974 F.2d 1502 (9th Cir. 1992), 89-30333, United States v. Dischner

Docket Nº:89-30333, 89-30334.
Citation:974 F.2d 1502
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Lewis M. DISCHNER, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Carl W. MATHISEN, Defendant-Appellant.
Case Date:April 03, 1992
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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974 F.2d 1502 (9th Cir. 1992)

UNITED STATES of America, Plaintiff-Appellee,


Lewis M. DISCHNER, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee,


Carl W. MATHISEN, Defendant-Appellant.

Nos. 89-30333, 89-30334.

United States Court of Appeals, Ninth Circuit

April 3, 1992

Argued and Submitted Aug. 20, 1991.

As Amended on Denial of Rehearing

and Rehearing En Banc Sept. 11, 1992.

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Douglas Pope, Wagstaff, Pope & Clocksin, Anchorage, Alaska, for defendant-appellant Dischner.

Stephen F. Frost, Bellevue, Wash., for defendant-appellant Mathisen.

Karen L. Loeffler, Asst. U.S. Atty., Anchorage, Alaska, for plaintiff-appellee.

Appeal from the United States District Court for the District of Alaska.

Before: TANG, REINHARDT, and RYMER, Circuit Judges


The opinion filed April 3, 1992 (960 F.2d 870) is amended as follows:

With the above amendments, the panel has voted to deny the petitions for rehearing and to reject the suggestions for rehearing en banc.

The full court has been advised of the suggestions for rehearing en banc, and no judge of the court has requested a vote on them. Fed.R.App.P. 35(b).

The petitions for rehearing are DENIED and the suggestions for rehearing are REJECTED.


RYMER, Circuit Judge:

These are consolidated appeals from convictions on jury verdicts rendered after an eight-month trial. Lewis Dischner and Carl Mathisen were found guilty of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1963, conspiracy to violate RICO, 18 U.S.C. § 1962(d), extortion in violation of the Hobbs Act, 18 U.S.C. § 1951, mail and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343, and violating the Travel Act, 18 U.S.C. § 1952. We affirm.

Factual Background 1

This case arises out of an investigation of corruption in the Office of the Mayor and the Department of Public Works of

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Alaska's North Slope Borough during the tenure of Mayor C. Eugene Brower, who served as mayor from 1981 to October 1984. During his administration, Brower accelerated a large-scale public works and capital improvements program. Under this program, the Borough contracted for and administered construction projects in an effort to build warehouses, fire stations, health clinics, sewage and waste treatment plants, and other facilities in villages throughout the Borough. The Department of Public Works, headed by Irving Igtanloc, ran the program and spent $700 million on the various projects during Brower's three-year term.

Soon after his election, Brower entered into public service agreements with Lewis Dischner and Carl Mathisen, two of his close friends, hiring them as advisors and consultants to the Mayor and the Department of Public Works. While both had worked for the Borough prior to Brower's election, Dischner as a lobbyist in Juneau and Mathisen as a consultant, their influence over the Borough's affairs increased significantly because of their close personal friendship with Brower and Igtanloc. Dischner continued his work as a Borough lobbyist, but he became Brower's primary advisor on matters relating to the capital improvements program. Mathisen was the Mayor's special assistant in connection with the business of the Department of Public Works, where he served as Brower's representative in connection with public works and capital improvements.

Dischner and Mathisen gave Brower gifts such as a ten carat diamond ring and the use of a house in Anchorage. They tapped their influence with him and their power over Borough affairs to steer public works contracts to companies in which they owned or had a financial interest, as well as to obtain no bid contracts for contractors, suppliers, and design, construction, and engineering firms from whom they received substantial kickbacks. These companies, referred to as the "ten percent" companies, paid Dischner (who typically split the commissions with Mathisen) ten percent of their gross receipts from the Borough, an amount that was typically added on to prices charged the Borough. As one witness testified at trial, if you wanted to work on the North Slope Borough, "you had to pay Lew Dischner."

Borough officials accepted Dischner's and Mathisen's directions in handling contracting and other matters, and Brower took their advice on matters relating to public works. Mathisen and Dischner used their influence to prevent the Borough from looking into price quotes from contractors and the ownership of companies being awarded contracts. They also concealed their personal interest in some of the companies receiving contracts, and refused to allow conflict of interest and disclosure provisions to be inserted into standard Borough contracts. Chris Mello, the Borough contracts administrator, testified that "in the Brower administration Public Works business was conducted according to defendant Mathisen's wishes as we best understood them." Borough contractors paid Dischner's ten percent commission to sustain the flow of Borough business and ensure themselves a slice of the capital improvements pie.

On November 10, 1987, the grand jury returned a thirty-six count indictment against Dischner and Mathisen. The indictment charged that they conducted the affairs of the Office of the Mayor and the Department of Public Works through a pattern of racketeering activity in violation of RICO. It described numerous acts of racketeering, including offering items of value to Mayor Brower with the intent to influence his exercise of official discretion, as well as receiving money and property with the intent to violate their own fiduciary duties to the Borough, in violation of Alaska's commercial bribe receiving statute, Alaska Stat. § 11.46.660. The indictment further charged a conspiracy to violate RICO; several counts of extortion, based on the inducement of payments from various contractors under the threat that they would not continue to receive contracts from the Borough if they did not pay Dischner or Mathisen; fifteen counts of mail and wire fraud; and four counts of Travel Act violations. Dischner also was

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charged with filing false tax returns, in violation of 26 U.S.C. § 7206(1), and failure to file tax returns, in violation of 26 U.S.C. § 7203.

The defense filed a number of motions before trial. Relevant to this appeal are their motions to dismiss the RICO counts on the ground that RICO is unconstitutionally vague, to strike the bribery predicate acts on the ground that the Alaska commercial bribe receiving statute is unconstitutionally vague, and their motion to dismiss the mail and wire fraud counts because the indictment included impermissible "intangible rights" allegations. The district court denied each of these motions. Due to the considerable media attention surrounding the investigation of North Slope Borough corruption, Dischner and Mathisen also claimed that prejudicial pretrial publicity required a change of venue. The district court denied these requests and held that a change of venue was not warranted. 2

On May 22, 1989, following an eight-month trial, the jury returned guilty verdicts on counts charging Dischner and Mathisen with RICO violations and conspiracy to violate RICO, three counts of extortion, fifteen counts of mail and wire fraud, and one count of interstate travel in aid of racketeering in violation of the Travel Act. The jury also convicted Mathisen of one more count of extortion, and acquitted both Mathisen and Dischner of five counts of wire fraud and three counts of Travel Act violations. The jury acquitted Dischner of the tax charges.

On October 18, 1989, the district court sentenced both Mathisen and Dischner to seven years imprisonment on the RICO and RICO conspiracy counts, and five years on each of the remaining counts, with all sentences to run concurrently. Under 18 U.S.C. § 1963(a), the district court also ordered Dischner and Mathisen to forfeit $5,863,260 and $5,749,808, respectively, the proceeds of their illegal activity. Both defendants timely appealed their convictions, and the district court granted bail pending appeal.

I. Constitutionality of RICO

Mathisen and Dischner challenge their RICO convictions on the grounds that the RICO statute, 18 U.S.C. §§ 1961-1963, is unconstitutionally vague on its face and as applied. 3 They complain that the terms "associated with," "enterprise," "conduct," "participate," "indirectly," "affairs," and "pattern of racketeering activity" provide no guidance as to what conduct the statute prohibits, resulting in virtually unlimited discretion for judges and law enforcement officials. In the context of this political corruption case, we remain unpersuaded.

Vagueness challenges to RICO have been uniformly rejected by this circuit and every other that has considered the issue. See United States v. DeRosa, 670 F.2d 889, 895 (9th Cir.) ("This claim has been rejected not only by this circuit, but also by every other circuit that has considered it. It merits no further discussion." (citations omitted)), cert. denied, 459 U.S. 993, 1014, 103 S.Ct. 353, 372, 74 L.Ed.2d 391, 507 (1982); United States v. Campanale, 518 F.2d 352, 364-65 (9th Cir.1975), cert. denied, 423 U.S. 1050, 96 S.Ct. 777, 46 L.Ed.2d 638 (1976); see also United States v. Tripp, 782 F.2d 38, 42 (6th Cir.) (collecting cases), cert. denied, 475 U.S. 1128, 106 S.Ct. 1656, 90 L.Ed.2d 199 (1986).

We would not give the issue further attention were it not for Justice Scalia's concurring opinion in H.J., Inc. v. Northwestern

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Bell Tel. Co., 492 U.S. 229...

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