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United States v. Kaye

decided: May 16, 1977.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 74 CR 882. Alfred Y. Kirkland, Judge.

Before Bauer and Wood, Circuit Judges, and Sharp,*fn* District Judge.

Author: Wood

WOOD, Circuit Judge. Defendant-appellant David Kaye (hereinafter referred to as defendant) was convicted in a bench trial on a seventy-four count indictment of violation of 28 U.S.C. § 186(b)(1)*fn1 and 18 U.S.C. § 1962(c).*fn2 Defendant was sentenced to the custody of the Attorney General for two years on Count 1 which charged a violation of 18 U.S.C. § 1962(c). Defendant was also sentenced to three years probation consecutive to the two year prison sentence for violation of 29 U.S.C. § 186(b)(1) on Counts 2 through 74. The complained of acts occurred between October 28, 1969, to on or about June 21, 1974.

Defendant raises for our consideration the following questions on appeal: 1) whether 29 U.S.C. § 186(b)(1) is an "indictable offense" so as to qualify as racketeering activity within the meaning of 18 U.S.C. § 1961; 2) whether the Government proved that defendant was involved in a "pattern of racketeering activity" as that term is defined in 18 U.S.C. § 1961(5); 3) whether defendant acted "in the conduct of" the union's affairs when he committed the acts for which he was convicted; 4) whether defendant was a representative of employees or an employee of Local 714; 5) whether defendant acted with the requisite intent; and 6) whether defendant's conduct falls within an exception pursuant to § 186(c)(1).

For the following reasons, we affirm the lower court's decision.

Briefly, the facts are as follows.

Defendant was a member of Local 714 of Machinery, Scrap Iron Metal and Steel Chauffeurs, Warehousemen, Handlers, Helpers, Alloy Fabricators, Theatrical, Exposition, Convention and Trade Show Employees, International Brotherhood of Teamsters (hereinafter referred to as Local 714). Local 714 was the exclusive bargaining agent for temporary employees performing material handling and other work at trade shows, expositions, conventions and similar functions in the Chicago metropolitan area.

Defendant acted in several capacities for Local 714. First, defendant served as part-time business agent for Local 714 since 1971. Defendant received one hundred dollars a week for this work.

Defendant also acted as chief steward for the trade shows. Service contractors*fn3 contacted defendant in his capacity as chief steward to arrange for labor to perform tasks in relation to the trade shows and expositions. The position of chief steward did not receive compensation from either Local 714 or the service contractor. The position of chief steward was in no way connected to defendant's role as part-time business agent.

As chief steward, defendant selected union stewards for the trade shows. Defendant alone appointed the union stewards. If the work was to be conducted on one floor, one union steward would be appointed. If the work was conducted on separate floors or in different geographical locations, a union steward would be appointed for each work area. The position of union steward was separate from chief steward. The union steward was an employee of the service contractor who was paid at an hourly rate which was higher than the rest of the work crew.*fn4 The duties of the union steward included the following: protection of the jurisdiction of Local 714, handling payroll matters, checking crews in in the morning and checking crews out in the evening, investigating grievances, checking job safety, ensuring that work is done smoothly, and generally caring for the welfare of the men in the crew. Testimony by service contractors indicated that the union steward was expected to be physically at the job site. Absence from the job site was permitted with the approval of the employer as where the union steward was handling union business.

It was proper for defendant as chief steward to appoint himself to act as union steward for a particular job. Defendant's exercise of the right to appoint himself union steward led to the charges in this case. Generally stated, defendant was charged with accepting money from the service contractors for services as a union steward when defendant did not in fact provide such service. More specifically, defendant was charged in Counts 4 through 11 with placing himself on the payroll of service contractors as a union steward for trade shows held in Chicago when defendant was in fact absent Chicago. In addition, defendant was also charged with being carried on more than one payroll as union steward for the same hours on the same day when the jobs were in different geographic locations or on more than one floor in a building.

1) Section 186(b)(1) as an "indictable" offense.

Defendant argues that 29 U.S.C. § 186(b)(1) cannot be the basis for a violation of 18 U.S.C. § 1962(c) since violation of § 186(b)(1) is a misdemeanor. Section 1962(c) proscribes one form of racketeering activity. Section 1961(1)(c) dfines racketeering activity as:

any act which is indictable under Title 29, United States Code, section 186 (dealing with restrictions on payments and loans to labor organizations). . .

Defendant argues that misdemeanors were not intended to be within the scope of the meaning of "indictable". Thus, defendant contends that the legislature erroneously included § 186 as a form of racketeering activity and that § 186 should be stricken from the statute.

The district court agreed with defendant that the language in § 1961(1)(c) is inconsistent but rejected defendant's contention that § 186 should be stricken from § 1961(1)(c). The lower court held:

The wording of Section 1961(c) is patently inconsistent. The Court concludes that either Congress made a simple drafting error when it used the word "indictable" or, alternatively, Congress did not intend to punish any act proscribed by Section 186. According to the notes following Section 1961, it was the intent of Congress that the provisions of the Organized Crime Control Act of 1970 be liberally construed to effectuate its remedial purpose. That being so, it is clear to the Court that, by inclusion of Section 1961(c), Congress intended those activities proscribed by Section 186 to be punishable under Section 1962 irrespective of their designation as misdemeanors or felonies.

This court does not find the language in § 1961(1)(c) to be inconsistent since a misdemeanor as defined in 18 U.S.C. § 1(2)*fn5 can properly be prosecuted either by of indictment or information. See Fed.R.Crim.Pro. 7(a).*fn6 Thus, an act committed in violation of § 186(b)(1) is "indictable" as that word is used in § 1961(1)(c). There is no basis either in the legislative history of § 1961(1)(c) and § 186(b)(1) or in the statutory procedure authorizing use of an indictment for misdeameanor to support defendant's assertion that Congress erroneously included § 186 as a form of racketeering activity.*fn7

2) "Pattern of racketeering activity".

Defendant was charged with engaging in a "pattern of racketeering activity" in violation of 18 U.S.C. § 1962(c). Section 1961(5) ...

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