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UNITED STATES v. ISAACS
May 30, 1972
UNITED STATES OF AMERICA
THEODORE J. ISAACS ET AL.
The opinion of the court was delivered by: Robert L. Taylor, District Judge.
Defendants have filed a combined total of forty-three motions
(exclusive of alternative motions and motions filed after the
deadline agreed to by counsel in January), supported by the same
number of briefs. The Government has responded and defendants
have filed rebuttal briefs. The reading of the motions and briefs
alone involved considerable time and effort. Some of the motions
raise difficult questions about which the courts have expressed
Motions filed by Otto Kerner, Jr. will be considered in
numerical order first, as they were the first to be filed. There
are thirteen in number.
Unauthorized Persons in Grand Jury Room
The first is a motion to dismiss the indictment because of the
presence of unauthorized persons in the grand jury room during
its sessions. This motion is supported by affidavit and is based
on an alleged violation of Rule 6(d), F.R.Cr.P., which provides:
"Attorneys for the government, the witness under
examination, interpreters when needed and, for the
purpose of taking the evidence, a stenographer or
operator of a recording device may be present while
the grand jury is in session, but no person other
than the jurors may be present while the grand jury
is deliberating or voting."
The attached affidavit of Kerner states, in substance, that he
testified on August 6, 1971 before the May, 1971 grand jury which
returned the indictment; that during his testimony on that day he
saw in the grand jury room the grand jurors, the reporter, the
Government lawyers and three other men not shown by the
transcript to have been present; that he recognized one of the
three men as Internal Revenue Agent T.R. Johnson, with whom he
had spent several days in June, 1965, in the course of an audit
of certain of his income tax returns; and, that he did not know
the identity of the other two men.
An old case dealing with the subject is United States v.
Edgerton, 80 F. 374 (D.C.Mont., 1897). In that case, an expert
witness was not only permitted to remain after he had testified
before the grand jury, but was also permitted to propound
questions to subsequent witnesses. The Government argued that the
defendant was not prejudiced by these actions. The Court rejected
this contention and stated that the common law rule excluding all
but the witness and the United States Attorney from the grand
jury sessions admitted no exceptions.*fn1 Potentials for
prejudice were listed that could occur by the presence of an
expert witness. The Court concluded that if the presence of an
unauthorized person is excused, it will be impossible to set the
bounds to prevent abuse. This statement comes as close as
possible to a per se rule requiring dismissal.
The foregoing cases were largely conclusory in their reasoning.
United States v. Carper, 116 F. Supp. 817 (D.C.D.C., 1953), is
better reasoned and supports a per se rule. There three deputy
marshals were permitted to remain in the room while the prisoners
they were guarding testified. The Government argued that the
deputies' presence was both necessary for protection and in no
way prejudiced the defendant. The Court said that at most the
defendant need only show "probable prejudice" by the deputies'
presence. This prejudice was supplied by a finding that the
capacity of the deputies as the witnesses' keepers could well
have influenced their testimony. It was pointed out that Rule
6(e) could possibly allow the deputies to divulge what they had
heard since that section stated secrecy could not be imposed on
anyone other than those listed. Finally, the Court noted the
virtual impossibility of an accused ever showing prejudice. This
statement severely limited the remarks about showing "probable
prejudice." Probable prejudice in this case was supplied and the
case was dismissed.
Certain law review articles have suggested that the purpose of
the rule is to maintain secrecy.*fn4 Wigmore argues that the
rule is not for the accused but for society, witnesses and
jurors. Wigmore on Evidence, Vol. VIII, §§ 2360-63, pp. 728-41
(1961). Secrecy is undoubtedly a purpose behind the rule but the
rule is based on a broader ground and that is the possibility of
undue influence. In Latham, supra, the stenographer had taken an
oath of secrecy and there was no allegation that it had been
broken. Nevertheless, the Court dismissed the indictment. In
Carper, supra, the Court pointed out that the prejudice would be
the coercive atmosphere generated by the deputies' presence.
Two recent cases reinforce the undue influence factor as the
basis for the rule. The first is that of United States v. Borys,
169 F. Supp. 366 (D.C.Alaska, 1959). In that case, the mother was
permitted to remain in the grand jury room while her
seven-year-old child was testifying. The Court held that this
invalidated the indictment. The other case is that of United
States v. Bowdach, 324 F. Supp. 123 (S.D.Fla., 1971), in which an
FBI agent was in the grand jury room to operate a machine playing
tapes for the purpose of refreshing a witness' recollection. In
that case, the Court said:
"Rule 6(d) and the cases construing it lay down a
hard and fast rule which allows for no exceptions."
We conclude that an evidentiary hearing is necessary to
determine if unauthorized persons were in the grand jury room
during its sessions. United States v. Brumfield, 85 F. Supp. 696,
706 (W.D.La. 1949).
Judge Kerner also moves pursuant to Rule 12(b), F.R.Cr.P., for
an order dismissing the indictment upon the ground
that the Government unconstitutionally subjected him to a mail
cover in violation of Article III of and the First and Fourth
Amendments to the United States Constitution, or in the
alternative for an order requiring the Government fully to
disclose all the facts and circumstances surrounding the
aforesaid mail cover and any other mail cover imposed on the
defendant and any direct or indirect use made of the fruits
thereof, and for an evidentiary hearing thereon for the
suppression of all of said fruits. The motion is supported by
affidavit of Charles Rhyne, a mail carrier, who stated in
substance that sometime about the middle of January, 1971, he
received a telephone call from his supervisor, Mr. Erwood, that
he would be receiving Form 2007 and that he should list on this
form all mail received in Judge Kerner's chambers, including the
name, address, city and state of the senders; that sometime
previous to January, 1971, the date he did not recall, he was
ordered to fill out the same forms on mail received by Judge
Kerner's Chambers in the Dirksen Building.
Defendant's alternative motion for an order requiring the
Government to disclose all facts surrounding the mail cover and
any other mail cover imposed on the defendant, and any direct or
indirect use thereof, is sustained.
The Government is directed to state for the use of the
defendant the following: (1) the full extent and duration of the
mail covers; (2) the circumstances under which it was instituted,
including the names and positions of all persons who authorized
it; (3) the procedure by which it was instituted, including the
names and positions of all persons involved therein; (4) the
purported justification for its institution; (5) the information
it produced; (6) the names and positions of all persons to whom
such information was transmitted and the date of such
transmission; (7) the use made of such information.
Many of the courts that have dealt with the mail cover question
have held that the Fourth Amendment does not prevent postal
inspectors from copying information contained on the outside of
sealed envelopes in the mail where no substantial delay in
delivery is involved. Lustiger v. United States, 386 F.2d 132,
139 (C.A.9, 1967); United States v. Costello, 255 F.2d 876, 881
(C.A.2, 1958); United States v. Schwartz, 283 F.2d 107 (C.A.3,
1960); Canaday v. United States, 354 F.2d 849 (C.A.8, 1966);
Cohen v. United States, 378 F.2d 751, 760 (C.A.9, 1967). We have
examined the case of Katz v. United States, 389 U.S. 347, 88
S.Ct. 507, 19 L.Ed.2d 576 (1967) relied upon by the defendant and
do not find anything in that decision which holds mail cover
operations are unconstitutional. See Hoffa v. United States,
385 U.S. 293, 87 S.Ct. 408, 17 L.Ed.2d 374 (1966).
We are not impressed with the Government's position that Judge
Kerner is not in a position to question the mail cover operations
on constitutional grounds until he received the mail from the
sender. See Jones v. United States, 362 U.S. 257, 80 S.Ct. 725,
4 L.Ed.2d 697 (1960).
Although this Court neither approves nor condones the mail
cover of Judge Kerner's chambers as a federal appellate judge,
this will not justify the extreme action of dismissing the
indictment for alleged violation of his rights under Article III
and the First and Fourth Amendments to the Constitution, as
argued by his attorneys.
Destruction of Essential Evidence
Defendant Kerner moves to dismiss Count XV on the ground that
the Government destroyed essential evidence. The Government in
reply states that on July 15, 1970, Special Agents Stufflebeam
and Campbell interviewed the defendant. During the interview,
both of them took notes for the purpose of later incorporating
them into a memorandum of interview. Later on the same date, the
agents dictated their rough notes and their recollection of what
told them to the IRS secretary. Based upon the agents' dictation,
the secretary typed a memorandum of interview. On the evening of
July 15, 1970, the agents compared their notes with the formal
memorandum of interview and determined that the formal memorandum
accurately and fully reflected their rough notes. On, or shortly
after July 15, in accordance with the established practice, the
rough interview notes were destroyed. See affidavits of
Stufflebeam and Campbell, Exhibits A and B to the Government's
The case of Killian v. United States, 368 U.S. 231, 82 S.Ct.
302, 7 L.Ed.2d 256 (1961), also is cited on the question of
whether the notes were destroyed due to ordinary or gross
negligence or for the purpose of preventing them from being used
as evidence. The Court observed that if the notes of Ondrejka of
expenses were made only for the purpose of transferring the data
thereon to the receipts to be signed by Ondrejka and if after
having served that purpose they were destroyed by the agents in
good faith and in accordance with their normal practice, it will
be clear that their destruction did not constitute an
impermissible destruction of evidence nor deprive defendant of
any right. On the other hand, if they were destroyed for the
purpose of depriving the accused of evidence, or in bad faith,
such would constitute impermissible destruction.
Defendant relies upon United States v. Bryant, 142 U.S.App.D.C.
132, 439 F.2d 642 (1971), to support his motion to dismiss the
income tax count of the indictment because of the destruction of
the agents' notes. In that case, the Court held that where
Government agents made a tape recording of motel room
conversations between defendant and an undercover agent
concerning sale of narcotics, and the Government claimed it lost
the recording, the case should be remanded to determine the
degree of negligence or bad faith involved on part of the
Government and the importance of the evidence lost.
Another case is that of United States v. Heath, 147 F. Supp. 877
(D.C.Hawaii 1957), appeal dismissed 260 F.2d 623 (C.A.9, 1958).
In that case, defendant was charged with evading his income taxes
for the years 1949 and 1950 in violation of 26 U.S.C. § 145(b).
His books and records were turned over to the agents of the
Government in 1952. The trial court found that the records of the
defendant turned over to the Government for at least a part of
the period covered by the indictment were corrected by defendant
in his handwriting and initialed and that those records were in
existence prior to the time the Government agents received
certain records from the accused and that those records were in
the hands of the Internal Revenue agent during the period they
were investigating the civil and criminal tax liability of the
accused for the period 1949 and 1950. The Court held that it
would be a denial of a constitutional trial to compel the
defendant to go to trial in the absence of the records.
In the instant case, the notes were made for the purpose of
preparing a formal memorandum. The memorandum has been furnished
to the defendant. It is not uncommon for Government agents to
destroy their rough notes. See Killian, supra; United States v.
Hoffa, 349 F.2d 20 (C.A. 6, 1965), aff'd 385 U.S. 293, 87 S.Ct.
408, 17 L.Ed.2d 374 (1966).
Accordingly, the Court must hear proof before a final ruling
can be made on this question.
Statement of Offense under Travel Act
Motion is made to dismiss Counts I through V for failure to
charge an offense against the United States under Title 18 U.S.C. § 1952,
or in the alternative to dismiss Counts II through V for
In considering the motion to dismiss for failure to state an
offense, it is appropriate to recall the language of the United
States Supreme Court in Hagner
v. United States, 285 U.S. 427, 431, 52 S.Ct. 417, 419, 76 L.Ed.
"The rigor of old common-law rules of criminal
pleading has yielded, in modern practice, to the
general principle that formal defects, not
prejudicial, will be disregarded. The true test of
the sufficiency of an indictment is not whether it
could have been made more definite and certain, but
whether it contains the elements of the offense
intended to be charged, `and sufficiently apprises
the defendant of what he must be prepared to meet,
and, in case any other proceedings are taken against
him for a similar offence, whether the record shows
with accuracy to what extent he may plead a former
acquittal or conviction.' Cochran and Sayre v. United
States, 157 U.S. 286, 290, 15 S.Ct. 628, 630, 39
L.Ed. 704; Rosen v. United States, 161 U.S. 29, 34,
16 S.Ct. 434, 480, 40 L.Ed. 606."
Attacking these counts, defendant Kerner first claims that the
indictment fails to charge that the proceeds of the unlawful
activity were distributed after the use of the interstate
facility or travel in interstate commerce. The indictment in this
case identifies the offense the defendants allegedly conspired to
commit and apprises them of what they must be prepared to meet
and is sufficiently accurate to prevent a future prosecution. See
United States v. Kahn, 381 F.2d 824, 829 (C.A. 7, 1967); United
States v. Airdo, 380 F.2d 103, 104 (C.A. 7, 1967).
He next claims that Counts II-V should be dismissed because the
alleged connection between the illegal conduct charged and the
alleged use of interstate commerce is purely incidental to the
illegal conduct charged. He contends that this is an insufficient
use of interstate commerce to bring the charged illegal conduct
within the purview of 18 U.S.C. § 1952.
The defendant relies strongly on the case of United States v.
Altobella, 442 F.2d 310 (C.A.7, 1971), which held that the
mailing of a check [drawn on a Philadelphia bank] and deposited
by a third party endorser in a Chicago bank was an insufficient
interstate act to come within the Congressional intent behind
18 U.S.C. § 1952 because the use of the interstate facility was
incidental to the extortion scheme and because the mailing was
done by the bank.
He also relies on Rewis v. United States, 401 U.S. 808, 91
S.Ct. 1056, 28 L.Ed.2d 493 (1971), which held that § 1952 was not
intended to reach criminal activity solely because it was
patronized by out-of-state customers but was aimed primarily at
organized crime of persons residing in one state while operating
illegal activities in other states through interstate facilities.
The Court in Rewis indicated an unwillingness to construe federal
legislation so as to alter a sensitive state-federal balance,
absent a clear Congressional mandate.
He likewise relies on United States v. Bass, 404 U.S. 336, 92
S.Ct. 515, 30 L.Ed.2d 488 (1971). Bass construes 18 U.S.C.App. §
1202(a), which is ambiguous, as to whether proof that a firearm
traveled in or affected interstate commerce was an essential
element of the offense. The Court held that it was, because an
ambiguity in a penal statute is resolved in favor of lenity. It
was particularly concerned that a broad construction would permit
a novel intrusion into traditionally state criminal jurisdiction
and upset the delicate federal-state balance. The Court concluded
that absent a clear statement of Congressional intent to alter
this balance, none would be imputed. The relevance of Bass to the
instant case is based on the above policy, that is, under the
Bass philosophy of federal-state relations defendant contends
18 U.S.C. § 1952 should not be construed to reach an essentially
In light of Lee the indictment appears to charge an offense
under § 1952. The acts charged are alleged to have been
instigated by participants in the bribery scheme set forth in the
Defendant argues that Congress enacted § 1952 with a specific
intent of controlling organized crime in interstate commerce. He,
therefore, contends that the deposit of checks for collection as
charged in Counts II-IV, by itself, does not charge a violation
of § 1952 but amounts to a meddling in state matters by the
federal government. The Government answers that § 1952 was
intended to deny the use of interstate facilities to those who
corrupt public officials and that a deposit of a check for
collection is such a use of an interstate facility. See United
States v. Wechsler, 392 F.2d 344, 347, n. 3 (C.A. 4, 1968), cert.
den. 392 U.S. 932, 88 S.Ct. 2283, 20 L.Ed.2d 1389.
The Ninth Circuit in United States v. Roselli, 432 F.2d 879
(C.A. 9, 1970) discussed the scope and legislative intent behind
18 U.S.C. § 1952. The Court pointed out that while Congress
intended to strike at those illicit activities that provide
organized crime with its profits it did not limit the
prohibitions of § 1952 to:
". . . only those persons who could be shown to be
members of an organized criminal group . . . nor
against only those kinds of gambling, liquor,
narcotics, and prostitution offenses that racketeers
were engaged in at the time Congress acted. The words
of section 1952 are general; they contain no
restriction to particular persons or to particular
kinds of gambling, liquor, narcotics, and
The reasons for not restricting the class of persons covered by
§ 1952 is self-evident. It would be difficult, if not impossible,
to prove a particular defendant's association with or control by
a clandestine criminal organization. On the contrary, Congress
intended to make § 1952 generally applicable to anyone engaged in
an "unlawful activity" as defined in that statute. Bribery in
violation of the laws of the state is clearly such an unlawful
activity. There is nothing to suggest that Congress intended to
restrict the statute to racketeers. The essence of the crime is
the fraudulent scheme. The interstate communication merely
provides a constitutional basis for the exercise of federal
power. Therefore, knowing interstate travel or knowing use of an
interstate facility is not an essential element of a violation of
§ 1952. United ...