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United States v. McGee

July 20, 2010


Appeal from the United States District Court for the Eastern District of Wisconsin. No. 07-CR-177-C.N. Clevert, Jr., Chief Judge.

The opinion of the court was delivered by: Easterbrook, Chief Judge.


Before EASTERBROOK, Chief Judge, FLAUM, Circuit Judge, and HIBBLER, District Judge.*fn1

Michael McGee, Jr., was elected to the Milwaukee Common Council in 2004. Almost immediately he began to demand payments from businesses that depend on liquor licenses and other permits that he could control, because the Common Council allowed each Alderman to determine licensing and zoning questions within his own district. Some of the proprietors grumbled to their friends that McGee's demands had made their businesses unprofitable. One proprietor's friend contacted the FBI, which began a criminal investigation that was assisted by a wiretap on McGee's phones. The recordings establish that McGee used his public office to wring money from constituents. He was arrested in May 2007 and charged with extortion, 18 U.S.C. §1951(a); solicitation of bribes, 18 U.S.C. §666(a)(1)(B); and structuring financial transactions to evade reporting them, 31 U.S.C. §5324(a). The jury convicted on all nine counts, and the judge sentenced McGee to 78 months' imprisonment plus $107,433 in restitution.

The evidence of guilt is strong and for the most part undisputed. The victim who paid the most was Adel "Jack" Kheirieh, who testified in detail to McGee's demands. Adel gave McGee cash, cell phones (liberally stocked with air time), and other gifts, because McGee threatened to terminate his liquor license, on which his business depended. McGee contends that the evidence on some counts is insufficient. The events underlying these counts occurred during the investigation; many of the encounters were recorded or even scripted by federal agents. For example, the transaction in Count 2-Adel's payment of $750 to McGee by money order-was recorded. McGee says that the evidence is insufficient because, although the recording proves that McGee requested and received payment, it does not prove that his intent was corrupt. Yet McGee mentioned that, to raise what he called "seed money," he had "sent" a "message" to another business by having its liquor license revoked. That's a threat to do the same to Adel unless he paid. McGee did not record the $750 as a campaign contribution and can't use that explanation for taking the money. See United States v. Allen, 10 F.3d 405, 412--13 (7th Cir. 1993). Other details, such as whether the FBI supplied this money order, do not matter. It is not necessary to traipse through the record count by count; the evidence supports all convictions.

McGee's principal argument is that the trial's first day included a narration of his guilt based on hearsay-and that's indeed what happened. An FBI agent told the jury that to obtain a warrant for a wiretap the prosecutor had to establish, to a judge's satisfaction, that the telephone was being used to commit a crime. This agent recounted what a preliminary investigation had revealed and why the United States Attorney and high-ranking officials at the Department of Justice thought it enough to support audio interception of McGee's phone calls. Then the agent explained that District Judge Adelman, who issued the warrant for the interception, agreed with this conclusion. The warrant, which recites some of this evidence (and the judge's conclusion), was introduced into evidence. Before the trial was two hours old, the essence of the prosecutor's case had been laid before the jury. And not a word of this evidence was from a witness with first-hand knowledge or subject to cross-examination. The process violated both the confrontation clause of the sixth amendment and the hearsay rule.

The prosecutor's stated rationale for exposing the jury to this damning hearsay was that it "laid a foundation" for admission of the wiretaps. Yet admissibility of evidence is a preliminary question for the judge. See Fed. R. Evid. 104(a); United States v. Martinez de Ortiz, 907 F.2d 629 (7th Cir. 1990) (en banc). There was no need to put hearsay before the jury in order to make the intercepted conversations admissible. In other cases, prosecutors have justified evidence of this kind by a supposed need to explain that in real life, unlike the world of movies and TV programs, employees of mysterious "deniable" agencies can't go around listening to other people's conversations on their own say-so. Federal agents need to persuade politically visible and responsible supervisors, then get judicial permission. It may be well and good to inform juries that wiretaps need authorization-but the means used in this trial is not the way to do it. The right way is for the prosecutor (in an opening statement) or the judge to tell the jury that judicial permission is required and was received, and that the process of listening is subject to statutory controls. There was no legitimate reason to present hearsay about the particulars of McGee's activities or the findings of the judge who issued the warrant. Evidence must be submitted through witnesses with personal knowledge, and subject to cross-examination.

Four years ago, we held in United States v. Cunningham, 462 F.3d 708 (7th Cir. 2006), that it is improper to introduce hearsay under the rationale of assuaging jurors' fears about uncontrolled snooping, and that the defendant is entitled to a new trial if an objection is made and overruled. The evidence smuggled in by a "how and why we obtained a phone-intercept order" summary is not only hearsay but also irrelevant (the validity of the order is for the judge, not the jury, to determine). In two cases in which the defense did not object, by contrast, we concluded that the introduction of hearsay was not plain error, because the evidence eventually came in properly, by live testimony and the recordings themselves. See United States v. McMahan, 495 F.3d 410, 416--18 (7th Cir. 2007), vacated on other grounds under the name Smith v. United States, 552 U.S. 1091 (2008); United States v. Noel, 581 F.3d 490, 496--99 (7th Cir. 2009).

McGee's trial occurred 22 months after our opinion in Cunningham. The prosecutor should have known that he was eliciting inadmissible testimony. The judge should have known it too, yet did nothing. And defense counsel likewise must have understood that the testimony was out of bounds-yet he did not object. It is unlikely that counsel was asleep; the hearsay rule is second nature to any trial lawyer. Perhaps he viewed the prosecutor's misstep as a godsend. Evidence of McGee's financial exactions was going to come in from the victims, who had personal knowledge, and their testimony would be bolstered by recordings from wiretaps plus hidden microphones and cameras. The main thing the hearsay did was create an issue for appeal. A lawyer who knows that the evidence is solidly against his client may see strategic value in allowing error to occur, despite the fact that the plain-error standard will make it hard to upset the verdict on appeal.

Even if we are wrong in suspecting that counsel's silence was strategic (which would imply waiver and not just forfeiture), the standard of plain-error review has not been satisfied. As the Supreme Court reiterated only a few weeks ago, the plain-error standard is hard to satisfy. See United States v. Marcus, 130 S.Ct. 2159 (2010). Defendant must establish, among other things, an adverse effect on his "substantial rights," which means serious prejudice, and on this issue the defendant bears the burden of persuasion. (This is one of several ways in which plain-error review is more confined than harmless-error review, the standard applicable when an objection is made and erroneously denied.) McGee does not say that any important part of the FBI agent's narration was left without support from admissible evidence introduced later. That would be prejudice but did not occur in this trial any more than in Noel or McMahan, and so the plain-error standard has not been met.

The only way in which this case differs from McMahan is that the wiretap orders were admitted into evidence. These orders contained Judge Adelman's finding that McGee had committed, and was continuing to commit, the sorts of acts for which he was on trial. A judicial finding may have a strong influence on jurors-stronger than it should, since the jurors may not appreciate that Judge Adelman's findings were based on a one-sided presentation by the Department of Justice. (Wiretaps must be kept secret or they won't be useful, so there cannot be an adversarial presentation before the order is issued.) But counsel was free to point out to the jury the limits of ex parte probable-cause findings. Given the overwhelming evidence at trial (all subject to cross-examination), which showed that Judge Adelman's findings were right, it is not possible to treat the jurors' knowledge of the intercept warrants as undermining McGee's substantial rights. More than that: defense counsel said at trial that he had "no objection" to the admission of the intercept orders and so has waived this topic. Not even plain-error review is possible.

Although McGee is not entitled to a new trial, we are dismayed by the prosecutor's conduct and disappointed by the district judge's failure to intervene. The extensive hearsay did not slip in by accident, in the heat of the moment; the prosecutor must have carefully planned this line of testimony. The proper way to introduce jurors to forthcoming wiretap evidence ought to be featured in the United States Attorney's Manual. The United States has not attempted to defend the propriety of the prosecutor's tactics. Waiver and the plain-error doctrine may insulate judgments from reversal, but recurrence of an episode such as this may lead to the opening of a disciplinary proceeding for the lawyers involved.

We turn to another of McGee's arguments. The district judge anticipated that the trial would be lengthy. At a pretrial conference he told counsel that he was inclined to permit both the prosecutor and defense counsel to summarize the evidence occasionally, so that the jurors could keep their bearings and maintain concentration. Principle 13G of the American Bar Association's Principles for Juries and Jury Trials (2005), recommends that judges allow such interim summaries in lengthy trials, whether civil or criminal. The Seventh Circuit American Jury Project tested seven of the ABA's proposals in trials before more than a dozen participating judges; mid-trial summaries were among the tested proposals and were used in 17 civil trials. Both the judges and counsel concluded that the summaries had helped jurors organize the evidence better, improving their attention and under-standing. None of the participants thought the summaries were hurtful, though 8% thought that they did not help much either. American Jury Project, Final Report 32--35, 63--65 (2008). The district judge, persuaded by the ABA's proposals and the Jury Project's favorable results, decided to use this approach. McGee says that doing so violated the due process clause of the fifth amendment and entailed a "structural error" that requires reversal without regard to whether any injury to the defendant ensued.

Several decisions have concluded that mid-trial summaries are permissible in civil trials. See, e.g., Consorti v. Armstrong World Industries, Inc., 72 F.3d 1003, 1008 & n.1 (2d Cir. 1995), vacated on other grounds under the name Consorti v. Owens-Corning Fiberglas Corp., 518 U.S. 1031 (1996); ACandS, Inc. v. Godwin, 340 Md. 334, 407--13, 667 A.2d 116, 152--54 (1995). But one court has held that mid-trial summaries are unconstitutional and amount to structural error in criminal trials-at least if a summary follows each witness's testimony and the judge allows the ...

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