139 F.3d 1359 (11th Cir. 1998), 95-5021, United States v. Johnson

Docket Nº:95-5021.
Citation:139 F.3d 1359
Party Name:UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. Edward A. JOHNSON, Defendant-Appellant, Cross-Appellee.
Case Date:April 28, 1998
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 1359

139 F.3d 1359 (11th Cir. 1998)

UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant,

v.

Edward A. JOHNSON, Defendant-Appellant, Cross-Appellee.

No. 95-5021.

United States Court of Appeals, Eleventh Circuit

April 28, 1998

Rehearing Denied June 25, 1998.

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[Copyrighted Material Omitted]

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Gerald J. Houlihan, Houlihan & Partners, P.A., G. Richard Strafer, Miami, FL, for Defendant-Appellant, Cross-Appellee.

William A. Keefer, U.S. Atty., Madeline Shirley, Asst. U.S. Atty., Miami, FL, for Plaintiff-Appellee, Cross-Appellant.

Appeal from the United States District Court for the Southern District of Florida.

Before TJOFLAT and BIRCH, Circuit Judges, and RONEY, Senior Circuit Judge.

RONEY, Senior Circuit Judge:

Defendant Edward A. Johnson was convicted of crimes which focused on sales between 1982 and 1987 to Chilean purchasers of zirconium which was made into cluster bombs sold to Iraq. Although the export of the zirconium for this purpose was prohibited by laws of the United States, Johnson sought to defend the charges against him by establishing that the United States--in particular, Presidents Ronald Reagan and George Bush, the Central Intelligence Agency and high ranking members of the military--encouraged the Teledyne companies, Johnson's employers, to export the zirconium, knowing the purchasers would use it to manufacture cluster bombs for Iraq, because at that time the United States was secretly supporting Iraq in its war with Iran. The district court held that the defendant failed to make his case in this regard. Rulings made in connection with that decision are at the heart of this appeal. We affirm.

Defendant Edward A. Johnson was convicted by a jury on four counts: criminal conspiracy, 18 U.S.C. § 371, making false statements to the government, 18 U.S.C. § 1001, and two counts of exporting zirconium compacts in violation of the Arms Export Control Act ("AECA"), 22 U.S.C. § 2778. He appeals with issues relating to the "materiality" requirement of false statement prosecutions, the definition of the United States Munitions List referred to in the AECA, the use of classified information as evidence in criminal trials, and the proper jury instructions

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for the defense of good faith reliance on the advice of counsel. The government cross-appeals Johnson's sentence.

CHARGES

The Arms Export Control Act authorizes the President to designate a special list of defense-related articles, known as the "Munitions List," which require a special license from the Department of State before they legally may be exported from the United States. See 22 U.S.C. § 2778(a)(1) (1994). Defense-related articles which also have non-military applications, known as "dual use" items, are excluded from the Munitions List and only require an export license from the Department of Commerce. See 22 C.F.R. § § 120.3-120.4 (1985).

Johnson was convicted for his role in a conspiracy to illegally export zirconium compacts to Chile. Although the zirconium compacts were used to manufacture cluster bombs, the end-use statements used to procure export licenses stated that the zirconium would be used in industrial explosives. Johnson was charged with criminal conspiracy, exporting zirconium compacts designed for use in cluster bombs without a license from the Department of State, and making false statements to the government. All of the charges required the government to prove that Johnson acted with specific intent to commit these crimes.

FACTS

Between 1983 and 1988, Teledyne Wah Chang Albany ("TWCA"), an American manufacturing company, exported over $3.5 million worth of zirconium to Chile. Zirconium is a rare metal with incendiary properties. The zirconium was sold to Carlos Cardoen, an international arms merchant based in that country. The zirconium was used as an incendiary agent in cluster bombs that Cardoen was selling to Iraq for use in the Iran-Iraq war. Most of the zirconium sold to Cardoen was in the form of manufactured zirconium compacts specifically designed for use in cluster bombs. In 1982, before zirconium shipments commenced, TWCA asked the Department of State Office of Munitions Control ("OMC") for a ruling on whether zirconium was on the Munitions List. It explained that TWCA wished to export zirconium for use in industrial explosives. In early 1983, OMC issued a commodities jurisdiction ruling stating that zirconium was a dual use item and therefore was excluded from the Munitions List. After receiving this favorable response from the Department of State, TWCA applied for export licenses from the Department of Commerce. Although Cardoen used the zirconium to manufacture cluster bombs, he provided TWCA with false end-use statements stating that the zirconium would be used as a booster material in industrial explosives sold to the mining industry. TWCA used these false end-use statements to procure export licenses from the Department of Commerce.

Edward Johnson was a sales manager of ordnance grade zirconium at TWCA. Although zirconium has civilian applications, the vast majority of Johnson's zirconium customers used the material to manufacture munitions, particularly cluster bombs. Beginning in 1982, Carlos Cardoen began placing large zirconium orders through Johnson. Most of Cardoen's orders were not for loose zirconium sponge, a raw material, but rather for zirconium sponge compacts, which are a manufactured component used in munitions such as cluster bombs. Throughout the period of the alleged conspiracy, Johnson continued to be one of Cardoen's primary contacts at TWCA. He accepted and processed all of Cardoen's zirconium orders and he negotiated pricing and shipping arrangements on behalf of TWCA.

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