United States v. Robert McPartlin
595 F.2d 1321 (1979)
Rule of Law:
The attorney-client privilege extends to communications made by a co-defendant to an investigator for another co-defendant's attorney for a common defense purpose, even if their overall defenses are not entirely compatible. Evidence of prior bad acts is admissible to prove intent if its probative value outweighs prejudice, and business records are admissible if regularly kept, even if pertaining to illicit activities or for the record-keeper's sole benefit within a business context.
Facts:
- By early 1971, the Metropolitan Sanitary District of Chicago, responsible for sewage disposal, needed a new method for sludge disposal as its lagoons were filling and solicited bids for a sludge-hauling project to Fulton County, Illinois.
- William J. Benton, vice president of Ingram Corporation, sought to secure the multi-million dollar sludge-hauling contract for Ingram Corporation, acting with the knowledge and complicity of Frederick B. Ingram, the corporation's chairman.
- Robert Bull, president of a towing company, and Franklin H. Weber, a businessman, acted as intermediaries to facilitate securing the contract.
- On March 23, 1971, Weber informed Benton that Ingram Corporation would need to make a $250,000 “political contribution” to secure the contract, which Frederick Ingram approved on the condition it could be added to the contract price.
- Weber later increased the demand to $450,000, requiring a $150,000 cash payment before the contract award, which Frederick Ingram again approved under the same condition.
- On April 3, 1971, Weber and Illinois legislator Robert F. McPartlin met Benton, and McPartlin assured Benton that Ingram Corporation would receive substantial revenue from the contract; Benton then gave McPartlin $75,000 in cash.
- On April 6, 1971, Weber demanded $25,000 cash for Sanitary District staff cooperation; Benton arranged for Ingram Corporation to issue a check for this amount to Bull Towing Company, which Edwin Bull deposited and then immediately withdrew $25,000 in cash.
- On April 15, 1971, Sanitary District trustee Valentine Janicki instructed an Ingram employee (Oberle) to increase Ingram Corporation's bid by $1,000,000, which was done after Benton's approval, leading to Ingram Corporation being awarded the contract on April 22, 1971.
- Payments continued after the contract award to secure favorable treatment and modifications, including $21,250 to one of Weber’s defunct corporations in June 1971 and $146,000 to Weber and McPartlin in August 1971.
- After the Sanitary District assessed $30,000 in liquidated damages, a meeting between Benton, Weber, and Janicki resulted in the assessment's withdrawal.
- In February 1972, Weber informed Benton that Ingram Corporation needed to increase its 'contribution' to $620,000 to secure an additional $2,100,000 payment for a pipeline, leading Benton to deliver $100,000 cash to Mrs. Valentine Janicki.
- After new agreements for pipeline purchase, liquidated damages modification, and contract extension were signed in January 1973, Benton paid Janicki $50,000 in cash and gave Weber $95,000 in cash plus nine $70,000 letters of credit drawn on a Swiss bank.
Procedural Posture:
- Frederick B. Ingram, Robert F. McPartlin, Valentine Janicki, Franklin H. Weber, and Edwin T. Bull were indicted for conspiring to violate federal wire and travel fraud statutes, and for substantive violations of those statutes.
- Defendants McPartlin, Weber, and Janicki were also charged with filing false income tax returns, but the tax counts against McPartlin and Weber were dismissed before trial.
- The defendants were convicted in a nine-week jury trial.
- The defendants appealed their convictions to the United States Court of Appeals for the Seventh Circuit.
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Issue:
1. Does the attorney-client privilege extend to communications made by one co-defendant to an investigator for another co-defendant's attorney when pursuing a common defense strategy, even if their overall defenses may be partially antagonistic? 2. Did the trial court abuse its discretion by denying severance to co-defendants who claimed antagonistic defenses or spillover prejudice from evidence against another defendant? 3. Was the jury instruction on the economic extortion defense, which differentiated between economic loss and gain and required a belief in legal entitlement to the official action, erroneous or prejudicial? 4. Was evidence of a defendant's prior, similar illicit payments admissible under Fed.R.Evid. 404(b) to rebut an extortion defense, and did its admission violate Fed.R.Evid. 403 by being unduly prejudicial? 5. Did the prosecution's disclosure of exculpatory evidence (Benton's embezzlement) at the start of trial, rather than pre-trial, violate due process under Brady v. Maryland? 6. Are personal business diaries containing regular, contemporaneous entries, including those related to illicit activities, admissible as business records under Fed.R.Evid. 803(6)? 7. Was Henry Weber's grand jury testimony, initially inconsistent with trial testimony, properly admitted on redirect to rebut a defense theory, and were Franklin Weber's political acquaintances properly admitted given the defense's strategy? 8. Was there sufficient independent evidence to link defendant Edwin Bull to the conspiracy, allowing co-conspirator statements to be admitted against him under Fed.R.Evid. 801(d)(2)(E)? 9. Did the jury instructions on the Travel Act (18 U.S.C. § 1952) erroneously state that a defendant need not know or reasonably foresee the use of interstate commerce facilities?
Opinions:
Majority - TONE, Circuit Judge
1. Yes, the attorney-client privilege extends to communications made by one co-defendant to an investigator for another co-defendant's attorney when pursuing a common defense strategy. The Court affirmed the exclusion of McPartlin's statements made to Ingram’s investigator, finding them protected by the attorney-client privilege. These statements were made in confidence as part of a joint effort to discredit a key prosecution witness (Benton), a common purpose for both defendants. The common-defense rule is broad and applies even if the co-defendants' overall positions are not entirely compatible, as supported by longstanding precedent and the Advisory Committee's Note to proposed Federal Rule of Evidence 503(b)(3). An investigator acting for an attorney is covered by the privilege, and the attorney for one co-defendant effectively becomes the attorney for another for the limited purpose of the joint effort. Furthermore, the exclusion was not prejudicial, as the statements were merely cumulative of facts already proven. 2. No, the trial court did not abuse its discretion by denying severance. The Court reiterated that severance is within the trial judge's discretion and requires a showing of clear abuse and prejudice. Frederick Ingram's defense, arguing payments were extorted due to economic threats, was not necessarily antagonistic to other defendants' defenses, as it was possible Benton (the intermediary) kept the money. Mere tactical advantage from separate trials is not a right. The Court found no cognizable prejudice arising from antagonistic defenses, nor from curtailed cross-examination (due to a general admonition against repetition). The Court also found no substantial risk of prejudice from spillover evidence (e.g., the Brazilian bribe against Ingram) or the admission of unrelated payments, as limiting instructions were effective, and some evidence was properly deemed irrelevant to Ingram's defense of economic, not physical, coercion.
Concurring - SPRECHER, Circuit Judge
3. No, the jury instruction on the economic extortion defense was not erroneous or prejudicial. Ingram challenged the instruction's distinction between economic loss and gain and its requirement that the defendant believe they were legally entitled to the official action. The Court found the economic loss/gain distinction was not erroneous because Ingram's defense included avoiding liquidated damages (an economic 'loss'), and the instruction clarified the concept of entitlement. The requirement of a belief in legal entitlement for the defense was consistent with the precedent of United States v. Peskin. Ingram's own testimony and arguments indicated he had no legal entitlement to the benefits sought, thereby precluding the extortion defense under Peskin, rendering any emphasis on voluntariness non-prejudicial. 4. Yes, evidence of Ingram’s prior surreptitious payments to a Brazilian official (Petrobas transaction) was properly admissible under Fed.R.Evid. 404(b) and its admission did not violate Fed.R.Evid. 403. The evidence was relevant to rebut Ingram's defense that he lacked the intent to bribe and only acted under extortion, by showing a pattern of 'facilitating payments.' The prior acts were sufficiently similar and contemporaneous. The argument that such payments were legal or moral in Brazil was unsupported and irrelevant; the point was Ingram's knowing circumvention of ordinary business channels. The Court found clear and convincing evidence that Ingram knew the purpose of the Brazilian payments. The trial court's meticulous balancing of probative value against prejudicial effect, including in camera reviews and extensive limiting instructions, was not an abuse of discretion under Rule 403. 5. No, the prosecution's disclosure of Benton’s embezzlement at the start of trial did not violate due process under Brady v. Maryland. Brady and Agurs primarily address total suppression of exculpatory evidence after trial, not merely delayed disclosure during trial. The standard for delayed disclosure is whether it came so late as to prevent a fair trial. The defendants failed to demonstrate undue prejudice, as they had ample time after the disclosure (almost two months) to conduct further investigations and did not renew requests for a continuance. 6. Yes, Benton’s personal business diaries were admissible as business records under Federal Rule of Evidence 803(6). The diaries met the reliability requirements: they were kept as part of Benton's regular business activity, entries were made regularly and contemporaneously (even if some were non-sequential or future-dated), and Benton relied on them, reducing reasons for falsification. The fact that only Benton relied on them or that some entries related to illicit activities did not disqualify them; his activities, though improper, were an integral part of his business for Ingram, making the records sufficiently 'business-like.' Alternatively, they would have been admissible under the residual exception (Rule 803(24)) due to their reliability, especially with Benton testifying, or as co-conspirator statements (Rule 801(d)(2)(E)) because they furthered the conspiracy.
Concurring - PELL, Circuit Judge
7. Yes, Henry Weber's grand jury testimony, initially inconsistent with trial testimony, was properly admitted on redirect to rebut a defense theory, and Franklin Weber's political acquaintances were properly admitted. The defense 'opened the door' by portraying Franklin Weber as lacking political associations during cross-examination, making rebuttal evidence of his connections to figures like Paul Powell relevant. Similarly, regarding Henry Weber's grand jury testimony about traveling to Liechtenstein, the defense attempted to create an impression of innocence on cross-examination. The grand jury testimony, showing initial falsehoods, was then admissible on redirect not for its truth, but to demonstrate Henry Weber’s awareness of improper transactions, a proper use when the 'door has been opened' by the defense. 8. Yes, there was sufficient independent evidence to link defendant Edwin Bull to the conspiracy, allowing co-conspirator statements to be admitted against him. The Court found overwhelming independent evidence, including Bull's suggestion of a need for 'political contributions,' his role in brokering meetings between Benton and Weber, his statement about expecting a share of the payments, and his involvement in cash conversions for Ingram (including a $25,000 check from Ingram to Bull Towing, which Bull deposited and immediately withdrew in cash, and for which he sought reimbursement for taxes). This evidence, viewed favorably to the government, allowed the jury to find Bull's knowing participation in the conspiracy beyond a reasonable doubt, thus justifying the use of co-conspirator statements against him. 9. No, the jury instructions on the Travel Act (18 U.S.C. § 1952) did not erroneously state that a defendant need not know or reasonably foresee the use of interstate commerce facilities. The Court reaffirmed circuit precedent (United States v. Peskin) that knowledge of the interstate nexus is not required for a Travel Act conviction. The use of interstate facilities merely provides a basis for federal jurisdiction, not an element requiring specific knowledge by the defendant. The instructions properly required proof that someone traveled or used an interstate facility in furtherance of the scheme, with intent to facilitate it, and that the defendant was a knowing participant in the scheme at that time.
Analysis:
This case is a multifaceted examination of federal evidentiary rules and criminal procedure within the context of a complex public corruption and bribery scheme. It solidifies the application of the common-defense rule for attorney-client privilege, emphasizing that shared interests, even amid some antagonistic defenses, are sufficient to protect confidential communications. The court's detailed analysis of prior bad acts under Rules 404(b) and 403 provides crucial guidance on using such evidence to prove intent while safeguarding against undue prejudice through judicial discretion and limiting instructions. Furthermore, the decision expands the understanding of what constitutes a 'business record' under Rule 803(6), acknowledging that personally maintained diaries, even those documenting illicit activities, can meet the reliability standard if regularly kept for business purposes. The case also reinforces the parameters of Brady disclosure, clarifying that timely disclosure during trial may suffice, and confirms the jurisdictional nature of the interstate travel element under the Travel Act. Its thorough review of these evidentiary and procedural challenges offers valuable precedent for future white-collar crime prosecutions and multi-defendant trials.
