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United States v. McNary

April 29, 1980

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
JACK O. MCNARY, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 77 CR 1023; Bernard M. Decker, Judge.

Philip W. Tone, Circuit Judge, William J. Bauer, Circuit Judge, Dudley B. Bonsal, Senior Judge.*fn*

Order

In this unpublished order supplementing the published opinion filed in this case on this date, we address the remaining issues presented by the appellant for review on appeal from his conviction on two counts of violating the racketeer Influenced and Corrupt Organization (RICO) Act (18 U.S.C. § 1961 et seq.) and on one count of violating the Hobbs Act (18 U.S.C. § 1951). The facts of this case are fully set forth in the opinion and will there fore not be related here, except as necessary to an understanding of our disposition of the seven claims of error reviewed by this order. We affirm the convictions for the reasons set forth below.

I

Count III of the indictment charged the appellant with a violation of the Hobbs Act in that he used the power and authority of his position as Mayor of Lansing and president of the Board of Trustees of the Village to obtain, under color of official right, a payment of $20,010.98 from Richard Mook and Gordon Dicke, the developers of the Salem Cross apartment complex. McNary contends on appeal that the evidence at trial was insufficient to sustain the jury's verdict of guilty on Count III because Mook and Dicke, the victims of the appellant's extortion, did not maintain a reasonable belief that the power of McNary's office included the authority to determine or effectively control their right to building and occupancy permits for the Salem Cross apartment complex. We find this contention to be devoid of merit.

It is not disputed that the office of Mayor in the Village of Lansing does not have a de jure power to grant or withhold building and occupancy permits. E.g., Lansing Illinois Zoning Ordinance, Art. XII, §§ 12.6(a), 12.27 (1961). But it is the use of office to obtain payments which is the crux of the statutory requirement of "under color of official right," and where the motivation for the payment focuses on the recipient's office the conduct falls within the ambit of 18 U.S.C. § 1951. United States v. Kuta, 518 F.2d 947, 950 (7th Cir. 1975), cert. denied, 423 U.S. 1014 (1975). Thus, in order to find that the appellant acted under color of official right, the jury need not have concluded that McNary had actual de jure power to secure the grant of the permits so long as it found that Mook and Dicke held, and the appellant exploited, a reasonable belief that the Village system so operated that the power of McNary's office included the effective authority to determine the issuance of the permits. See, e.g., United States v. Mazzei, 521 F.2d 639 (3d Cir. 1975), cert. denied, 423 U.S. 1014 (1975).

We find the evidence sufficient to sustain the finding by the jury that Mook and Dicke reasonably believed that as a concomitant of his official position the appellant possessed effective power to determine the issuance of the permits. After Mook and Dicke submitted an application for the building permits, they became concerned over their rejection of McNary's bid for a subcontracting job on the Salem Cross project and met with Gerald Pals, a real estate broker and business associate of the appellant's, to discuss the matter. Pals then spoke with McNary and subsequently reported to Dicke that McNary wanted $20,000. Mook and Dicke then met with McNary and explained that the payment would not be available until financing was obtained for the project and that, in turn, the financing was contingent upon the issuance of the building permits. Mook inquired when they would receive the permits and McNary instructed them to see Pals to work it out. After the meeting McNary telephoned Pals and told him to prepare an agreement which would assure the $20,000 payment. Mook and Dicke thereafter signed two promissory notes totalling $20,000 and made the payment to McNary in three installments, the last of which was motivated by their concern over receiving occupancy permits for the project. Finally, both Mook and Dicke testified that they made the $20,000 payment to McNary only because of his position as Mayor, and their conversation with the Mayor in his office confirmed their belief that they payment was required to secure official village action for the issuance of the permits. Thus, the evidence showed that McNary exploited a reasonable belief of the victims of his extortion in the power of his office, and we accordingly affirm the conviction on Count III.

II

The appellant also argues that the evidence at trial was insufficient to establish that the property interests and monies he received in connection with the purchase and sale of the Salem Cross and Lansing Square properties were bribes as charged in Counts I and II of the indictment. McNary contends on appeal, as he did at trial, that he held a legitimate interest in these properties, that he did not perceive the properties or payments related to them as bribes, and that neither Pals nor anyone else had an intent to bribe him. We conclude that the evidence, both direct and circumstantial, was sufficient to sustain the jury's finding that these properties as well as the income and personal advantage derived therefrom were promised, tendered, and received as bribes in violation of the Illinois Bribery Statute.

As this Court stated in United States v. Isaacs, 493 F.2d 1124 (7th Cir. 1974), cert. denied, 417 U.S. 976 (1974):

Subsection 33-1(d) of the Illinois Bribery Statute provides that bribery occurs when property is accepted by a public official with knowledge that it is offered with intent to influence the performance of any act related to his public position. No particular act need be contemplated by offeror or offeree. There is bribery if the offer is made with intent that the offeree act favorably to the offeror when necessary.

493 F.2d at 1145. McNary contends the record is devoid of any intent to bribe him. In consideration of this contention, we turn to the evidence at trial concerning the conduct of Gerald Pals and Mayor McNary with respect to these two properties as the focal point for determining their respective mental states, knowledge, and complicity in the transactions. This evidence showed that the jury could have reasonably concluded that Pals' motivation in providing McNary with the financial resources to obtain or maintain his personal advantage in these two properties was predicated upon an intent to influence the performance of an official act and that Mayor McNary's motivation was predicated upon a corrupt intent to profit from these transactions.

McNary's involvement in these properties was governed by a pattern of concealment as indicated by the letters of direction, payments to intermediaries, and the non-disclosure of any interest in the properties on either his Statements of Economic Interests filed with the Village or his federal tax returns. As to the Salem Cross project, Pals testified that the reason McNary was involved was because of his official position as Mayor. Based on Pals' investment in the property McNary received a $25,000 profit from the proceeds of the sale of the property. Pals also advanced funds to facilitate McNary's investment in the Lansing Square project, and McNary received nearly $16,000 from the proceeds of the sale.

The evidence with respect to McNary's official conduct showed that immediately after the ZBA recommendation to deny rezoning for Parcel 2 at Salem Cross, Pals went to see McNary. McNary told Pals he would work it out. At a subsequent Board meeting, McNary introduced Harry Rodenburg and permitted him, contrary to the customary practice, to address the Board prior to the vote on the rezoning. The Board then approved the rezoning request, although it did not know that McNary was a silent partner with Rodenburg in Salem Cross. Similarly, after the Village Board ordered construction halted on the Lansing Square project, McNary unilaterally approved resumption of construction but failed to disclose his financial interest in the project to the Board. McNary testified that it never occurred to him that his interest in the property constituted a conflict of interest, ...


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