Askew v. U.S., 81-2091

• Decision Date: 18 June 1982
• Docket Number: No. 81-2091,81-2091
• Citation: 680 F.2d 1206
• Parties: John D. ASKEW, Appellant, v. UNITED STATES of America and the Internal Revenue Service, et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1206

680 F.2d 1206

John D. ASKEW, Appellant, v. UNITED STATES of America and the Internal Revenue Service et al., Appellees.

No. 81-2091.

United States Court of Appeals Eighth Circuit.

Submitted April 12, 1982.

Decided June 18, 1982.

James W. Gallman, Putman, Gallman & Dickson, Fayetteville, Ark., for appellant.

Glenn L. Archer, Jr., Asst. Atty. Gen., Michael L. Paup, Carleton D. Powell, Joan I. Oppenheimer, Attys., Tax Div., Dept. of Justice, Washington, D. C., for appellees.

Before ARNOLD, Circuit Judge, STEPHENSON, Senior Circuit Judge, and HANSON, ^* Senior District Judge.

HANSON, Senior District Judge.

This is a civil action for damages brought against the United States and the Internal Revenue Service for the alleged disclosure of certain bank records of John D. Askew to the government of Venezuela in violation of the Privacy Act. 5 U.S.C. § 552a. Askew appeals the judgment of the district court dismissing his complaint after a bench trial was held on the issue of liability. The issue before us is whether the district court's finding that there was no unlawful disclosure by the government is clearly erroneous. We hold that it is not and affirm the judgment of the lower court. ¹

I.

John Askew is a resident of Fayetteville, Arkansas, but he has been involved in the oil business in Venezuela-first as a welder and later as a contractor-since the 1940s. In the late 1960s Askew determined to use the many contacts he had developed in Venezuela and assumed the role of a promoter. He and his attorney negotiated a series of letter agreements with Dr. Armand Hammer, president of Occidental Petroleum Co., under which Askew would attempt to secure on behalf of Occidental service contracts granting oil and gas exploitation rights to certain areas of Venezuela's Lake Maracaibo. Askew was successful in securing these rights for Occidental in 1971. The relevant aspect of this arrangement to this litigation is Askew's subsequent receipt of $3 million from Occidental, most of which he then distributed in September and October 1971 to various influential Venezuelans who had been instrumental in Askew's success in obtaining the service contracts. A subsidiary of Occidental paid the money to a Bahamian corporation, Noark, Ltd., that Askew had formed for the purpose of receiving and distributing the funds. Askew distributed the money to the Venezuelans through checks drawn on Noark's checking account with the Canadian Imperial Bank of Commerce (CIBC) in Nassau, Bahamas.

Over the next several years, Askew suffered treble consequences as a result of these transactions. First the Internal Revenue Service uncovered the existence of the payment in 1973 during a routine audit of Askew's tax returns and requested financial records pertaining to Askew's receipt and disposition of the $3 million. Through his attorney, Askew delivered to the IRS the CIBC bank records of Noark, which included cancelled checks, debit memos reflecting wire transfers of funds from the account, and ledger sheets indicating monthly account balances.

Second, a lawsuit was filed against Askew in Texas in December 1974 by John G. Ryan, a former executive with Occidental's subsidiary corporation in Venezuela. Also named as a defendant in the suit was Perforaciones Altamar, C.A., a Venezuelan drilling company which was a contracting service company with Occidental and which was largely controlled by Askew. Ryan alleged that Askew and Altamar had tortiously interfered with his employment contract when Ryan was fired at their request after he discovered and began to question "irregularities" consisting of "illegal payments, forbearance and waiver of default (by Occidental) and breaches on the part of John D. Askew and Perforaciones Altamar, C.A." Government Ex. 3. In May 1975, Ryan amended his petition to add Dr. Hammer and David Martin, another Occidental executive, as defendants. Ryan further amended the petition to state in more detail allegations that the defendants were involved in a scheme to bribe Venezuelan government officials by use of a company called Noark, Ltd., in order to obtain service contracts for Occidental. Government Ex. 4.

News of Ryan's allegations spread south, which led to the third consequence to Askew: discovery by the Venezuelan media and government of a possible scandal. In October 1975, both the judicial and legislative branches of the Venezuelan government began investigations into Ryan's charges of bribery. By February 1976, Askew had appeared once before the judicial investigating body and three times before the Bicameral Commission set up by the Venezuelan legislature. A climax, of sorts, was reached on February 15, 1976, when the President of Venezuela appeared on national television and announced that he had been conducting his own investigation and that he knew the names of the people who had accepted the bribes. The president also displayed a photocopy of a check for $106,400 that Askew had written on the Noark account to Alberto E. Flores T, dated September 6, 1971. ² But for the display of this check, no names were announced by the president during his televised address; over the following days, however, the names of payees appeared in various Venezuelan newspapers. These names corresponded to the payees of some of the checks Askew had written on the Noark account and had turned over to the IRS. Askew was later incarcerated in Venezuela by a criminal court which held him pending the outcome of its investigation. Initially he was charged with bribery; later the charge was changed to conspiracy; and finally, after having spent four months in jail (July 19, 1976 to November 16, 1976), he was released when the charge was dismissed. Both the criminal court and the Bicameral Commission concluded that although money had definitely changed hands, none of the recipients was a government official. ³ Neither investigation was able to uncover any evidence that undue influence had been brought to bear on the negotiations between Occidental and the government.

Askew filed this action on January 13, 1978, alleging that sometime between January 13, 1976, and March 1, 1976, the IRS disclosed the cancelled checks and bank statements in violation of the Privacy Act ⁴ to the government of Venezuela and that Askew was incarcerated as a direct result of these disclosures. Askew admits that he has no direct evidence of any disclosure and relies entirely upon circumstantial evidence, comparing the information he gave the IRS with information obtained by the Venezuelan government, in attempting to establish his claim. The district court concluded that Askew had failed to carry his burden of proving an unlawful disclosure, adopted wholesale the proposed findings and conclusions of the government, and directed judgment entry in favor of the government.

II.

Initially, we find disquieting the manner in which the district court made findings of fact and conclusions of law in this case. It is said that "(f) indings are adequate if they afford the reviewing court 'a clear understanding of the basis of the trial court's decision.' " Allied Van Lines, Inc. v. Small Business Administration, 667 F.2d 751, 753 (8th Cir. 1982) (citations omitted). The adequacy of findings is more apt to be called into question when the trial judge-as was done here-adopts verbatim the proposed findings and conclusions of prevailing counsel, because more likely than not counsel "and properly so, in their zeal and advocacy and their enthusiasm are going to state the case for their side in these findings as strongly as they possibly can." Judge J. Skelly Wright, Seminars for Newly Appointed United States District Judges at 166 (1963). The result is that when the trial court adopts the proposed findings of counsel, losing counsel may well forfeit his "undeniable right ... to be assured that his position has been thoroughly considered (;) ... the independence of the court's thought process may be cast in doubt"; ⁵ and the reviewing court may well be left without a clear understanding of the trial court's basis for decision. Thus, while we acknowledge that the submission by counsel of proposed findings is frequently a valuable decision-making aid to the court, we disapprove of the court placing its imprimatur on such proposed findings by wholly adopting them as the court's own.

Certainly we could have benefited from a more detailed exposition of the rather convoluted facts in this case than the nineteen numbered findings of fact and two conclusions of law that were proposed by counsel for the government and adopted by the lower court. We are aware, however, that such findings, "though not the product of the workings of the district judge's mind, are formally his; they are not to be rejected out-of-hand, and they will stand if supported by evidence." United States v. El Paso Natural Gas Co., 376 U.S. 651, 656, 84 S.Ct. 1044, 1047, 12 L.Ed.2d 12 (1964). Accordingly, we proceed to examine the support in the record for the lower court's findings.

III.

Our examination of the record leaves us, on the one hand, with no completely crystallized picture of the events which unfolded in Venezuela during the course of the IRS and Venezuelan government investigations. On the other hand, the overall picture is sufficiently clear that, as to the findings of the district court, we are nowhere left with the "definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). The picture that emerges is one in which the agents of the IRS, throughout their investigation of Askew's dealings, studiously avoided any contact with the Venezuelan government and media. Two of the three IRS agents who had physical control over Askew's records during the relevant period testified at the trial; ⁶ both said they made no contacts with or disclosures to the Venezuelan government or media. The...