798 F.2d 614 (3rd Cir. 1986), 84-5698, United States v. Pecora

Docket Nº:84-5698, 85-5386.
Citation:798 F.2d 614
Party Name:UNITED STATES of America, Appellee, v. Thomas PECORA, James Paone, Appellants. Appeal of Thomas PECORA. Appeal of James PAONE.
Case Date:July 02, 1986
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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798 F.2d 614 (3rd Cir. 1986)

UNITED STATES of America, Appellee,


Thomas PECORA, James Paone, Appellants.

Appeal of Thomas PECORA.

Appeal of James PAONE.

Nos. 84-5698, 85-5386.

United States Court of Appeals, Third Circuit

July 2, 1986

Assigned April 18, 1986.

Argued Sept. 12, 1985.

Rehearing and Rehearing In Banc Denied Aug. 21, 1986.

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Dino D. Bliablias (argued), Stein, Bliablias, McGuire & Pantages, Livingston, N.J., for Thomas Pecora.

Justin P. Walder (argued), Walder, Sondak, Berkeley & Brogan, Roseland, N.J., for James Paone.

Claudia J. Flynn (argued), U.S. Atty's. Office, Newark, N.J., for appellee.

Before SEITZ, BECKER, and ROSENN, Circuit Judges.


SEITZ, Circuit Judge.


The defendants, James Paone and Thomas Pecora, appeal judgments of conviction against them in the district court on two counts of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Secs. 1961 et seq. We have jurisdiction under 28 U.S.C. Sec. 1291.


The defendants were convicted by a jury of violations of both sections 1962(c) and (d) of RICO, which make it unlawful to conduct (section 1962(c)), or to conspire to conduct (section 1962(d)), an enterprise through a pattern of racketeering activity. Defendant Pecora, general manager of Federico Trucking, Inc. (FTI), 1 was charged with making payments, mainly in the form of salaries "paid" to a succession of no-show employees over the course of a decade, to defendant Paone, business agent and recording secretary of Local 863 of the International Brotherhood of Teamsters. These payments were allegedly the product of a conspiracy including Paone and Pecora, and were intended to influence Paone in the conduct of the business of Local 863. The jury found that the payments violated sections 302(a) and (b) of the Taft-Hartley Act, ch. 120, 61 Stat. 157 (1947), as amended by section 505 of the Labor-Management Reporting and Disclosure Act, Pub.L. 86-257, 73 Stat. 537 (1959), codified at 29 U.S.C. Sec. 186(a) and (b). The Taft-Hartley violations formed the predicate acts required to establish a "pattern of racketeering activity" under 18 U.S.C. Sec. 1961(1)(C).

On appeal, the defendants raise a multitude of issues which they argue warrant reversal of their convictions. To avoid repetition, we will discuss in detail below the facts pertinent to each issue, and content ourselves with a cursory sketch of the general scheme here. We describe the facts in the light most favorable to the government.

FTI, a corporation doing business in New Jersey, was established in 1972, and entered into a contract with Foodhaulers Inc., a subsidiary of Wakefern Food Corp., whereby Foodhaulers subcontracted its delivery of bakery products for Wakefern to FTI. Truckdrivers employed directly by Foodhaulers were represented by Local

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863. FTI was wholly owned by Biagio Federico, who also owned S. Federico Trucking in New York. S. Federico had a longstanding union relationship with Teamsters Local 202. When FTI was established, a jurisdictional dispute arose among several locals including 863 and 202 as to which Teamsters local would represent FTI employees. The dispute was considered by the New York and New Jersey Joint Councils of the Teamsters, and apparently resolved pursuant to a 1963 Memorandum of Understanding between those Councils to allow Local 202 to follow the work and represent the FTI drivers.

The relationship between Foodhaulers and the FTI drivers, however, bore many of the indicia of an employer/employee relationship. For example, Foodhaulers accepted the applications of FTI drivers, required them to have medical examinations, administered driving tests to them, issued them identification cards, and had the power to fire them.

The government claimed that FTI in the persons of Pecora and Biagio Federico conspired with Paone to funnel payments to him in order to prevent Local 863 from asserting that the subcontract was a sham intended to allow Foodhaulers to hire non-863 drivers in violation of its collective bargaining agreement, an assertion that could have interfered with FTI's subcontract. Paone would therefore use his influence as a high official in Local 863 to ensure that Local 863 would neither object to the subcontract or attempt to assert jurisdiction over FTI's driver employees.

From 1972 to 1981, a number of no-show employees were paid salaries, which were routed to Paone through middlemen. By 1981, the payments totalled approximately $235,000. In addition, FTI made several thousand dollars in welfare fund contributions on behalf of Paone's sister, despite the fact that she was never employed by FTI.

After the jury found the defendants guilty of both RICO counts, the district court denied motions for a judgment of acquittal under Federal Rule of Criminal Procedure 29, and motions for a new trial based on trial error and newly discovered evidence under F.R.Crim.P. 33. This appeal followed.


The defendants contend that the district court erred in denying their motions for a judgment of acquittal because, on the facts presented to the jury, there was insufficient evidence as a matter of law to find that they had violated sections 302(a) and (b) of the Taft-Hartley Act, 29 U.S.C. Secs. 186(a) and (b). In reviewing the district court's denial of defendants' motions, we determine whether there is substantial evidence, viewed in the light most favorable to the government, to support a jury's finding of guilt beyond a reasonable doubt as to the elements of the crime charged. Government of the Virgin Islands v. Williams, 739 F.2d 936, 940 (3d Cir.1984). The government must be given the benefit of inferences that may be drawn from the evidence, and the evidence may be considered probative even if it is circumstantial. Id. In addition, " '[t]he evidence does not need to be inconsistent with every conclusion save that of guilt if it does establish a case from which the jury can find the defendant guilty beyond a reasonable doubt.' " Id., quoting United States v. Allard, 240 F.2d 840, 841 (3d Cir.), cert. denied, 353 U.S. 939, 77 S.Ct. 814, 1 L.Ed.2d 761 (1957). Of course, to the extent we must review the district court's statutory interpretations or other decisions on matters of law, our review is plenary.

Section 302(a) makes it:

(a) ... unlawful for any employer ... or any person who acts in the interest of an employer to pay, lend, or deliver, or agree to pay lend, or deliver, any money or other thing of value--

(1) to any representative of any of his employees who are employed in an industry affecting commerce; or

(2) to any labor organization, or any officer or employee thereof, which represents, seeks to represent, or would admit to membership, any of the employees of

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such employer who are employed in an industry affecting commerce; or



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(4) to any officer or employee of a labor organization engaged in an industry affecting commerce with intent to influence him in respect to any of his actions, decisions, or duties as a representative of such labor organization.

Section 302(b) makes it "unlawful for any person to request, demand, or accept, or agree to receive or accept, any payment, loan, or delivery of any money or other thing of value prohibited by subsection (a)."

The essence of the defendants' arguments is that, under the facts, Paone was not a "representative" of FTI employees, that circumstances prevented Local 863 from admitting FTI employees to membership, and that payments to Paone could not have been made with intent to influence him in his capacity as an official of Local 863. Payments in violation of any one of the subsections of section 302(a), of course, would suffice to make out a Taft-Hartley violation. We are therefore called upon to construe the language of section 302 to see whether the facts here fall within its scope. We will take up each subsection in turn.


The facts relevant to section 302(a)(2) are not complex. First, a number of FTI's office employees were dues paying members of Local 863. Some of those employees were supervisory personnel and we will assume that they could not be represented by the Local under the National Labor Relations Act. However, other employees who were Local 863 members were clerical, non-supervisory personnel. The defendants maintained at trial that the office employees paid dues to the union for the sole purpose of participating in the insurance program operated under Local 863's welfare fund, and therefore that Local 863 was not their representative within the meaning of section 302.

At least one office employee testified that Local 863 never represented him with respect to the terms and conditions of employment, and there was testimony to the effect that a union and its welfare fund are two distinct entities. Local 863 never negotiated a collective bargaining agreement for the office employees. When the office employees transferred to another health plan, they were put on Local 863's withdrawal rolls.

The seminal case construing the term "representative" is United States v. Ryan, 350 U.S. 299, 76 S.Ct. 400, 100 L.Ed. 335 (1956). In Ryan, the petitioner argued for a very restrictive interpretation, but the court held that "a narrow reading of the term 'representative' would substantially defeat the Congressional purpose." 350 U.S. at 304, 76 S.Ct. at 404.

Ryan did not purport to define the outer limits of the scope of the term "representative", but instead stressed its breadth. The Court noted that a narrow reading of the statute would prevent applying section 302 to "other individuals as trustees [of welfare funds]," 350 U.S. at 305, 76 S.Ct. at 404, and that Congress had "enlarged [the scope of section...

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