth Amendment

rights of due process, confrontation and cross-examination

are Violated by the extensive use of a ‘*business record”’

containing multiple hearsay conversations when the pur-

ported declarants are available but not called by the gov-

ernment, and where the content of the hearsay conversa-

tions furnish the only evidetiary support for a vital and

pervasive element of the gov. »ment’s proof?

2. Whether the elevation in this case of vague state

standards of ethical conduct to fluid standards of criminal

conduct under the Mail Fraud Act deprived petitioner of

dve process of law?

3. Whether the prosecution in this case, especially in

view of its reliance on state ethical standards, encourages

intrusion into delicate areas of a state’s administration of

purely local procedures and shifts massively the authority

given the federal government over local affairs?

4. Whether, in considering the various aspects of the

alleged scheme, the court below, in sustaining the convie-

tion, ignored the test that, even on appeal, there must be

‘*substantial evidence’’ to sustain a conviction in a criminal

case?

A.

3

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Amendment V.

The Fifth Amendment to the Constitution of the United

States provides, in pertinent part:

‘*No person... shall be deprived of life, liberty,

or property, without due process of law; ...”?

Amendment VI.

The Sixth Amendment to the Constitution of the United

States provides, in pertinent part:

‘In all criminal prosecutions, the accused shall en-

Joy the right... to be confronted with the witnesses

against him; ...”’

United States Code, Title 28, §1732. Record made in

regular course of business.

‘““(a) In any court of the United States and in any

court established by Act of Congress, any writing or

record, whether in the form of an entry in a book or

otherwise, made as a memorandum or record of any

act, transaction, occurrence, or event, shall be admissi-

ble as evidence of such act, transaction, occurrence, or

event, if made in regular course of any business, and

if it was the regular course of such business to make

such memorandum or record at the time of such act,

transaction, occurrence, or event or within a reason-

able time thereafter... 2’

United States Code, Title 28: Federal Rule of Evi-

dence, §803-—Hearsay Exceptions—Availability of De-

clarant Immaterial.

(6) Records of regularly conducted activity. A

memorandum . .. made at or near the time by, or

from information transmitted by, a person with knowl-

i

4

edge, if kept in the course of a regularly conducted

business activity, and if it was the regular practice

of that business activity to make the memorandum,

.. all as shown by the testimony of the custodian or

other qualified witness, unless the source of informa-

tion or the method or circumstances of preparation in-

dicate lack of trustworthiness. .. .”’

STATEMENT OF THE CASE

Petitioner, a lawyer since 1932, was, from 1945, an

elected alderman of the City of Chicago and Chairman of

its Council’s Finance Committee.

In 1965, petitioner, with two others (Hennessey, Sr., a

longtime specialist and investor in delinquent special as-

sessment bonds, and Schwartz, a lawyer-real estate in-

vestor), formed a partnership (‘‘Alpine’’) to purchase long

tax delinquent, vacant real property at a county scavenger

sale to be held pursuant to Illinois statute. The City of

Chieago was in no way involved except to the extent that

it, and other taxing bodies, might receive an aliquot share

of the total amount of tax revenues collected by the

County.

Certain realty was acquired by Alpine, through Hen-

nessey, Sr. and its employees, at the scavenger sale. (The

legitimacy of the scavenger sale, its procedures and the

prices paid by Alpine have never been questioned.) Alpine’s

acquisitions were financed by legitimate bank loans. Deeds

were ultimately obtained through statutory judicial pro-

ceedings for those properties which were not redeemed by

the titleholders by statutory redemption. The properties

were held either in the name of a nominee or placed in

land trusts. Special assessment liens (which were in no

1 Purchase in the name of a nominee was common at the scavenger

sale. (T. 703, 1074) A land trust is a recognized and common de-

vice for holding title in Illinois when multiple interests are involved

and property is used for business purposes. (T. 2923)

a tc als ch

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5

way involved in the scavenger sale) were cleared.?

These properties were then offered for sale by Alpine.

Some were sold to private parties in arm’s length transac-

tions. Others were acquired by certain governmental

bodies by condemnation or other procedures in which the

acquisition prices were based upon independent, federal or

other governmental appraisals concerning which no ques-

tions have been raised.

In 1974, nine years after Alpine was formed, petitioner

was indicted for conspiracy and mail fraud in connection

with the above transactions. The first 20 counts of the in-

dictment charged that petitioner, Hennessey, Sr. and Hen-

nessey’s son (‘‘Junior’’), an employee of Alpine, devised

a scheme to defraud the City of Chicago, its citizens and

aldermen, of their right to petitioner’s loyal, faithful, dis-

interested and unbiased services and actions in the per-

formance of his ofiicial duties, and of their right to have

the City’s business and affairs conducted honestly, im-

partially and free from corruption, fraud, undue influ-

ence and conflict of interest ‘‘in accordance with the

laws of the State of Illinois and the City of Chicago ...’’

(R. 8, p. +) A twenty-first count charged conspiracy to

commit this fraud. Hennessey and Junior were named as

Special assessments are not taxes. They are, by law, a means of

financing local improvements which benefit property without resort-

ing to the City’s taxing power, funds or credit. Bonds are issued to

the contractor making the improvement. The City acts as a fiscal

agent, collecting the assessment from the private property owner and

making payment to the bondholder, generally an assignee of the con-

tractor or a subsequent purchaser. The bondholder has no recourse

against the City, but may attempt to recover balances due by an

action against the property.

—

6

unindicted co-schemers and co-conspirators; the third

partner, Schwartz, was not charged at all.

Ultimately, petitioner’s conviction on fourteen counts of

mail fraud and one of conspiracy was affirmed.’ Petitioner

was sentenced to five years imprisonment and fined $27,000

and costs.

Pera Me kETE Pee lhte:

Although the prosecution was based upon state conflict-

of-interest statutes, which were recited to the jury in the

reading of the indictment, in the government’s opening

statement, as evidence, in the government’s closing argu-

ment, and, finally, in the court’s instructions, the Court

of Appeals did not affirm on the ground that petitioner had

committed specific violations of state law. Instead, stating

that ‘‘the [mail fraud] |l]aw puts its imprimatur on...

accepted moral standards and condemns conduct which fails

to match the ‘reflections of moral uprightness, of funda-

mental honesty, fair play and right dealing in the general

and business life of members of society,’ ’? Appendix p. 16,

infra, the court held that there were three aspects of the

scheme upon which the mail fraud convictions under vari-

ous counts could be predicated:

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pa R EPS HO

1. The exertion of undue influence on Charles Swibel,

Executive Director of the Chicago Housing Authority

(**C.H.A.’’), an independent governmental agency, ‘‘with

respect to the sale and attempted sale of certain properties

to [Chicago Dwellings Association (‘‘C.D.A.’’), a not-

for-profit corporation]’’.* Appendix, pp. 29-30, infra.

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3 Three counts were withdrawn during trial. Conviction on three

others was reversed.

;

‘

*The Court found that “the evidence was insufficient to justify

the conclusion that undue influence was used” in connection with

sales to another independent agency. Appendix p. 30, infra.

7

2. The use of advance information ‘with respect to

the acquisition {at the scavenger sale] of a significant

number of parcels in the 87th and Mackinaw area”’. (Ap-

pendix, p. 18, infra.

3. Participation, without disclosure of interest, in City

Council proceedings in connection with the clearance of

special assessment liens on certain of the properties.

The mailings involved did not pertain directly to exer-

tion of undue influence, use of advance information or

participation in City Council procedures, but rather to

financing of the original ven.ure, maintenance of land

trusts and disposition of properties. Four of the mailings

(Counts 8, 14, 15 and 20) concerned a single legitimate

arm’s-length sale of five lots to United States Steel. The

Count 2 mailing was an offer by the City, under threat of

condemnation, to purchase a lot. The lots to which these

five letters pertained were among those found to be ac-

quired by Alpine ‘‘pursuant to advance information about

the Sith and Mackinaw development project.’? Appendix,

p. 32, infra.

Three mailings (Counts 6, 19 and 4) concerned the dis-

position of property to private parties, or to an independent

governmental body. Some of these properties had been

the subject of City Council action. Appendix, p. 32, infra.

Count 12 was based on a mailing pertaining to the ae-

quisition of property by C.D.A. which allegedly ‘‘was at-

tributable to’’ petitioner’s ‘‘use of undue influence on Swi-

bel.’ Appendix, p. 32, infra.

Count 3 was based on a mailing related to the repayment

of a bank loan used to finance the acquisitions by Alpine.

8

Four mailings (Counts 7, 10, 16 and 17) were corre-

spondence with land trustees.* Appendix, pp. 34, 35, infra.

Although the Court of Appeals classified the alleged

scheme into various components and attributed conviction

on specified counts to particular aspects of the scheme, no

such classification was made for the jury. The jury was

not requested to discriminate among counts nor to judge

the scheme in this manner. The jury was presented with

all the mailings and all the evidence in a confused and un-

differentiated mass.

In these circumstances, in which the various aspects of

the alleged scheme were so interrelated by the prosecu-

tion, if any one aspect falls, the others, too, must fall.

We relate here only those portions of the record con-

cerning the ‘‘aspects of the scheme’’ underpinning the

conviction and necessary to an understanding of the ques-

tions presented.

Alleged Use of Undue Influence

All of the evidence concerning the charge of undue in-

fluence may be summarized as follows:

According to Hennessey, petitioner telephoned Swibel

and said, ‘‘Charlie, this is Tom Keane. John Hennes-

sey and I own some lots. We would like to have you buy

some of them.’’ (T. 494, Appendix, p. 10, infra.)

5As regards Counts 16 and 17, the Court of Appeals stated that

these were letters from a bank’s trust department in response to Hen-

nessey’s request for an accounting, thus making the facts appear sim-

ilar to those in United States v. Joyce, 499 F.2d 9, 18 (7th Cir.),

cert. denied, 419 U.S. 1031 (1974), wherein defendant requested

an accounting from the bank to enable him to keep his records

straight. The letters here were from the bank to Hennessey, with-

out initiation by Hennessey, requesting that Hennessey check his

records so that the bank could verify its own records. (T. 1088)

EPEAT SS SRR PIO NGL IRS RRs es Tea ’ a |

BLEED THROUGH

9

Hennessey, at petitioner’s direction, then went to Swi-

bel’s office. (T. 495). (Petitioner affirmatively denied both

the alleged conversation and the direction to Hennessey).

Hennessey testified that he had a two minute conversa-

tion with Swibel, during which Hennessey stood while

Swibel sat. Hennessey identified himself and stated that

petitioner had sent him to sell lots. Swibel was ‘very

eurt.’’ Hennessey didn’t remember what was said but

‘‘walked out... with a bad taste in [his] mouth, that

[he] wasn’t welcome.’’ (T. 496, 766-7).

Independently of the above alleged events, Broderick, a

C.D.A. attorney, contacted all county-scavenger-sale pur-

chasers he could find who might have property for sale for

use in C.D.A.’s programs. Hennessey was one of those con-

tacted by Broderick. Subsequently, Hennessey gave

Broderick a list of available property. Broderick there-

after wrote a letter to Robert A. Snow, director of land

acquisition of the C.H.A. (I. 1460). In pertinent part,

the letter read:

‘““Dear Bob:

Pursuant to Mr. Bach’s instructions, I am hereby

requesting you to acquire | petitioner’s] parcels: [par-

cels and price omitted].

Mr. Bach [executive director of C.D.A.] informed

me that Mr. Swibel told him to purchase these lots as

swiftly as possible and we would use them for the

second phase of the Pre-Fab Program.’’ (Emphasis

added).

Upon Broderick’s mere identification, the above docu-

ment was admitted as a business record without limitation.

No one was produced by the government to testify to

either of the alleged conversations related therein. Bach

10

and Swibel, both of whom were apparently available and

had testified before the Grand Jury, but whose testimony

was not furnished at any time to petitioner, were not

called. No other evidence was introduced on the charge of

undue influence.

In closing argument, the government argued that the

Broderick letter proved that petitioner actually influenced

Swibel, who thereafter successfully coerced Bach, who,

in turn, instructed Broderick to request Snow to pur-

chase Alpine lots.° Government counsel, after referring

to the alleged Hennessey-Swibel conversation and petition-

er’s ‘‘clout’’, displayed a blow-up of the letter and argued,

inter alia (T. 3270-3273) :

‘‘Tt is the summer of 1968. Gerald Broderick was

working for the Chicago Dwellings Association,

writes a letter to Robert Snow, the Director of Land

Acquisitions of the Chicago Housing Authority, and

he says:

‘¢*Bock’ [sic]—who is his boss at the Chicago

Dwellings Association, ‘. . . informed me that Swibel

told him to purchase these lots as quickly as possible

as we can use them for the second phase of the pre-

fab program.’

‘‘Ladies and gentlemen, reasonable inference tying

this up with the meeting of Charlie Swibel, Charlie

Swibel at the bidding of Tom Keane is putting the

arm on the Chicago Dwellings Association here to

purchase some lots from John A. Hennessey.

* & a

‘‘So what happens, ladies and gentlemen? The Chi-

cago Dwellings Association, as a result of the undue

influences exerted by Alderman Thomas Keane on

Charlie Swibel, purchases these lots * * *”’

® There is no evidence that Swibel was Bach’s superior or that

there was a chain of command from Swibel to Bach to Broderick.

=? ewe wee ee eee ees

11

The government further argued to the jury that it was

relying on the letter instead of calling Swibel to testify

because Swibel was unreliable. The government stated:

“*. .. do you think that we were going to call Mr.

Swibel?) We have people and we have documents

which are a lot more reliable than calling in somebody

who is in Mr. Swibel’s position. Let them eall him.’

(T. 3378).

The charge of *‘undue influence’? permeated the entire

case and was used to buttress all of the government’s evi-

dence. In closing argument, the government made, inter

alia, the following references to petitioner’s alleged influ-

ence:

‘*... he is one of the most powerful people in the City

Council . . .’’ (T. 3270); he has ‘‘elout’’ (T. 3270);

‘*. .. When you are dealing with a man as powerful

as Tom Keane. . .’’ (T. 3277); ‘*. .. when you need

a little pressure, you bring Tom Keane in.”’ (T. 3279) ;

**... but Mr. Keane is somebody special. Mr. Keane

is somebody powerful . . .”’ (T. 3356); Mr. Keane is

a ‘‘very powerful man—’’ (T. 3373); Mr. Keane

‘*pulls the strings’’ in the City Council. (T. 3374.)

Alleged Use of Advance Information

The Court of Appeals held that the charge of mail

fraud could be predicated upon petitioner’s alleged use of

advance information which came to him in his official po-

sition. The allegation centered about Alpine’s purchase

of lots in the 87th and Mackinaw area which was later

designated for urban renewal. There was, however, no

evidence that any information about this area came to

petitioner by virtue of his official position.

The only evidence introduced to prove use of advance

official information was a conversation between petitioner

and Hennessey in April or May, 1966:

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12

‘‘According to Hennessey’s testimony Keane said

that they should buy all the lots they could in the

87th and Mackinaw area because the government was

going to construct a big project there.’’ Appendix,

p. 5, infra.

Six months before this conversation, a staff memo-

randum of the City’s Department of Urban Renewal

(‘*D.U.R.’’) recommending a project in the 87th-Mackinaw

development area was released to the press. (T. 1532-83).

The Chicago Tribune then published an article stating,

inter alia:

‘‘\ 35-block area on the southeast side known as

Millgate [predecessor designation for the 87th-Macki-

naw area], sometimes called one of the city’s most

rapidly deteriorating areas, will be studied for rede-

velopment by the Department of Urban Renewal.”’

(T. 1602-1605).

This press release and article capped ten years of highly

publicized public discussion concerning necessary urban

renewal of the area. (A. 70-5; T. 1532-33, 1583; Govt. Ex.

16-11).

The government’s proof of the use of advance official

information, therefore, consisted solely of petitioner’s

statement of a fact which had been public knowledge for

six months. There was no proof that petitioner received

any advance official information or even that there was

any information available other than that which had been

made public.

The weakness of the government’s proof of the alleged

use of advance information was highlighted by the gov-

ernment’s argument that since Keane had ‘‘clout’’, he

‘‘somehow was aware that D.U.R. was interested in the

...area...’’ (e.g. Govt. Br., 38) (Emphasis added).

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13

The Court of Appeals recognized the weakness in the

proot, when it stated:

‘*Although the evidence is not overwhelming on the

use of advance information charge, and it is possible

to interpret the evidence as representing shrewd

business judgment on Keane’s part, we cannot sav

7

that the jury was not entitled to believe that Keane

made use of advance information to acquire substan-

tial amounts of property [approximately 30 individual

lots} in an area prior to the public announcement in-

dicating that the area was being considered for urban

renewal.’’ Appendix, p. 18, infra.

No property in this area, however, was acquired ‘‘prior

to the public announcement.’’

Alleged Deprivation of Faithful Service

Whether petitioner actually defrauded his colleagues and

the public of their ‘‘right to . . . faithful service and the

right to be advised of material circumstances with regard

to the special assessment foreclosures and compromises

upon which they voted,’? Appendix, p. 29, infra, requires

an understanding of the interrelationships of state statutes,

city ordinances and City Council procedural rules and

practices. It also requires an understanding of the

practice, custom and usage in the Cireuit Court of

Cook County, the corporation counsel’s office and the city

comptroller’s office pertaining to scavenger property, the

levying, collection and distribution of special assessments,

the use of special assessment funds and foreclosure pro-

ceedings.

Although the Court of Appeals cites certain of the stat-

utes involved, it does not cite all of the statutes necessary

to a proper understanding and determination of this issue.

Many of the statutes involved have never been interpreted

14

by local courts, and none of them have been considered

in any proceeding resembling the context of the instant

ease. Certain matters are, however, beyond dispute:

(1) ‘‘There does not appear to be a reasonable basis

from the exhibits introduced upon which to conclude that

properties in which [petitioner] had an interest received

any more favorable treatment than other properties that

were handled through the ‘compromise offer in lieu of

foreclosure’ procedure.’? Appendix, p. 8, infra, n. 8. This

is the only lien clearance procedure in which the City acted

without final decision by the Cireuit Court of Cook County.

(2) The delinquent special assessment bonds involved

were issued at least 40 years ago; there is no evidence

that persons other than professional dealers in special

assessment bonds held the bonds.

(3) As regards foreclosures, the Cireuit Court of Cook

County, not the City Council, actually set the minimum

bid on a transcribed record made in open court after no-

tice to all interested parties who were entitled to appear

and participate in both the judicial procedure setting the

minimum bid and the ultimate foreclesure sale. (T. 1088,

1111-1112, 1115-1116.)

(4) The bondholders invariably settled their claims

among themselves. (T. 1104-1106, 1195, 2439, 2662, 2663,

2761, 2784).

(5) Everyone involved in special assessment procedures

testified that the minimum bid made no difference to the

foreclosure price or the return realized by the bondholders.

(T. 1104-6, 1195, 2662-3, 2761, 2784, 2765-6, 2444, 2400,

2493).

(6) Although the court below held ‘‘it is not clear how

these [special assessment] funds are or will be used in the

TIRE GSN A Fo ERE SS NITEM LEE EI IETS

15

future, we cannot say that the city has no interest in using

them again as it did in the depression or in some other

manner,’’ it is clear how special assessment funds were

used in the past and will be used in the future. By law,

these funds may be used only to pay bondholders. People

v. Drobnick, 1 Ill.2d 456, 461 (1963); City of Park Ridge

v. Hollis, 35 Ill.2d 489, 493 (1966).

Aljthough the court held, in effect, that for purposes of

the mail fraud statute petitioner’s interest, in and of it-

self, was a material fact and that ‘‘Keane should have

disclosed his interest’’ (Appendix, p. 29, infra), the alder-

men who testified were divided on this issue. Those who

demonstrated an understanding of special assessment pro-

cedures and foreclosures testified that in these cireum-

stances in which the City had no financial interest and in

which the City Council’s action was ministerial or pro

forma, disclosure was not necessary. (T. 2495-2496, 2575,

2579, 2588) ; those who demonstrated a lack of understand-

ing of foreclosure proceedings or special assessments tes-

tified that there should have been disclosure. (T. 1840,

1338-1339, 1348, 1353, 1751, 1757, 1810, 1846, 1824, 1861-

1862).

16

REASONS FOR GRANTING THE WRIT

I,

THE DEWISION BELOW CREATES CONFUSION CON.

CERNING. AND DISREGARDS CONSTITUTIONAL

REQUIKEMENTS INVOLVED IN, THE INTERRELA-

TIONSHIP OF THE CONFRONTATION CLAUSE AND

THE BUSINESS RECORDS EXCEPTION TO THE

HEARSAY RULE.

Confrontation and cross-examination of witnesses are

basic to the administration of criminal justice in the

adversary system. Thus, the evidentiary hearsay rule has

not been equated with the confrontation clause. Dutton v.

Evans, 400 U.S. 74, 86 (1970). Nor is that clause ‘‘a codi-

fication of the rules of hearsay and their exceptions as

they existed historically at common law.’’ California v.

Green, 399 U.S. 149, 155, 156 (1970).

Here, the Seventh Circuit, relying solely on the ‘‘busi-

ness record’’ exception to the hearsay rule, perniitted a

sequence of conversations to be introduced against peti-

tioner by memorandum in total disregard and without con-

sideration of his basic rights to confront and cross-examine

the alleged declarants. Appendix, pp. 43-45, infra.

Hearsay evidence, justified as an exception to the rule,

has, on limited oceasion, been received without raising

constitutional objections. See Mattox v. United States, 156

U.S. 287, 244 (1895). However, there has been in those cases

an overwhelming argument made for its reliability (either

as a result of pre-trial confrontation or otherwise), Man-

17

cusi v, Stubbs, 408 U.S, 204 (1972), and a clear showing of

the declarant’s unavailability, The need for jury evalua-

tion of the declarant’s demeanor has been minimal.

There is, no doubt, a trend toward greater use of hear-

say evidence and, hence, an erosion of the hearsay rule,

Concurrently, however, it is increasingly recognized that

the constitutional standards required by the eonfronta-

tion clause and due process place limitations on receipt of

hearsay evidence against an accused,

Under the guidelines required by the confrontation

clause, there must be a showing of both great necessity

and reliability to enable evidence te be admitted pur-

suant to a business record exception. ‘‘. .. [T]he fact that

evidence fits the statutory definition of ‘business records’

should not of itself determine that it is constitutionally

admissible.’’ Jennings, Preserving the Right to Confron-

tation—A New Approach to Hearsay Evidence in Crim-

inal Trials, 113 U. of Pa. L. Rev. 741, 763-764 (1965).

The Seventh Circuit, here, has ignored guidelines here-

tofore recognized. Instead of requiring a showing of non-

availability of witnesses and reliability of testimony, it has

put its imprimatur on the use of business record hearsay

of alleged declarants without a showing of reliability and

nonavailability. The Seventh Cireuit, thus, places hearsay

and the confrontation clause in absolute congruency.

Moreover, through an expanding hearsay exception, the

Seventh Circuit has sanctioned as competent evidence,

hearsay testimonial utterances far beyond those hereto-

fore found to be compatible with the constitutional guaran-

tee and has contracted the area in which the right to con-

frontation may effectively operate.

The problems attendant upon the interrelationship of

the confrontation clause and the hearsay rule have been

18

underseored by the adoption of the Federal Rules of Evi-

dence. The Advisory Committee clearly recognized the

issues, See Advisory Committee’s Introductory Note on

the Hearsay Problem reprinted in 4 Weinstein’s Evidence,

800-1—800-8 and particularly 800-5, 800-7, Judge Wein-

stein, in his treatise, further focuses on this issue:

‘‘What then does the Confrontation Clause mean?

Does it impose any limits on the receipt of hearsay

evidence against an accused, or are the interests

served by the constitutional doctrine so similar to the

rationale underlying the hearsay rule that an excep-

tion which meets evidentiary tests also satisfies the

constitutional standard? The Supreme Court has on

numerous occasions expressly rejected the notion that

the hearsay rule and the right of confrontation are

congruent, though it acknowledges that both protect

similar values. (footnote omitted) But it is still far

from clear precisely what limits the constitutional

doctrine imposes. Part of this uncertainty derives

from the fact that the confrontation clause has re-

ceived relatively little judicial attention until re-

cently.

* * ®

‘‘ [A] large gray area still exists where it is not

clear to what degree the two doctrines overlap.’’ (4

Weinstein’s Evidence, 800-19, 800-20).

Even prior to the new rules, the Courts of Appeals have

expressed concern as to the interrelationship of the ex-

panding ‘‘business records’’ exception to the hearsay rule

and confrontation and due process standards, The Courts

of Appeal for four Cireuits (Second, Fourth, Fifth and

Ninth) have at times expressed doubt that the confronta-

tion clause places any limit upon the business records ex-

ception. See, e.g., United States v. Leathers, 135 F.2d 507,

511 (2d Cir. 1943) (mailing stamps affixed by bank to nu-

ae aa RERBRINNORCE Se SENCNERRIR ORE MINE

19

merous letters in the ordinary course of business) ; Kay v.

United States, 255 ¥, 2d 476, 480, 481 (4th Cir, 1958) (cer-

tifieate showing aleoholie content of a blood sample); /Zan-

ley v. United States, 416 F.2d 1160, 1167-1168 (5th Cir.

1969) (bank collection slips); McDaniel v, United States,

343 FY, 2d 785, 789 (Sth Cir, 1965) (accounting records) ;

Warren vy, United States, 447 F, 2d 259, 262 (9th Cir. 1971)

(proof of non-registration of a weapon),

Courts in other cireuits hold on the other hand, that the

confrontation clause places an absolute limitation on the

introduction of evidence under the business records excep-

tion, Phillips v. Neil, 452 F.2d 337, 347 (6th Cir. 1971)

(hospital records read in rebuttal to an insanity defense) ;

United States v. Johns-Manville Corp., 225 F.Supp. 61, 63

(E.D. Pa. 1963) (business records generally).

The confusion within the Circuits is apparent in the

holding of McDaniel v. United States, 343 F.2d 785. There,

the Fifth Cireuit conceded that the trial judge has a duty to

determine whether business records are constitutionally

admissible under the confrontation clause, but the court

weakened this position by stating that the confrontation

clause may not be invoked to exclude evidence admissible

pursuant to an exception to the hearsay rule. 343 F, 2d

785, 789.

Other courts have recognized in matters involving the

‘business records’? exception that ‘‘{t}he Act was not

designed * * * to facilitate the introduction of hearsay as

to which the reporter, if he appeared in person, would not

he allowed to testify.’ United States vy. Burruss, 418 F.2d

677, 678 (4th Cir. 1969); United States v. Parker, 491

F.2d 517, 521 (8th Cir. 1973); United States vy. Beasley,

513 F.2d 809, 314 (Sth Cir. 1975),

In those instances in which the use of business records

has been permitted, the writings contained information

ang

20

similar to that found in the original ‘‘shop books.’’

The information was reliable because of its routine-

ness: its admission was necessary because of the im-

practicality of determining who, or even how many per-

sons, were responsible for the entry.

In the instant case, the Seventh Circuit, without appar-

ent consideration of the constitutional implications, has

gone far beyond routine shop book material and sanctioned

the use of a ‘“‘business record’’ reciting two conversations

involving three persons and has permitted the government

the widest latitude in drawing inferences therefrom.’ The

business record was merely identified as such; no one was

called to testify concerning the conversations reported

therein. The use of this type of memorandum as a sub-

stitute for direct testimony to introduce an alleged se-

quence of conversations negates any constitutional pro-

tection.

The use of a document in this manner does more than

prevent confrontation of witnesses by the accused. The

quest for a verdict inspires ‘‘trial by memorandum.’’ Ad-

versary examination is replaced by untested documentary

evidence evaluated only by the prosecutor. The oppor-

tunity for abuse of prosecutorial discretion is maximized.

See Phillips v. Neil, 452 F.2d 337, 347 (6th Cir. 1971).

The document here admitted was critical to the govern-

ment’s ease. It was used for a variety of purposes and as

the basis for multiple inferences concerning the alleged use

of undue influence. Thus, it, alone, of thousands of docu-

ments, was specially enlarged for presentation and argu-

ment to the jury.

The government made absolutely no showing of neces-

sity to justify the introduction of the memorandum as a

7 The constitutional implications of the issue were raised below.

(See Keane’s Brief, 91-95 and Petition for Rehearing, 13-16.) i

REET ERGO. GTS SRNR ESE ha ae mR NR ERIRET PT —

BLEED THROUGH

21

substitute for the direct testimony of Bach and Swibel. The

government made no effort to show that Bach or Swibel,

both of whom had testified before the Grand Jury, were

unavailable. Instead, in rebuttal argument, the gov-

ernment explained its failure to call these declarants

by attacking their reliability, thus enhancing the need for

the jury to determine their credibility and the validity of

the government’s assertion that the declarants were, in

fact, susceptible to petitioner’s pressure. The jury could

not make these determinations merely on the basis of the

hearsay letter. (T. 3373, 3374)

As the evidence sought to be adduced by the govern-

ment through the use of the document and the inferences

to be drawn therefrom were crucial in proving the alleged

‘‘scheme’’, a burden was placed upon the government to

produce the declarants or, at least, to account for their

unavailability. As Judge Weinstein states:

‘*If the evidence is crucial and has never been test-

ed by cross-examination, the burden on the govern-

ment of producing the declarant or accounting for his

unavailability does not seem unduly large, particular-

ly since a person’s liberty is at stake. This is a situa-

tion par excellence where the right to confrontation

should prevail.’’*® (4 Weinstein’s Evidence, 800-24).

SIt has been stated that “The trial judge in a criminal case

should admit hearsay statements only if the defendant is afforded

an adequate substitute for confrontation.” Jennings, Preserving the

Right to Confrontation—A New Approach to Hearsay Evidence in

Criminal Trials, 113 U. of Pa. L. Rev. 741, 748 (1965). In this

case, there has been no substitute. Petitioner has been denied access

to the Grand Jury testimony and other statements, if any, of Bach

and Swibel. We respectfully request the Court to examine this

testimony in camera to determine whether the government's use of

the “Broderick letter” comports with “the fundamental demands of

due process of law in the fair administration of criminal justice.”

United States v. Nixon, 418 U.S. 683, 713 (1974).

PAN NDE

ey

22

Moreover, the use of the multiple hearsay document, in

conjunction with the closing argument made therefrom,

demonstrates, as the the commentators have heretofore in-

dicated, that the confrontation clause should be employed to

establish proper standards for prosecutorial behavior.

McCormick, Evidence, $252 at p. 607 (2d Ed. 1972); Note,

Confrontation and the Hearsay Rule, 75 Yale L. Jour.

1434 (1966) :

“The Confrontation Clause .. . should foeus on the

legitimate concern raised by a liberalized hearsay

rule: that such a rule may institutionalize baseless

prosecutions, or at least tempt prosecutors to use

hearsay instead of live witnesses whose demeanor is

unimpressive; or that it may induce prosecutorial

negligence in securing witnesses by holding out the

easy alternative of presenting their statements

through other witnesses. Such practices undermine

any system of criminal justice that presumes inno-

cence and insists that the process of rebutting the pre-

sumption be absolutely above reproach.

* * *

‘The objection to the prosecutor’s presentation of

hearsay instead of an available witness is not that

such hearsay necessarily is less reliable than the hear-

say of an unavailable witness, but that the prosecu-

tor has made the testimony less reliable than it might

have been.’’ (75 Yale L. Jour., 1434, 1438, 1439).

Here, the prosecutor used the document and, in closing

argument, made extensive references thereto and drew

broad inferences therefrom. Because the testimonial utter-

ances in the document are untested, it cannot be deter-

mined whether the government’s closing argument accords

with the standards required by Berger v. United States,

Pe CELLO IR LOTS BENS PSEA RASTA SPIE DEE ON Fp TS ARAL

— a ¥

23

295 U.S. 78, 88 (1934). Only the government has knowl-

edge of the facts, and it has failed to reveal them.®

The issues raised by the admission and use of the docu-

ment in this case concern the administration of criminal

justice in the federal courts and the nature of criminal

trials. They assume added dimensions in the light of the

adoption of the Federal Rules of Evidence.

Respectfully, these issues justify the grant of certiorari

to review the judgment below.

II.

THE DECISION BELOW CONFLICTS WITH THE

STANDARD OF REVIEW REQUIRED IN CRIMINAL

CASES.

The inferences drawn from the multiple hearsay chain in

the Broderick letter permeated and affected the entire trial.

If it could be found that petitioner was so powerful as to

unduly influence a man of Swibel’s stature, the concededly

weak evidence of ‘‘advance information’? gains appeal.

Here, the entire charge is based upon petitioner’s position

as an important local government figure and the fact that

he allegedly suggested purchase in the 87th-Mackinaw de-

velopment area even though (1) the evidence was undis-

puted and overwhelming that information concerning ur-

ban renewal there had previously been published in mass

media, and (2) there was no evidence that petitioner had,

in fact, obtained advance, confidential or inside infor-

mation.

® Because of the withholding of the Bach and Swibel testimony,

it cannot be determined whether the government has failed to pro-

duce favorable evidence in violation of the mandate of Brady vy.

Maryland, 373 U.S. 83 (1963).

24

‘Advance information,’’ per se, is not unlawful or even

improper. To use advance information improperly, the in-

formation must be ‘‘inside’’ or confidential.

The opinion below, however, creates an irrebuttable pre-

sumption that, if a public official has any information,

it necessarily is either ‘‘inside’’ or ‘‘confidential.”’ This

is not the law. The creation of such a presumption inso-

far as it affects the quantum of evidence required for con-

viction merits review.

Without such a presumption, the evidence concerning

advance information, taken most favorably to the gov-

ernment, is not merely ‘‘not overwhelming,”’ Appendix, p.

18, infra; it is so insubstantial as to violate the standard

required on review of criminal cases. Viewed in the

light most favorable to the government, there must be

substantial evidence of guilt to sustain a conviction. See

Glasser v. United States, 315 U.S.. 60, 80 (1942). THow-

ever, this facet of the alleged scheme, the use of advance

information, is ‘‘so totally devoid of evidentiary support

as to render . . . [conviction] unconstitutional under the

Due Process Clause...’’ See Garner v. Louisiana, 368 U.S.

157, 163 (1961); Thompson v. City of Louisville, 362 US.

199, 204 (1960). .

Ill

THE PROSECUTION HERE INTRUDES ON AREAS

OF PECULIARLY LOCAL CONCERN. APPROVAL

WILL PERMIT GREATLY EXPANDED FEDERAL

OVERSIGHT AND CONTROL OF LOCAL AFFAIRS.

This case concerns complex state regulatory schemes in

areas traditionally the province of local administrators and

state courts and not heretofore the subject of claims of

ee ee

FRE PRLS SFE IP Ee ORR 0 RE ERS BOT IRS EN ES.

BLEED THROLIGH

25

“‘fraud’’. Statutes and ordinances governing scavenger

sales, special assessment procedures and local foreclosure

practices have, for the first time and for the purpose of

effecting this prosecution, been interrelated with other

state statutes pertaining to conflict of interest and a city

council rule of order. Interpretation of such laws and their

interrelationships is properly a function of the state and is

customarily left to its judiciary. The federal criminal claim

against petitioner is clearly ‘“‘entangled in a skein of

state law... .’? McNeese v. Board of Education, 373

U.S. 668, 674 (1963).

In addition, federal intervention of this sort inevitably

and improperly creates standards for local legislators.

Such standards, even on the federal level, are, at best,

vaguely defined. ‘‘Once outside the boundaries of bribery

and overt self-dealing, there is very little consensus .. .

about what constitutes a legitimate or an illegitimate busi-

ness or political transaction.’’ See Beard and Horn, Con-

gressional Ethics, The View from the House, 42-45

(Brookings, 1975).

Ordinarily, in civil cases, where complex state statutory

schemes are involved, federal courts will abstain f rom mak-

ing rulings. Such state law questions are left to be decided

by state courts. City of Chicago v. Fieldcrest Dairies, Inc.,

316 U.S. 168 (1942); Harris County Commissioners Court

v. Moore, 420 U.S. 77 (1975). This principle is equally im-

portant in the administration of criminal jrstice. As stat-

ed in Hoaq v. New Jersey, 356 US. 464, 468 (1958):

‘*... It has long been recognized as the very essence

of our federalism that the states should have the

widest latitude in the administration of their own

system of criminal justice.’’

In this case no traditional crime or fraud supported the

alleged ‘‘mail fraud.’’ There was neither bribery, extor-

ROG LIPS:

26

tion, income tax evasion, false pretenses or the use of false

statements. The fraud, at best, depended on petitioner’s

alleged technical breach of vague, moral standards estab-

lished by the courts below. Even then the courts varied.

The district judge premised his standards on the state

statutes and City Council Rules, and instructed the jury

accordingly. (T. 3416-22) The Court of Appeals paid

lip service to the state statutes, but grounded its conclusion

that there was fraud on an amorphous standard of moral

conduct. Appendix, pp. 15-16, infra. Absent the mail fraud

statute, however, a federal court would not consider the

peculiarly local in rem procedures with which the various

state and local governmental and judicial agencies were

here involved. This prosecution, thus, encourages intru-

sion into delicate areas of a state’s administration of

purely local procedures and shifts massively the authori-

ty of the federal government to control local affairs.

It was not the purpose of the mail fraud act to pro-

vide a vehicle for this sort of federal oversight or inter-

vention by federal prosecutors or courts, particularly in

areas in which their knowledge and awareness is limited

and where local custom and practice might place a gloss

on literal interpretation of statutory language.

Intrusion into the local arena (and, especially, into local

politics) has been a recurring issue in the administration

of federal criminal justice. Such intrusion has been strong-

ly condemned.

The late Justice Robert A. Jackson, as Attorney General

of the United States, addressed a conference of federal

prosecutors on the proper use of their power:

1° The trial court’s instructions recited the statutes with no attempt

at explanation.

FOG EI OOO I. OR LAT EELS EGGERS RIES AB i LET

ee

Se

27

TA]... delicate task is to distinguish between the

federal and the local law enforcement activities b+.

we are concerned only with the prosecution of acts

which the Congress has made federal offenses. . . .

“But outside of federal law each locality has the

right under our system of government to fix its own

standards of law enforcement and/or morals. And the

moral climate of the United States is as varied as its

physical climate. . . . In spite of the temptation to di-

vert our power to local conditions where they have

become offensive to our sense of decency, the only

long-term policy that will save federal justice from

being discredited by entanglements with local polities

is that it confine itself to strict and impartial enforce-

ment of federal law . . . there should be no striving

to enlarge our power over local affairs and no use of

federal prosecutions to exert an indirect influence

that would be unlawful if exerted directly.’’ (Journal

of the American Judicature Society, Vol. 24, No. 1,

June, 1940, p. 20.)

See United States v. Archer, 486 F. 2d 670, 677-678 (2d

Cir. 1973). See also Jackson, The Supreme Court in the

American System of Government, 70, 71 (Harper Torch-

books, 1963) ; Screws v. United States, 325 U.S. 91, 160-161

(1944) (Frankfurter, J., dissenting); Rutkin v. United

States, 343 U.S. 130, 141-146 esp. n. 5 at p. 144 (1951)

(Black, J., dissenting) ; Friendly, Federal Jurisdiction: A

General View, 58, 61 ( 1973).

The instant prosec):ion uses the mail fraud statute to

alter significantly the federal-state balance. All of the

acts of petitioner were intrastate. If a crime has been

committed, state criminal statutes are available. Congress

has traditionally been reluctant to define as a federal crime

conduct readily denounced as criminal by the states. The

mail fraud statute was enacted in accord with that principle.

The legislative history of the Act does not demonstrate

———_— ERTL PRLS RAE LS GA AOS AA EIS RIEU MLE IN EE EM

28

any other purpose. See, e.g., United States v. Bass, 404

U.S. 336, 349-350 (1971). See also, Rewis v. United States,

401 U.S. 808, 812 (1971). Thus, this case ‘‘dramatically

intrudes’’ upon traditional state criminal jurisdiction.

CONCLUSION

For the foregoing reasons, petitioner respectfully re-

quests that this Court issue its writ of certiorari to review

the judgment of the United States Court of Appeals for

the Seventh Circuit.

Respectfully submitted,

JerRoME H. TorsHEN

11 South LaSalle Street

Chicago, Illinois 60603

312-372-9282

Joun Powers CROWLEY

53 West Jackson Blvd.

Chicago, Illinois 60604

Attorneys for Petitioner.

SuermMan C. Macipson

Maria A. SKIRNICK

Epwarp G. WIERzBICKI

On the Brief