The opinion of the court was delivered by: Leighton, District Judge.
In this criminal prosecution, an eleven-count indictment charges six individuals and a corporation, all in one count and all or some in other counts, with conspiracy to make, and with having made fraudulent statements, false representations to, and having concealed material matters from a governmental agency; and with violations of the Mail Fraud Act. Defendants have jointly filed 47 pretrial motions, 14 of them directed against the indictment because of alleged defects of form and substance.
In one motion to dismiss, supported by memoranda, exhibits and affidavits, defendants alleged that the grand jury which returned this indictment had an unauthorized person in the grand jury room. They allege that while Bingham Kennedy acted as a Special Attorney for the Department of Justice presenting the government's case to the grand jury, he was at the same time on the staff of the Environmental Protection Agency, the complaining party in the criminal charges being investigated; that he was in the employ of the agency, and represented it in administrative proceedings in which the corporate defendant was a party; and that he became an important witness who alternated his position from that of a prosecutor to that of a person who testified and furnished evidence on which the grand jury returned the indictment in this case. These serious allegations, and the nature of the government's response to them, led this court to conclude that an evidentiary hearing was required. Accordingly, a hearing has been had at which witnesses have testified and a large number of exhibits have been offered and received.*fn1 The issue that arises is whether the evidence adduced requires dismissal of this indictment.
Velsicol Chemical Corporation is engaged in the production, distribution, and sale of various pesticide chemicals, including heptachlor and chlordane, of which in this country it is the sole manufacturer. The national distribution, sale, and use of pesticide chemicals is regulated by the United States Environmental Protection Agency that functions pursuant to certain federal laws. The most important of these are the Federal Insecticide, Fungicide, and Rodenticide Act, amended in October 1972, 7 U.S.C. s 136, Et seq., and ss 408, 409 of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. ss 346a, 348.*fn2 A pesticide chemical cannot be manufactured, distributed or sold within the United States without being registered with the Administrator of EPA upon compliance with the requirements of FIFRA. The same statute governs the cancellation and suspension of registered pesticide chemicals; and in section 6(a)(2), it is provided that "(i)f at any time after the registration of a pesticide the registrant has additional factual information regarding unreasonable adverse effects on the environment of the pesticide, he shall submit such information to the Administrator." 7 U.S.C. s 136d(a)(2). Sections 408 and 409 of the Federal Food, Drug and Cosmetic Act regulate the tolerance that is permitted in the use of a pesticide chemical, in or on a raw agricultural commodity. These provisions require that a petitioner for the tolerance established by the Administrator of EPA furnish data, including reports of investigations made with respect to the safety of a pesticide chemical. 21 U.S.C. s 346a(d)(1)(C). A petition for a food additive tolerance must "contain full reports of investigations made with respect to the safety for use of such additive, including full information as to the methods and controls used in conducting such investigations." 21 U.S.C. s 348(b)(2)(E).
In 1971, in fact for a long time before and throughout the period alleged in this indictment, heptachlor and chlordane were registered by the Administrator of EPA for distribution and sale in the United States. Defendants Harvey S. Gold, Charles J. Calo, John C. Tapas, Kenneth L. Schulz, and Neil R. Mitchell were Velsicol executives, all of them acquainted with and having varying degrees of responsibilities for the corporation's compliance with the regulatory requirements of FIFRA as they pertain to the registration of heptachlor and chlordane. Defendant Bernard H. Lorant, during the same time, was a Velsicol attorney similarly involved.
Sometime in June 1971, at EPA's suggestion and in order to answer questions concerning whether heptachlor was tumorigenic or carcinogenic in man or laboratory animals, Velsicol entered into an agreement with the International Research and Development Corporation of Mattawan, Michigan*fn3 for the administration of an 18 month feeding study in mice using a mixture of heptachlor and hetachlor epoxide, a metabolite of heptachlor. Later that year, in December 1971, Velsicol again contracted with IRDC for the administration of a similar 18 month feeding study in mice for chlordane. Slides from some two thousand animals were involved in the studies. IRDC made reports; and thereafter, between December 1972 and January 1973, Velsicol retained two consulting pathologists, Dr. John Rust of the University of Chicago and Dr. Paul Newberne of the Massachusetts Institute of Technology, to examine slides of liver tissues from mice used in the heptachlor and chlordane studies. In a report to Velsicol dated December 29, 1972, Dr. Rust, from a review of 50 IRDC slides, concluded "it is quite clear that the test animals were subjected to a severe hepatoxin and carcinogen." In a report completed at approximately the same time, Dr. Newberne found among 22 IRDC slides he examined "liver cell carcinomas."*fn4
On October 15, 1973, in the course of an administrative proceeding, Velsicol submitted to EPA a copy of IRDC's final report concerning the feeding study of mice in which heptachlor had been used. This "show(ed) a compound-related incidence of nodular hyperplasia of the liver but no induction of cancer." In the same month that this report was given to EPA, Velsicol employed Dr. William MacDonald of the University of Miami in Coral Gables, Florida, a consulting toxicologist, to examine for tumorigenicity all of the IRDC slides from the carcinogenicity study of heptachlor. In September 1974, Dr. MacDonald's employment was extended to include an examination for tumorigenicity of all IRDC slides from the carcinogenicity study of chlordane. IRDC's final report of its carcinogenicity study on chlordane was received by Velsicol during the month of December 1973. In the months of June and October 1974, Dr. MacDonald reported to Velsicol that many of the IRDC slides from mice that had been fed heptachlor showed tumors or pre-tumorous lesions; during January 1975, he reported that many of the slides from mice fed chlordane showed tumors or pre-tumorous lesions, and that both heptachlor and chlordane were liver tumorigens. Velsicol did not give EPA any of the Rust-Newberne-MacDonald reports.
Sometime during the month of February 1975, William E. Reukauf, lead EPA counsel in the administrative proceedings to cancel the registration of heptachlor and chlordane that had been pending since November 1974, had a conversation with a government consultant who suggested that Velsicol be asked whether other pathologists had examined some of the IRDC slides. Reukauf immediately wrote to Velsicol's lawyers and inquired. Then, an exchange of letters informed Reukauf of the fact that Drs. Rust, Newberne, and MacDonald had made such examinations; and on June 10, 1975 he was sent copies of the Rust-Newberne reports with the promise he would be furnished with a copy of the one made by Dr. MacDonald. Two days later, Reukauf sent a memorandum to the general counsel of EPA informing him of the discovery that other pathologists had looked at selected slides from the IRDC study and had furnished Velsicol with data adverse to the continued registration of heptachlor and chlordane. Reukauf, without having made any other inquiry or investigation, expressed the view "that Velsicol has violated section 6(a)(2) of FIFRA if they did not inform the Agency of these data." He quoted the words of the section and said, "I believe we should consider utilizing the criminal sanctions provided for in FIFRA. (Sec. 14(b)(1).)" A month later, expanding on Reukauf's memorandum, but also without any further inquiry or investigation, the General Counsel of EPA referred the matter to the Department of Justice recommending criminal prosecution of "(Velsicol) and its appropriate officers and employees" for the violations of FIFRA which he believed occurred when the data contained in the Rust-Newberne-MacDonald reports was not submitted to the Administrator of EPA.
At the time of this referral, Bingham Kennedy was a lawyer on the General Counsel's staff. He joined the agency on March 13, 1975, and from then throughout the grand jury investigation of this case, he was in touch with the administrative proceedings in which EPA was seeking cancellation or interim suspension of the registrations of heptachlor and chlordane. At issue in those proceedings, in fact central in them, was the alleged carcinogenicity or tumorigenicity of the two pesticides. The lawyers who there represented EPA were Kennedy's immediate superiors in the Pesticide Division, with an associate of his as lead counsel. Then early in February 1976, there were three important resignations from the General Counsel's staff; therefore, Kennedy temporarily filled the position of Deputy Associate General Counsel for administrative litigation. In that capacity he supervised attorneys for the Pesticide Division then handling the heptachlor/chlordane case.
On August 22, 1975, Kennedy was relieved of all responsibilities in the administrative proceedings and assigned to work on the Velsicol criminal referral. He was told that the agency was dissatisfied with the pace at which the Department of Justice was proceeding with the matter, and that his superiors desired that an indictment against Velsicol and its appropriate employees be expeditiously obtained. Kennedy immediately dropped all other agency work, and between August 22 and 29, without any further investigation and with limited knowledge of the factual and legal matters involved, prepared drafts of an indictment. With the exception of a change in legal theory, and the upgrading of misdemeanor charges to felony accusations, the indictment drafts prepared by Kennedy were similar to the indictment returned in this case. After receiving approval of the Department of Justice and in order to expedite transfer of the case to this district, Kennedy travelled by plane to Chicago and delivered the department's referral letter and proposed form of indictments to the first Assistant United States Attorney in this district who docketed the matter, naming Kennedy as the case agent. On September 19, 1975, after he was sworn as a witness and a grand jury agent, Kennedy, at the request of the EPA,*fn5 was appointed a Special Attorney in the United States Department of Justice in order that he could participate as a prosecutor in the Velsicol criminal investigation in this district. His EPA superiors considered his assignment to the investigation a significant manpower sacrifice by the Pesticide Division; they agreed that his participation as a lawyer from the agency was indispensable; the lead counsel in the administrative proceedings against Velsicol viewed Kennedy as the EPA contact with the Department of Justice in the criminal investigation that produced the indictment in this case.
Throughout the time he served as this contact, Kennedy remained an EPA staff attorney. He was paid by the agency; his professional advancement and non-automatic salary increases depended on evaluations he received from his superiors, the officials who made the criminal referral and who were conducting administrative proceedings against Velsicol. His travel expenses between Chicago and the District of Columbia as a Special Attorney for the Department of Justice in the grand jury investigation were borne by EPA, approved by his superiors in the Office of the General Counsel. He continued to maintain an office in the EPA headquarters in the District of Columbia. He frequently transported grand jury documents from Chicago to review in the office he occupied within the Pesticide Division, immediately adjacent to those used by attorneys who were handling the administrative proceedings against Velsicol.
He shared secretarial services with one of the attorneys involved in the administrative case. The volume of documents he sometimes took to EPA headquarters was so great that he was required to move them in cartons. At no time did any responsible EPA official issue any order or memorandum that isolated Kennedy from the other staff lawyers in the Office of the General Counsel. During the same period, he served as a member of a working group created by EPA, and represented EPA at a meeting that concerned a contract between the agency and the National Academy of Sciences, a contract related to an administrative proceeding against Velsicol and concerning heptachlor/chlordane; he represented the agency at a meeting with representatives of the National Agricultural Chemicals Association at which was discussed the meaning of a regulation promulgated by EPA under section 6(a)(2) of FIFRA, the section of the statute involved in this case. The Department of Justice considered the financial arrangement between Kennedy and his agency an appropriate one because in its opinion "Mr. Kennedy's activities in support of the United States Attorney have been concerned strictly with the interests of EPA."
Kennedy first worked with the regular September 1975 Grand Jury; and then with the special one that began meeting in June 1976 to investigate this case, and which returned the indictment now at issue. He appeared as a prosecutor before the latter grand jury on 30 to 40 of the 47 days it met. At times, he was the only government attorney with the grand jurors in the grand jury room. As a Special Attorney for the Department of Justice, Kennedy participated in the examination of a majority of the witnesses who testified. On some occasions, he alone examined the witnesses; and on others, he assisted Mr. Robert L. Herbst, his co-prosecutor, in the examination. In addition to his recorded statements in the grand jury room, Kennedy in his role as a prosecutor talked with grand jurors and made remarks that were not made part of the record or transcribed. At the outset of their investigation, he briefed the grand jurors on the general subject matter under investigation. And during the course of the hearings, individual grand jurors approached him asking factual questions which he answered outside the presence of a court reporter.
Sometime in 1977, it was decided that Kennedy would become a witness before the grand jury. Herbst, the co-prosecutor, wanted Kennedy to testify because of his acquired familiarity with the documents which had been received through subpoena and on request. Kennedy's knowledge of EPA procedures, policies, regulations, and statutes made him an ideal witness. The prosecutors wanted a witness who could testify in the final stages of the investigation, fill perceived gaps in the evidence previously presented to the grand jury, and thus justify return of the indictment in the case. Herbst viewed Kennedy's testimony as the substitute for that ordinarily given a grand jury by an investigative case agent.
Other than these considerations, there was no particularized need for Kennedy to appear as a grand jury witness. The decision that he testify was not the result of any exigent circumstance; instead, it was a convenient way by which the prosecutors could place important evidence before the grand jury. It was Herbst, the Assistant United States Attorney in the case, who decided that Kennedy was to assume the role of a witness. Although this course of action was planned over a period of time, neither Kennedy nor Herbst sought or received the approval of a superior in the United States Attorney's office in this district, or one in the Department of Justice. Herbst did not research, or take any step to have anyone else research, the propriety of a prosecutor remaining in that role and appearing as a witness before a grand jury.
Kennedy first appeared as a grand jury witness on November 10, 1977. He testified again on six occasions thereafter. With the exception of his appearance on the afternoon of November 10 and December 1, 1976, he was formally resworn each time he took the stand as a witness. He was reminded on several occasions by Herbst that he was testifying under oath. Between and after his appearances as a sworn witness, Kennedy reappeared before the same grand jury as a prosecutor. Having testified as a witness on November 10, 16, 21 and on the morning of November 30, Kennedy appeared the afternoon of November 30 as a prosecutor and conducted the examination of an important witness. Having returned and testified as a witness on December 1 and 12, 1976, Kennedy resumed his role as a prosecutor to present the indictment to the same grand jurors who had heard him testify under oath.
During the last eight weeks of the grand jury sessions, Kennedy appeared more frequently, and testified at greater length, than any other grand jury witness. His testimony was extensive and touched on substantive aspects of the government's case; it tracked the organization of the indictment which was to be returned. He was asked questions by Herbst that emphasized his personal knowledge of the facts and the importance of his credibility. He gave details that covered each paragraph of the indictment which the government was seeking against the defendants. Under oath, he gave the jury critical background information about the history of federal pesticides regulations, testimony that sought to paint the essentials of, and lend significance to, the studies on heptachlor and chlordane that gave rise to the charges the grand jury was investigating. His testimony touched on the mental state of the individuals whose conduct was under investigation; it covered the areas on which the government predicated its theory for the indictment it was seeking. Kennedy gave his opinion under oath concerning information contained in vital documents, and stated his opinion concerning facts which imputed the state of mind and motive of the individual defendants later named in the indictment proposed by the government. His testimony covered facts and events outside the record before the grand jury. He described under oath the results of his review of EPA files which were not subpoenaed by the grand jury. He swore to the substance of conversations he had with several EPA officials who were not called to testify. Then, on December 12, 1977, he appeared as the last witness; and immediately thereafter, while he remained in the presence of the grand jurors, Herbst read the indictment which had been prepared by him and Kennedy. The grand jury deliberated between 10 and 20 minutes and voted as a true bill the 11 count indictment that named Velsicol and the six individual defendants and charged three felonies the grand jury had investigated for 18 months.
From these facts, defendants argue that the indictment in this case must be dismissed because during the deliberations of the grand jury that returned it there was an unauthorized person in the grand jury room. They insist that the Fifth Amendment to the United States Constitution which provides that "(n)o person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, . . ." guarantees to all persons the protection of a fair and impartial grand jury; that this fairness and impartiality cannot be achieved in the absence of independent, unbiased prosecutors, ones who do not labor under a conflict of interest; that if a prosecutor while presenting the government's case to a grand jury labors under a conflict of interest, he is an unauthorized person in the grand jury room; and his presence there will void any resulting indictment. Defendants contend that Bingham Kennedy had roles that were many and conflicting during the grand jury investigation in this case: he was an EPA staff lawyer, a grand jury case agent, a Special Attorney for the Department of Justice; and he was a witness who before the same grand jury alternated between being a prosecutor and being an important witness. Thus, he labored under a conflict of interest that made him an unauthorized person in the grand jury room, one whose presence there voids the indictment in this case.
Defendants are careful to point out that they do not claim application of a Per se rule which would bar an agency lawyer from serving as an attorney for the government in the presentation of evidence to a grand jury. They claim, however, that when Kennedy's initial involvement in this criminal investigation is considered in the light of orders given him by superiors within his agency; his involvement before and during the criminal investigation in ongoing administrative proceedings conducted by EPA against the corporate defendant in this case, Velsicol; his participation, directly, indirectly, or peripherally in those administrative proceedings while he was acting as a Special Attorney for the Department of Justice presenting evidence before the grand jury; his personal bias against defendants demonstrated by his efforts to countermand decisions of the United States Attorney for this district; and finally, his role as an important ...