Appeal from the United States District Court for the Northern District of Illinois, Eastern Division - No. 74 CR 458. PHILIP W. TONE, Judge.
Sprecher, Bauer, Circuit Judges, and East, Senior District Judge.*fn*
Defendant-appellant, Earl Bush, was charged in an eleven count indictment with violations of the mail fraud statute, 18 U.S.C. § 1341.*fn1 Following a jury trial, Bush was convicted on all counts. The trial judge imposed concurrent one year terms of incarceration upon each count.
Earl Bush served as Press Secretary and Director of Public Relations for Mayor Richard J. Daley from 1955 to 1973. During that period he was also the owner of Dell Airport Advertising, Inc. ("DAAI"), which held the exclusive contract with the City of Chicago for display advertising at Chicago's O'Hare International Airport.
Essentially, the indictment alleged that Bush, as owner of DAAI at the time he was employed by the City of Chicago, engaged in a scheme to deprive the citizens of Chicago, its mayor, officials and employees, of his loyal and faithful services as a city employee, the honest administration of the city's business, and information material to the decisions which the city's officials were required to make in conducting the city's business. The indictment also charged that Bush schemed to obtain money, property and other things of value by false representations.
The primary thrust of Bush's appeal to this Court is that by a misapplication of the mail fraud statute and erroneous jury instructions, he believes he was improperly and unfairly convicted of a non-crime. In order to consider arguments by both sides dealing with the applicability of the mail fraud statute we must carefully review the factual record.
In the latter part of 1961 and early 1962, a new terminal, runways and other facilities were under construction at O'Hare Field, which was to be Chicago's first jet airport. To facilitate the completion and the opening of the airport, Mayor Daley established a small informal committee to negotiate contracts for the concessions operations at O'Hare. The committee consisted of John Duba, Deputy Mayor, William Downes, Commissioner of Aviation, and John Melaniphy, Corporation Counsel. Although not formally appointed, John Duba was assumed to be the committee's chairman.
In 1961 Bush's company*fn2 entered into a joint venture agreement with Dell Displays, Inc.*fn3 for the negotiation and service of an airport advertising contract with the City of Chicago. The joint venture agreement provided that John and Robert Dell would do the advertising work at O'Hare Airport and that Bush's company (DAAI) would hold the contract with the city. The services Bush performed were minimal. Although he originally developed the advertising concept of a three-dimensional shadow box display case, the idea on which the contract was based, the Dells were to design the displays, sell them and find locations for them in the airport. The Dells assumed that Bush's contribution, in addition to the originating of the shadow box design, would be to promote the contract.*fn4
In the fall of 1961, as preparations were being made to submit a proposal to the City of Chicago for the display advertising concession at O'Hare, Bush had a conversation with Robert Dell concerning the use of his name in seeking the contract. Bush told Dell that his (Bush's) name should never be used in connection with any work regarding the airport contract. Subsequently, Bush introduced Robert Dell to William Downes, the Commissioner of Aviation. Neither at the time of the introduction nor at any later date did Bush advise Downes of his substantial interest in the advertising contract at the airport. When the formal proposal for the O'Hare advertising contract was submitted to the City of Chicago there was no mention or disclosure of Bush's interest in the contract.
Prior to the time that the display advertising concession contract for O'Hare was to be awarded, Bush several times spoke to John Duba, the Deputy Mayor and the informal chairman of the committee responsible for evaluating and awarding the O'Hare concession contracts, concerning the DAAI proposal. The first conversation between Duba and Bush regarding DAAI occurred in the summer or fall of 1961. At that time, Bush told Duba that DAAI was a reliable firm in the field of display advertising, that it was capable of carrying out a display advertising program at O'Hare, and that it was experienced in preparing displays. Two other similar conversations occurred during the summer or fall of 1961. At no time did Bush disclose to Duba that he had any interest in DAAI.
Late in 1961, Duba recommended to Mayor Daley that DAAI be awarded the display advertising contract at O'Hare. In making that recommendation, Duba considered DAAI's experience, the aesthetics of the proposed displays, the fact that DAAI was a local company, the amount of money that DAAI guaranteed to the city and the fact that Bush had recommended DAAI. Duba placed great weight on Bush's recommendation because of Bush's expertise in the field of public relations and advertising. In giving the recommendation, however, Bush did not specifically request that the contract be awarded to DAAI or ask for any special treatment.
Following Duba's recommendation to the mayor, William Downes, the Aviation Commissioner, recommended to the Chicago City Council that DAAI be awarded the O'Hare display advertising contract. On November 1, 1961, the City Council approved the awarding of the contract to DAAI.
In 1966, DAAI's contract with the City of Chicago expired. However, it was renewed on October 4, 1967 after renewal was recommended by the mayor and the commissioner of aviation. Prior to the renewal of the contract, however, Bush met with Commissioner Downes at O'Hare in approximately July, 1966. At that meeting, Bush and Downes discussed the appropriateness of placing an automobile display at a certain location in the airport terminal. Downes asked Bush for his judgment concerning the display. Bush responded that he thought the automobile display was a good idea, that it would make the location where it was to be placed more attractive, and that it probably would be good revenue producer. Bush also stated, "But I have no ideas [sic] of telling you this is good because it is a revenue producer, because I have no connection whatsoever with the company."
Between the time the city awarded the display advertising contract to DAAI in 1962 and the time the contract was renewed in 1967, Bush received $40,000 from DAAI. None of that money, however, went directly to him. Rather, DAAI checks, the proceeds of which were intended for Bush, were made payable to Information Consultants. The checks were sent to Arnie Matanky, a friend of Bush's who owned Information Consultants; and Matanky deposited each check in the Information Consultants' bank account. For each DAAI check received and deposited, Matanky would make out an Information Consultants' check payable to Earl Bush in the same amount as the DAAI check. Information Consultants never did any work or performed any services for DAAI and it never retained any of the money it received from DAAI. All of the money received was passed on to Bush.
As of approximately June, 1966, Bush's DAAI stock was still being held in the names of nominees. Sometime between June and September, 1966, Bush's attorney advised him that the stock should no longer be held by nominees. Bush responded that he knew the stock was being held by nominees and did not want it registered in his own name. On advice of legal counsel, Bush decided to establish a trust, and, on February 22, 1967, Bush's DAAI stock was transferred to Sebat Co., the nominee for Sears Bank & Trust Company. Bush was the settlor and income beneficiary of the trust and Sears Bank & Trust Company was the trustee. Bush had complete control over the transactions of the trust.
Shortly after the creation of the trust, DAAI, for the first time, began to pay dividends to Bush, its sole shareholder. The first dividend was paid in July, 1967. As with the earlier monies sent to Bush by DAAI, the proceeds of the DAAI dividend checks reached Bush by circuitous means. Thus, DAAI sent its dividend checks, made payable to Sebat Co., to Bush's attorney, Sidney Drury. Without making any bookkeeping entries or otherwise processing each check, Drury would then transmit each check to John Carbery, vice-president and trust officer at the Sears Bank & Trust Company. Each check so received by Carbery was then deposited into Bush's trust account. Between July, 1967, when DAAI first began paying dividends, and July, 1973, Bush received $162,000 from DAAI.
From the inception of his tenure as Mayor, Richard Daley established and disseminated to department heads and members of his staff, including Bush, certain standards of conduct. One of these standards was that every department head and staff member was prohibited from using his position as an employee of the City of Chicago to benefit personally. To emphasize this policy, Mayor Daley in 1972 required that all of his department heads and staff members who were required by law to file statements of economic interests with the Cook County Clerk file copies of such statements with the Mayor's Office. Bush was required by law, both in 1972 and 1973, to file statements of economic interests with the Clerk of Cook County.*fn5 Accordingly, he fell within those covered by the mayor's policy and, thus, was required to file copies of his interest statements with the Mayor's Office.
In June, 1972, Bush typed or caused to be typed a statement of economic interests. On that form, the word "none" was set forth in the places which called for disclosure of Bush's stock holdings in DAAI. Bush signed the statement and had it notarized. He then photocopied or otherwise duplicated that statement. Subsequently, Bush erased the words "none" which had been typed on the statement and in their place typed on a different typewriter the words "Dell Airport Advertising" and "stock." On June 29, 1972, Bush filed the altered document, which disclosed his DAAI interests, with the Office of the Cook County Clerk. He filed the photocopied or duplicated copy, which failed to disclose his DAAI interests, with the Mayor's Office.
On April 11, 1973, Bush filed a second statement of economic interests with the County Clerk's Office. Original typing appeared on the statement and in it Bush disclosed his DAAI interests. Bush also filed a statement of economic interests with the Mayor's Office, but that statement was not a copy or exact duplicate of the statement which he had filed with the County Clerk. Rather, it contained original typewriting and set forth the word "none" where "Dell Airport Advertising, Inc." and "stock" should have appeared. The typewriter which had ...