Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.
Before CUDAHY, KANNE and ROVNER, Circuit Judges.
ARGUED SEPTEMBER 13, 1996
At the close of his second jury trial, Paul L. Glover, formerly the Vice-President and General Counsel of the Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) (CTDU or the Union), was convicted of numerous federal offenses arising from a series of investments that he arranged to be made with money from the Union's pension and health and welfare funds. Glover entered into these transactions on the Union's behalf for the purpose of obtaining kickbacks for himself and others. He was sentenced to one term of 84 months in prison and two terms of 36 months in prison for his role in these schemes, the terms set to run concurrently and to be followed by three years of supervised release. In addition, Glover was required to forfeit $325,000 to the United States and to pay the costs of his prosecution. Glover's first trial, at which he testified in his own defense, resulted in a mistrial due to the jury's inability to reach a verdict. Although Glover then chose not to take the stand at his second trial, the district court permitted the government to introduce a select portion of the transcript of Glover's testimony from his first trial, rejecting Glover's request that essentially all of his prior testimony be admitted in order to clarify the portion that was presented to the jury. Fed. R. Evid. 106. In this appeal, Glover contends that the district judge abused his discretion in doing so, and that the judge's ruling deprived him of his right to a fair trial. Glover also assails the district judge's decision to increase his base offense level under the Sentencing Guidelines by two levels for obstruction of justice, U.S.S.G. sec. 3C1.1, on the ground that his testimony at his first trial was perjurious. We affirm.
The CTDU is a national labor union with over 5,000 members, most of whom are truck drivers, dock workers and warehouse workers residing in the Chicago area. John R. Johnson, Sr., served as its President, and Glover as its Vice-President and General Counsel during all times relevant to this case. Glover was Fund Manager of the Union's Health and Welfare Fund, as well as a member of its Board of Trustees, and was responsible for managing the Fund's day-to-day operations. Glover was not, however, authorized to make investment decisions concerning the Health and Welfare Fund's assets on his own, as such decisions were to be made only under the direction of its full Board of Trustees. The CTDU Pension Fund was also administered by a Board of Trustees, which retained two money managers to provide it with investment advice. Pension Fund investments could only be authorized by a majority vote of its Board. Johnson held the position of Fund Manager of the Pension Fund and served with Glover as one of its trustees. The American National Bank of Chicago, Illinois, was one of the two money managers of the Pension Fund entrusted with reviewing its investments. Between October 1986 and July 1987, Wolf, Webb, Burke & Campbell (Wolf, Webb) of Philadelphia, Pennsylvania, served as the Fund's second money manager, but later resigned and was replaced in August of 1987 by M. D. Sass of New York City.
During the latter part of 1986 and early 1987, Johnson met several times with John Lelis, a commercial mortgage broker who suggested that the Union invest its funds in Coalstar Enterprises, a coal mining project in northern Indiana. Lelis sought to obtain two million dollars in investments for the project, and was willing to offer a kickback of a portion of his commission if Johnson could arrange to invest the sum. Johnson then met with Glover and told him about the arrangement, and Glover proposed that they obtain the money by convincing the Pension Fund money managers to purchase Coalstar stock. Glover first approached an investment manager at American National Bank and tried to persuade him to approve the investment, but was summarily rebuffed. Glover then arranged a meeting between himself, Lelis, Johnson, and representatives of American National Bank for the purpose of reviewing a presentation by Coalstar describing its coal mining venture in the hope of convincing them to approve the investment. American National Bank again refused, characterizing the venture as high-risk and unsuitable as an investment for the Pension Fund. At a similar meeting held the following day, Wolf, Webb reached the same conclusion. Wolf, Webb soon resigned as money manager of the Pension Fund, in part because of a letter drafted by Glover that directed Wolf, Webb to make the Coalstar investment.
At this juncture, Glover decided to raise the money for the investment by selling some of the Pension Fund's bonds, worth approximately one million dollars, that were being held by the Mid-City National Bank. Glover then drafted, and Johnson signed, a letter that directed the bank to transfer the bonds to Dean Witter Reynolds, which subsequently sold them prior to their maturity date at a loss of over $195,500 to the Pension Fund. Glover and Johnson then invested the proceeds from the sale in Coalstar stock without advising the Pension Fund's Board of Trustees of their actions, despite the fact that all such sales and investments of Pension Fund assets had to be approved by the Board. Nor was the Board informed of the loss that had been incurred when the Pension Fund's bonds were sold before their maturity. In June and July of 1987, Lelis met three times with Johnson and gave him a total of approximately $135,000 in cash, which Johnson divided equally with Glover. Glover did not apprise his income tax preparer of the money he received in kickbacks, and failed to report the income on his federal income tax return.
In late 1986, Johnson and Glover also entered into a similar scheme with Susan R. Bennett, a stock broker who met with Johnson to recommend various investments for the Union's assets. After Bennett agreed to give a portion of her commission to Johnson, Johnson and Glover met with her on several occasions to discuss possible investments for Union funds. In mid-January 1987, Johnson and Glover invested a total of approximately $1.95 million from the Union's Health and Welfare Fund in Putnam High Income Government Trust, a mutual fund, through Bennett. In early March of the same year, Johnson and Glover made an additional investment of over $4.6 million from the Fund in Kemper-Government Plus Portfolio funds, also through Bennett. Both investments were made without the knowledge or approval of the Board of Trustees of the Health and Welfare Fund. The Kemper investment required the sale of U.S. Treasury notes before their maturity, which was accomplished at Glover's direction, without a vote of the Board of Trustees. Shortly after receiving her brokerage commission from these transactions, Bennett met with Johnson at a local restaurant and gave him $30,000 in cash. Johnson shared the kickback with Glover, each taking $15,000.
In 1989, on the recommendation of an advisory association of pension fund trustees, the Board of Trustees of the Pension Fund began to consider placing approximately ten to fifteen million dollars of the Fund's money in real estate investments. Johnson then spoke with Bennett to confirm that she was still willing to pay kickbacks from the commissions she would earn by brokering the investment of Union monies. After Bennett agreed to make the kickbacks, Glover told Johnson to have Bennett arrange a presentation by several real estate investment firms to be made at a meeting of the Board of Trustees. Johnson and Glover told Bennett not to attend the meeting, and failed to advise the Board of Bennett's role in arranging the presentation or that she would be brokering the proposed transactions. The Board ultimately voted to invest five million dollars in each of two Sierra Capital funds, and five million dollars in a J.M.B. Realty fund. Although the Board authorized these investments, it was never informed that Bennett would be appointed broker of record on its behalf, or indeed that anyone would be paid a commission from the money it had allocated for the investments.
On November 1, 1989, Glover, Johnson and Bennett met for lunch at the Italian Village Restaurant in Chicago to discuss the division of Bennett's brokerage commission. At the meeting, Glover and Johnson made it clear to Bennett that she would be required to give them approximately $400,000 from the commissions she would receive for brokering the three transactions, that in the future she would only meet with Johnson in order to make the kickback payments, and that harm would come to her and her family if she ever mentioned Glover's name or told anyone of the kickback scheme. Bennett began receiving commission checks in late November 1989, and met with Johnson on several occasions to relinquish them. On or about November 29, 1989, Bennett gave Johnson two checks for $50,000 each, which she had endorsed over to Johnson, as well as $6,000 in cash. Bennett again met with Johnson in late January 1990, and gave him three more checks totaling $150,000. All of the checks were eventually cashed at a currency exchange by Timothy Evoy, an acquaintance of Johnson's, for a fee of $2250 per check. A third meeting between Bennett and Johnson took place around February 10, 1990, during which Bennett gave Johnson a paper bag containing $60,000 in cash. A fourth meeting was arranged for the end of February, and Bennett made a final kickback payment of $90,000 in cash to Johnson. Apart from the $6,000 in cash Bennett had paid to Johnson at their first meeting, which Johnson ...