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UNITED STATES v. COSTELLO

June 10, 1985

UNITED STATES, PLAINTIFFS,
v.
JAMES COSTELLO AND WAYNE OLSON, DEFENDANTS.



The opinion of the court was delivered by: Roszkowski, District Judge.

      ORDER

Before the court are defendants, Wayne W. Olson's and James J. Costello's, joint motion to suppress the government's Title III surveillance, and defendant, James J. Costello's, motion for relief with respect to certain consensual recordings. As set forth in this court's August 31, 1984 order, the instant fifty-five count indictment charges the defendants with violations of the mail fraud statute, 18 U.S.C. § 1341 (1982), the Hobbs Act, 18 U.S.C. § 1951 (1982), and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(d) (1982). For the reasons set forth herein, the defendants' motions are denied.

I. BACKGROUND

The instant indictment arose from a joint state and federal investigation of judicial corruption in the Chicago metropolitan area. On November 26, 1980, the United States Attorney applied for authorization to intercept the oral communications of Judge Wayne Olson, Attorney James J. Costello, another named attorney and "others as yet unknown" occurring in the judge's chambers at Branch 57 of the Circuit Court of Cook County, Illinois. The application sought to intercept communications concerning the solicitation and payment of bribes to influence the referral of, outcome of and eventual disposition of, criminal cases pending before Judge Olson.

The sole affidavit supplied in support of the application for the Title III surveillance was executed by Randall L. Jordan, a Special Agent with the Federal Bureau of Investigation. For the two and one-half years preceding the application, Jordan had been primarily assigned to the investigation of the judiciary in the Chicago metropolitan area (code named operation "Greylord"). The information provided in Jordan's affidavit was derived from three principal sources: (1) Jordan's general experience as an F.B.I. agent, (2) consensual recordings and observations provided by Terry Hake, an undercover agent posing as an Assistant Cook County State's Attorney assigned to Judge Olson's courtroom, and (3) information provided by a Confidential Source, an attorney who had practiced in the criminal courts of Cook County for many years.

On the same day the application was made, former Chief Judge James Parsons issued an order authorizing the surveillance for a period of thirty days. The surveillance commenced on December 1, 1980. On December 19, 1980, the government requested and was granted a thirty day extension. On January 20, 1981, the surveillance was discontinued.

Defendants jointly move to suppress the Title III surveillance contending: (1) the November 26, 1980 authorization was invalid because it was unsupported by probable cause; (2) the November 26, 1980 authorization was invalid because it was based upon false information which Agent Jordan knew was false, or, at the very least, presented with reckless disregard for its truth or falsity; (3) the November 26, 1980 authorization was invalid because the government failed to adequately explain the necessity for electronic surveillance; (4) the November 26, 1980 and December 19, 1980 authorizations were invalid because they were overly broad and the conduct of the surveillance was too intrusive; and (5) the December 19, 1980 application was invalid because it was based upon illegally obtained evidence and the intentional misrepresentation of a material fact. In addition, defendant, Costello, moves to quash the consensual recordings of his conversations with Terry Hake on the grounds that the scope and duration of those recordings violated the Fourth Amendment, and moves to bar Hake from testifying on the grounds that Hake's testimony would violate his attorney-client privilege.

On April 25 and 26, 1985, this court heard testimony concerning the adequacy of the measures taken by the government with respect to minimization. On April 29, 1985 the court heard oral arguments on the issues of minimization, the necessity for electronic surveillance and the need to hold a Franks hearing. No further briefing was deemed necessary.

II. DISCUSSION

A. Probable Cause for the November 26, 1980
        Authorization

Even assuming the allegations set forth in Agent Jordan's original affidavit are true, defendants initially contend there was no probable cause for the November 26, 1980 authorization. Specifically, defendants contend Costello's consensually recorded remarks were mere "rainmaking", manifestly unreliable and not adequately corroborated by the remaining facts set forth in Jordan's affidavit. Moreover, defendants contend the information supplied by the government's Confidential Source was stale. Finally, the defendants contend the Confidential Source's reliability was not adequately demonstrated by Jordan's affidavit.

Viewing Agent Jordan's affidavit in light of the considerations set forth above, this court finds that former Chief Judge Parsons had a more than adequate basis for determining that probable cause existed to initiate a Title III search. Jordan's lengthy affidavit devoted twenty-three pages to the facts and circumstances upon which probable cause was believed to exist. It is unnecessary to recite all of the facts set forth in Jordan's affidavit. A relatively brief overview, however, is instructive.

Jordan's affidavit begins by reciting the activities of James Costello, a criminal defense attorney regularly practicing in Judge Olson's courtroom. Costello unknowingly provided Terry Hake with a detailed description of corrupt activities in Judge Olson's Courtroom. Specifically, on at least sixteen occasions, Costello admitted to having bribed Judge Olson in return for case referrals and favorable dispositions of cases.*fn1 In addition, on numerous other occasions, Costello identified other attorneys who he indicated were also bribing Judge Olson.*fn2

Jordan's affidavit also sets forth the observations of an undisclosed Confidential Source, an attorney practicing for many years in the Cook County criminal courts. (¶ 35) In October, 1975, the Confidential Source told the F.B.I. that on three separate occasions he had paid a total of $2,500 to Judge Olson's clerk in order to secure favorable dispositions on cases that he had pending before Judge Olson; on each occasion, the Confidential Source indicated Judge Olson did, in fact, render favorable treatment to his clients. (¶ 36) On May 21, 1980, the Confidential Source told Agent Jordan that other defense attorneys had informed him that Judge Olson was still accepting bribes in return for favorable treatment in Branch 57. (¶ 37) If a lawyer was not known to Judge Olson, the Confidential Source was told the lawyer could go to the Judge's clerk. On June 18, 1980, the Confidential Source advised Jordan that he had recently had a conversation with Judge Olson's former clerk, the one he had paid in 1975. (¶ 380 The Confidential Source asked Judge Olson's former clerk who an attorney should see about making a bribe in a case pending before Judge Olson. Judge Olson's former clerk allegedly told the Confidential Source to "see [him] first" because he was still very close to Judge Olson. Finally, on September 15, 1980, based upon information received from other defense lawyers, the Confidential Source informed Jordan that Judge Olson no longer had a regular "bagman" and was accepting bribes directly from defense lawyers. (¶ 39)

Apart from the information provided by Costello and the Confidential Source, the affidavit contains Hake's own direct observations. On June 3, 1980, Hake observed an attorney attempting to give money to Judge Olson's clerk; the clerk noticed that Hake had seen the offer and declined the money at that time. (¶ 43) Hake was also able to observe Costello entering and exiting Judge Olson's chambers, able to observe Judge Olson actually referring cases to Costello, and, on numerous occasions, was himself actually the recipient of Costello's bribes.*fn3

In addition, Hake was able to observe the actions of numerous other attorneys, which, in light of the other facts known to him, were consistent with criminal behavior. For example, Hake was informed by two police officers that one attorney, Attorney # 10,*fn4 attempted to bribe them in a particular case. (¶ 46) Despite the officers' refusal to accept the bribe, the attorney's motion to suppress was granted by Judge Olson. (Id.) Costello later informed Hake that Judge Olson had received the money the police officers refused. (Id.) Subsequently, Judge Olson called Hake into his chambers on two occasions to discuss Hake's intentions with respect to an appeal. (¶ 47) Costello advised Hake that Judge Olson was worried about an appeal and that the defense attorney handling the case was willing to pay Hake $100 not to appeal (¶ 48); Hake eventually accepted the bribe and the bribe was subsequently acknowledged by Attorney # 10. (¶¶ 51 and 52)

Finally, Jordan's sources corroborated one another's information with respect to numerous details. For example, the Confidential Source's information coincided with the information provided by Costello concerning the way in which he originally began bribing Judge Olson; Costello told Hake that he began bribing Judge Olson by approaching Judge Olson's clerk (who's first name corresponded with that given by the Confidential Source) and asking him to give money to the Judge. (¶ 17) Moreover, the Confidential Source's information concerning the transfer of Judge Olson's clerk and Judge Olson's subsequent direct acceptance of bribes was corroborated by Costello. On August 8, 1980, Costello told Hake that about two months earlier Judge Olson's clerk was transferred out of Branch 57; after the transfer, Costello told Hake he went directly to Judge Olson to make his payments. (¶ 17)

In addition, Jordan's sources' information was corroborated by one another with respect to other details. For example, the Confidential Source identified another defense attorney, Attorney # 2, as the individual who introduced him to the system of fixing cases and as one of several attorneys who were bribing Judge Olson in 1975. (¶ 36) In April, 1980, Hake was informed by the assistant state's attorney preceding him at Branch 57 that, on a day that Judge Olson was not presiding at Branch 57, Attorney # 2 had offered to split the bond money on one of his client's cases if the assistant state's attorney would dismiss the case; the assistant state's attorney informed Hake that the offer surprised him because Attorney # 2 regularly practiced before Judge Olson and seemed to do well when Judge Olson was presiding. (¶ 42) In addition, Hake observed that Attorney # 2 frequented Branch 57 and had seen the attorney with Judge Olson in his chambers. (¶ 53). Finally, Costello informed Hake that Attorney # 2 bribed him for cooperative testimony when Costello was a police officer and strongly inferred that Attorney # 2 was presently bribing Judge Olson. (¶ 45)

Taken as a whole, this court concludes that the information described above, in addition to the other information set forth in Jordan's affidavit, provided Judge Parsons with a more than adequate basis for determining there was probable cause to believe illegal payments were taking place in Judge Olson's chambers at Branch 57. The defendants contend, however, that the information provided in the affidavit was insufficient to warrant a finding of probable cause. As noted previously, defendants contend Costello's statements constituted manifestly unreliable "rainmaking" aimed at intimidating or demoralizing Hake, that the Confidential Source's information was stale, and that the facts contained in Jordan's affidavit regarding the Confidential Source's "track record" were insufficient to demonstrate his credibility.

This court is unpersuaded by the defendants' contention that Judge Parsons was bound to conclude Costello's statements constituted manifestly unreliable "rainmaking". In support of their position, defendants urge this court to apply the two prong test set forth in Spinelli v. United States, 393 U.S. 410, 412-13, 89 S.Ct. 584, 586-87, 21 L.Ed.2d 637 (1969) and Aguilar v. State of Texas, 378 U.S. 108, 114-15, 84 S.Ct. 1509, 1514, 12 L.Ed.2d 723 (1964); those decisions require an affidavit based upon information provided by someone other than the affiant to set forth facts demonstrating: (1) the basis of the hearsay declarant's knowledge concerning the subject criminal activity and (2) the veracity, credibility and reliability of the declarant. Id.

The separate two prong test set forth in Spinelli and Aguilar, however, no longer controls. In Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983), the Supreme Court held that while "an informant's `veracity', `reliability' and `basis of knowledge' are all highly relevant in determining the value of his report . . . these elements should [not] be understood as entirely separate and independent requirements to be rigidly exacted in every case." 103 S.Ct. at 2327-28. Rather, the Court recognized that a totality of the circumstances approach was proper "where a deficiency in one [of the these elements] may be compensated for, in determining the overall reliability of the tip, by a strong showing as to the other, or by some other indicia of reliability". 103 S.Ct. at 2329.*fn5

Whether applying Spinelli and Aguilar or Gates to the facts of the present case, this court finds Costello's statements to Hake were not manifestly unreliable "rainmaking". Whether considered as a separate factor or simply as a relevant consideration, there cannot be any genuine disagreement that Costello's remarks demonstrated a basis of knowledge concerning the subject of the Title III surveillance. Costello admitted to having directly bribed Judge Olson. Thus, he certainly had a basis of knowledge regarding the nature and scope of the asserted corruption. The only real issue, therefore, is Costello's credibility and the reliability of his statements.

In the view of this court, the reliability of Costello's statements is adequately established in the affidavit. First, Costello's numerous detailed statements tend to make his information reliable. United States v. Unger, 469 F.2d 1283, 1286-87 (7th Cir. 1972) cert. denied, 411 U.S. 920, 93 S.Ct. 1546, 36 L.Ed.2d 313 (1973) and United States v. Roman, 451 F.2d 579, 581 (4th Cir. 1971) cert. denied 405 U.S. 963, 92 S.Ct. 1171, 31 L.Ed.2d 239 (1972). See also Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 2329-30, 76 L.Ed.2d 527 (1983) ("even if we entertain some doubt as to an informant's motives, his explicit and detailed description of alleged wrongdoing, along with a statement that the event was observed first hand entitles his tip to greater weight than might otherwise be the case.") In the present case, Costello provided the history and details of his illegal relationship with Judge Olson, the times, places and amounts of his various bribes, and even attributed specific quotes and remarks to Judge Olson.*fn6 Thus, the content of his remarks alone strengthen his credibility and the reliability of his information.

Second, the fact that many of Costello's statements were directly against his penal interest added to his credibility. United States v. Harris, 403 U.S. 573, 583-85, 91 S.Ct. 2075, 2081-82, 29 L.Ed.2d 723 (1971) Despite the defendants' contention to the contrary, the fact that Costello was unaware that he was making the statements to an undercover agent does not alter the penal nature of his remarks. United States v. Lang, 589 F.2d 92, 97 (2nd Cir. 1978) Thus, the nature of Costello's statements and the circumstances under which he made the statements further support their reliability.

Third, as has been noted previously, many of Costello's statements were corroborated by the Confidential Source's information and Hake's observations. Costello's description of the formation of his corrupt relationship with Judge Olson corresponded to the Confidential Source's description of Judge Olson's method of operation. Similarly, Hake's observations concerning Costello's contact with Judge Olson and receipt of referrals corroborated Costello's remarks.

Finally, the mere fact that the defendants can construct an "innocent" explanation for many of Costello's remarks does not prohibit a finding of probable cause. United States v. Anton, 633 F.2d 1252, 1254 (7th Cir. 1980); see also United States v. Dorfman, 542 F. Supp. 345, 359 (N.D.Ill. 1982) aff'd. Sub. nom. United States v. Williams, 737 F.2d 594 (7th Cir. 1984) ("Even if there is an innocent explanation, as long as there is a reasonable probability that there is criminal activity afoot . . . probable cause is present.") While the possibility existed that Costello's statements to Hake consisted of "mere rainmaking", this court cannot conclude Judge Parsons was required to adopt such an innocent construction. The defendants' contention that Costello's statements were manifestly unreliable is, therefore, rejected.

Similarly, this court rejects the notion that the Confidential Source's information was stale. The material information provided by the Confidential Source was provided in May, June and September of 1980. The information provided from 1975 was of very limited importance.

And finally, this court rejects the defendants' contention that the Confidential Source's reliability was not adequately shown. Jordan's affidavit disclosed that the Confidential Source had provided information to the F.B.I. on twenty occasions, that the information he provided had been corroborated on at least eight occasions by tape recorded conversations, that other information had been corroborated by independent investigations or other reliable sources, and that his information had never been found to be erroneous or inaccurate. Moreover, as was previously noted, much of the information he provided was "cross corroborated" in the affidavit by Costello and Hake. United States v. Fina, 405 F. Supp. 267, 271 (E.D.Pa. 1975). Under the totality of the circumstances approach adopted in Gates, this information was adequate to establish the reliability of the Confidential Source.

In sum, examining the affidavit as a whole and affording Judge Parsons the deference due to him under the case law, this court cannot conclude his determination that probable cause existed to issue the Title III authorization was erroneous. Jordan's affidavit provided Judge Parsons with adequate information to make a determination concerning probable cause. Under these circumstances, this court cannot hold that decision was improper.

B. The Need for a Franks Hearing
        with Respect to the November 26, 1980 Application
  In Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57
L.Ed.2d 667 (1978), the Supreme Court held that:

   . . Where the defendant makes a substantial
  preliminary showing that a false statement
  knowingly and intentionally, or with reckless
  disregard for the truth, was included by the
  affiant in the warrant affidavit, and if the
  alleged false statement is necessary to the
  finding of probable cause, the Fourth Amendment,
  requires that a hearing be held at the
  defendant's request. Id. at 155-56, 98 S.Ct. at
  2676.

Consistent with these requirements, the Court made clear that an affidavit supporting an application for a search warrant is presumed to be valid. Id. at 171, 98 S.Ct. at 2684.

In order to overcome Franks' presumption of validity and make the requisite preliminary showing, a defendant must provide substantial evidence that the affiant knew his allegations to be false, that he actually entertained substantial doubts as to the truth of the information, or that he had obvious reasons to doubt its veracity. United States v. Reed, 726 F.2d 339, 342 (7th Cir. 1984) Moreover, a mere assertion that a Franks violation has occurred is not enough; competent evidence, not self serving statements, is required. United States v. Barrienta, No. 84-147 (7th Cir. March 28, 1985), Slip. op. at 12-13; United States v. Askins, 351 F. Supp. 408, 413 (D.Md. 1972) Finally, mere mistakes are not necessarily evidence of knowing, intentional or reckless conduct. United States v. Dorfman, 542 F. Supp. 345, 369 (N.D.Ill. 1982) aff'd sub. nom., United States v. Williams, 737 F.2d 594 (7th Cir. 1984).

While the Supreme Court's decision in Franks dealt only with affirmative misrepresentations, Franks has been logically extended to material omissions as well. Id. at 367-70 aff'd sub. nom. 737 F.2d at 604. In order for an omission to be material, the defendant must prove that if the fact were included in the affidavit, the affidavit would not support a finding of probable cause. Id. Franks requirement of knowing, intentional or reckless conduct is also present. Id.; United States v. Martin, 615 F.2d 318, 329 (5th Cir. 1980)

1. The Statement Contained in Paragraph 21

Defendants point out that the transcript of the September 9, 1980 conversation between Hake and Costello does not support the statement in ¶ 21 that Costello bribed Judge Olson in the Judge's chambers. Moreover, defendants contend the transcript of that conversation reveals that all future payments between Costello and Judge Olson were going to take place at a restaurant (Jean's) rather than in the Judge's chambers. Indeed, in their memorandum in opposition to the defendants' motion, the government admits:

  This transcript indicates that Olson wanted
  Costello to pay him at Jean's on Fridays. It also
  indicates that Costello disagreed with that
  arrangement and would `rather go back there
  [chambers].' This transcript confirms that past
  payments took place in chambers and establishes
  some uncertainty as to where future payments will
  take place. Id. at 54-55 (emphasis added)

In the view of this court, the alleged misrepresentation in paragraph twenty-one was not material to the finding of probable cause. Even without the "misrepresentation" in ¶ 21, there were numerous examples of bribes to Judge Olson in chambers reported to Hake by Costello. Thus, the inclusion of one additional incident was not dispositive.

Moreover, the substitution of the accurate information concerning the site of future payments would not have prevented the authorization from being issued. Even if paragraph twenty-one would have accurately reflected Hake and Costello's actual conversation, this court has no doubt the authorization would still have been issued. As the government points out, the transcript substantiates that past payments occurred in chambers; in addition, the remainder of the affidavit reflects at least four subsequent payments by Costello to Judge Olson in Chambers after September 9, 1980. (¶¶ 23, 28, 30 and 33) Thus, there is no reason to believe the "misrepresentation" or "omission" contained in ¶ 21 affected Judge Parsons' ruling.

Finally, the defendants have not made a substantial preliminary showing that Jordan's "misrepresentation" of the September 9, 1980 conversation between Hake and Costello was done knowingly and intentionally, or with reckless disregard for the truth. Although the September 9, 1980 conversation was inaccurately described in the affidavit, an accurate transcript of the conversation was attached as an appendix to the affidavit. If Jordan had intended to misrepresent the facts surrounding that conversation to Judge Parsons, it is highly unlikely that he would have attached an accurate transcript of the conversation. Thus, this court cannot find the statements contained in, or omitted from, paragraph twenty-one aid the defendants in making the substantial preliminary showing necessary to warrant a Franks hearing.

2. The Statement Contained in Paragraph 36

As has been noted previously, the burden of establishing that a substantial basis exists for holding a Franks hearing rests upon the defendant; that burden cannot be satisfied by mere self-serving statements. United States v. Reed, 726 F.2d 339, 342 (7th Cir. 1984) Here, the defendants have failed to provide any evidence that Judge Olson did not sit in gambling court. Thus, the defendants' mere assertion that the ...


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