United States v. Sullivan, 74-1020.

CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)
Citation498 F.2d 146
Docket NumberNo. 74-1020.,74-1020.
PartiesUNITED STATES of America, Appellee, v. Edwin L. SULLIVAN, Defendant, Appellant.
Decision Date04 June 1974

Peter Lawson Kennedy, Providence, R. I., with whom Adler, Pollock & Sheehan, Providence, R. I., was on brief, for defendant, appellant.

Lauren S. Kahn, Dept. of Justice, with whom Lincoln C. Almond, U. S. Atty., S. Michael Levin, Sp. Atty., Dept. of Justice, and Jerome M. Feit, Atty., Dept. of Justice, were on brief, for appellee.

Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges.

McENTEE, Circuit Judge.

Defendant was convicted by a jury on two counts of unlawfully and willfully embezzling, stealing, abstracting and converting to his own use funds of the International Union of Operating Engineers, Local No. 57, of which he was an employee and minor official, in violation of 29 U.S.C. § 501(c) (1970). On appeal, defendant principally contends that § 501(c) could not have been properly applied to him, and further that, in any case, the evidence presented at trial did not support his conviction.

Defendant's initial claim is substantially without merit. Section 501(c) provides unambiguously that

"Any person who embezzles, steals, or unlawfully and willfully abstracts or converts to his own use . . . any of the moneys, funds, securities, property or other assets of a labor organization of which he is an officer, or by which he is employed is guilty of a crime." (Emphasis supplied).

At the time of the illicit activities alleged in the indictment, it is undisputed that defendant was a bonded employee of the local union's business office, being responsible, in part, for the preparation of checks and the acceptance and receipt of monthly union dues. Moreover, during this period, defendant occupied the union office of Guard, though the evidence revealed that this position was largely a ceremonial one.1 Consequently, it seems evident that, upon consideration of defendant's status both as an employee and an officer, § 501(c) would prima facie apply to proscribe his participation in the unlawful conduct described therein. However, defendant contends that it was the Congressional intent to limit the full applicability of § 501(c) strictly to those particular union positions, described by 29 U.S.C. §§ 402(q), 501(a) (1970), which involve certain fiduciary obligations vis-a-vis the union.2 Since defendant further contends that his functions within the union did not fall within the ambit of the fiduciary relationships defined in §§ 402(q) and 501(a), he therefore claims that § 501(c) has no applicability to him.

Preliminarily we note that even a liberal construction of this court's decision in Colella v. United States, 360 F.2d 792, 799, cert. denied, 385 U.S. 829, 87 S.Ct. 65, 17 L.Ed.2d 65 (1966), compels rejection of defendant's broad contention that §§ 402(q) and 501(a) completely circumscribe § 501(c). While recognizing that "insofar as embezzlement is concerned, the existence of a fiduciary relationship is necessary" for conviction, our opinion in Colella emphasized that

"we are not dealing with an indictment charging simply embezzlement. Section 501(c) establishes `a new Federal crime of embezzlement of any funds of a labor organization.\' citation omitted The new crime can be accomplished in one of four ways: embezzling, stealing, unlawfully and willfully abstracting, and unlawfully and willfully converting." 360 F.2d at 799.

And, while suggesting that a § 501(a) or § 402(q) fiduciary relationship may arguably be an "essential element of the embezzlement means of committing the new federal crime,3Colella seems to make clear that such a relationship "is not essential to the three other means." Id. at 800 n.6. See Doyle v. United States, 318 F.2d 419 (8th Cir. 1963). Moreover, since, as we said in Colella, we "cannot imagine facts constituting embezzlement which would not also, absent a fiduciary relationship, make out unlawful and willful abstraction or conversion," 360 F.2d at 800, the defendant in the instant case would not have been prejudiced by the fact that he conceivably could not have been convicted of traditional embezzlement, on the assumption that his union functions were not covered by §§ 402(q) and 501(a). "As far as the defendant is concerned, he has been placed in jeopardy with respect to all means of committing the offense by the proper manner of substitution in the indictment of the conjunctive `and' for the statutory disjuctive `or'. citations omitted." Id.

Thus, the impact of §§ 402(q) and 501(a) is at best limited to its effect upon the embezzlement provision of § 501(c), but see note 3 supra, and does not preclude a non-fiduciary union employee or officer from being subject to the remaining three aspects of that section.4 Nonetheless, even if we were to accept, for the sake of argument, defendant's contention regarding the limiting role of §§ 402(q) and 501(a), we would still be forced to reject his argument.

In the first place, defendant is an elected officer of the union, and strictly speaking, no matter how ceremonial, § 501(a) invests in such officers the requisite fiduciary obligations necessary to sustain conviction under § 501(c), see note 2 supra, even were that section to be modified in the manner defendant suggests. Given the broad protective purposes underlying § 501, see, e. g., United States v. Goad, 490 F.2d 1158, 1161-1162 (8th Cir. 1974) cert. denied, ___ U.S. ___, 94 S.Ct. 3068, 41 L.Ed.2d ___ (1974); Johnson v. Nelson, 325 F.2d 646, 650 (8th Cir. 1963), we think it entirely appropriate to construe the § 501(a) term "officer" in its most literal sense to include all union officers, no matter how minor their responsibilities. Certainly, it would violate the important judicial and social policy of clarity in the law to permit each potential § 501(c) defendant-officer to attempt to establish that his particular official functions were not comprehended within the "true" spirit of § 501(a). Moreover, to place a narrow construction on the term "officer" might, as in this case, necessitate excluding from § 501 coverage, an individual who, while not a high union official, did play, as the record reveals, a significant role in the administration of local union affairs.

But beyond defendant's arguably limited role as an officer pursuant to § 501(a), it is abundantly clear from the record that the defendant was a "key administrative" employee within the meaning of § 402(q) such that, on this account alone, he possessed a sufficient fiduciary obligation with respect to union funds and assets. Along with John White, Sr. and John White, Jr.,5 defendant was an important and influential member of the union's administrative staff. His responsibility for preparing checks, and for assisting in the collection of dues, constituted a significant role in the necessary performance of daily administrative functions.6 In view of the obvious importance of defendant's role within Local 57, we will not now accept his plaintive claim that he was merely an insignificant clerical employee.

Thus, even under defendant's narrow interpretation of § 501(c), as requiring complete modification by §§ 402(q) and 501(a), his arguments provide little solace since both as an officer, pursuant to § 501(a), and as a key administrative employee, pursuant to § 402(q), defendant possessed the requisite fiduciary relationship with respect to his union necessary to permit application of § 501(c) to him.

We next turn to defendant's additional contention that the evidence adduced at trial will not support his conviction. Initially, we must note that the alleged wrongdoing on the part of defendant is somewhat unique to prosecutions under § 501(c). Whereas most criminal actions brought pursuant to that section involve "affirmative" misconduct—generally in the form of either intentional falsification of union expense vouchers, see, e. g., United States v. Dibrizzi, 393 F.2d 642 (2d Cir. 1968); Colella v. United States, supra, improper application of union funds by union management, see, e. g., United States v. Boyle, 157 U.S.App.D.C. 166, 482 F.2d 755, cert. denied, 414 U.S. 1076, 94 S.Ct. 593, 38 L.Ed.2d 483 (1973); United States v. Silverman, 430 F.2d 106 (2d Cir.), modified per curiam on other grounds, 439 F.2d 1198 (2d Cir. 1970), cert. denied, 402 U.S. 953, 91 S.Ct. 1619, 29 L.Ed.2d 123 (1971), or illicit behavior approaching outright theft, see, e. g., United States v. Bryant, 430 F.2d 237 (8th Cir. 1970)defendant here was essentially convicted of having "passively" received unauthorized salary increases and Christmas bonuses, knowing the same to have been unauthorized, and hence, illegal. However, as the Second Circuit has observed in a somewhat different context, "the reach of § 501(c) is not limited to union officers who engage in stealthy larcenies or devious embezzlements," United States v. Dibrizzi, supra, 393 F.2d at 645. Considering that § 501(c) was designed essentially to protect general union memberships from the corruption, however novel, of union officials and employees, see United States v. Harmon, 339 F.2d 354, 357-358 (6th Cir. 1964), cert. denied, 380 U.S. 944, 85 S.Ct. 1025, 13 L.Ed.2d 963 (1965), we do not believe that the proscriptions of that section should be read to operate solely against those who violate its terms in an active manner. In our view, the willing acceptance of misappropriated union funds by a recipient who knows that such funds are unauthorized and illegal will constitute a violation of § 501(c). See United States v. Goad, supra; cf. Woxberg v. United States, 329 F.2d 284, 285-293 (9th Cir.), cert. denied, 379 U.S. 823, 85 S.Ct. 45, 13 L.Ed.2d 33 (1964). Consequently, if upon examination of the record, it appears that there was sufficient evidence to permit the jury to conclude beyond a reasonable doubt that the defendant improperly received union funds (in...

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