Grand Jury Testimony, Matter of

• Decision Date: 25 June 1991
• Docket Number: No. A-73,A-73
• Citation: 124 N.J. 443,591 A.2d 614
• Parties: In the Matter of an Application for Disclosure of GRAND JURY TESTIMONY and Exhibits From a State Grand Jury Investigation.
• Court: New Jersey Supreme Court

Page 443

124 N.J. 443

591 A.2d 614

In the Matter of an Application for Disclosure of GRAND JURY TESTIMONY and Exhibits From a State Grand Jury Investigation.

No. A-73

Supreme Court of New Jersey.

Argued Jan. 2, 1991.

Decided June 25, 1991.

Edward J. Farrell, Gen. Counsel, for appellant, New Jersey Election Law Enforcement Com'n (Edward J. Farrell, attorney; Edward J. Farrell and Douglas S. Brierley, on the briefs), Morristown.

Mark Paul Cronin, Deputy Atty. Gen., for respondent, State of N.J. (Robert J. Del Tufo, Atty. Gen. of N.J., attorney).

W. Hunt Dumont, Newark, John P. McDonald, Somerville, George L. Schneider, Fairfield, and Peter Manahan, Roseland argued the cause for respondents, The Co. and Senior Executives R.B., R.K., W.M., J.M., R.L., W.K., M.H., R.C., J.S., R.H., R.W., R.E., and J.M. (Robinson Wayne & La Sala, attorneys, Newark for The Co. and Senior Executives; McDonald, Rogers & Rizzolo, Somerville, for J.M., R.L. and W.K.; DeCotiis, Frino & Lundsten, attorneys for R.C., J.S., R.H., and R.W.; Connell, Foley & Geiser, attorneys, Roseland, for R.B., R.K., and W.M.; Lorber, Schneider, Nuzzi, Vichness & Bilinkas, attorneys, Fairfield for M.H.; W. Hunt Dumont and Donna M. du Beth, Newark, on the brief).

The opinion of the Court was delivered by

STEIN, J.

The exercise of judicial power in this appeal requires us to balance the public interest in the full disclosure of election financing against the public interest in maintaining the confidentiality of grand-jury proceedings. In State v. Doliner, 96 N.J. 236, 475 A.2d 552 (1984), we set forth standards governing disclosure of grand-jury materials to government agencies prosecuting civil actions. The Election Law Enforcement Commission (ELEC) seeks disclosure in this case of transcripts of testimony and documents produced before a State grand jury that had investigated allegations that respondent corporation (the Company) and certain of its senior officials had violated provisions of the New Jersey Campaign Contributions and Expenditures Reporting Act, N.J.S.A. 19:44A-1 to -47 (the Act). Although the grand jury returned no indictments, it handed up a presentment in which it recommended that the evidence presented before it should be turned over to ELEC for further administrative proceedings.

Pursuant to ELEC's request, the Attorney General filed a motion in the Law Division to compel disclosure of the transcript of the grand-jury proceedings. The court denied the motion, finding that ELEC had "made no independent effort whatsoever to investigate the matter" and therefore had not established a "strong showing of particularized need" sufficient to outweigh the public interest in preserving grand-jury secrecy. The Attorney General appealed, and the Appellate Division granted ELEC's motion to intervene. In an unpublished opinion, the Appellate Division affirmed the trial court's ruling.

We granted ELEC's petition for certification, 122 N.J. 182, 584 A.2d 243 (1990), and now affirm the judgment of the Appellate Division. We do so, however, without prejudice to ELEC's right to reapply for disclosure of the grand-jury materials if the agency's good-faith effort to obtain the desired evidence through its own resources is unsuccessful.

I

ELEC is the agency charged with enforcing the Act, whose "manifest objective * * * is to identify and attempt to regulate the significant flow of substantial wealth aimed at affecting the outcome of elections, public questions and the legislative process." New Jersey State Chamber of Commerce v. New Jersey Election Law Enforcement Comm'n, 135 N.J.Super. 537, 544, 343 A.2d 796 (Ch.Div.1975), rev'd on other grounds, 155 N.J.Super. 218, 382 A.2d 670 (App.Div.1977), aff'd as modified, 82 N.J. 57, 411 A.2d 168 (1980). The Act empowers ELEC to conduct hearings regarding possible violations of the statute and to impose penalties for such violations. N.J.S.A. 19:44A-6(b). To enable it to investigate alleged violations effectively and enforce compliance with the Act's provisions, ELEC has the authority to "issue subp[o]enas for the production of documents and the attendance of witnesses," N.J.S.A. 19:44A-6(b)(9), and, when necessary, to initiate civil actions in any court of competent jurisdiction. N.J.S.A. 19:44A-6(b).

The facts underlying ELEC's efforts to obtain the grandjury materials are undisputed. In October 1986, newspaper articles reported that a significant number of employees of the Company had contributed to the campaign of a gubernatorial candidate. The aggregate amount contributed by those employees constituted a substantial portion of that candidate's total contributions from private individuals. According to the articles, unnamed employees had alleged that the Company or its officers had either loaned or made gifts of the funds contributed by the employees. Shortly thereafter, ELEC initiated an investigation regarding those allegations. Believing that the alleged conduct warranted a criminal investigation, ELEC referred the matter to the Division of Criminal Justice in October 1986. At that time, ELEC discontinued its investigation.

The State impaneled a grand jury to investigate the alleged violations of the Act. The grand-jury panel was instructed that

if you find events or conditions which you have investigated which do not constitute an offense indictable under our law but which nevertheless are of such importance that they should be brought to the attention of the public and the officials concerned, you may return a presentment.

From October 1986 to October 1988 the grand jury heard testimony from forty witnesses during thirteen separate sessions. In October 1988, the grand jury issued a presentment in which it found that although the investigation revealed "an unusual pattern of contributions to more than one candidate for governor by the [respondent] company's employees, the spouses of those employees, and other relatives of those employees * * * the evidence was not sufficient to establish criminal violations of the law." Although it returned no indictments, the grand jury did recommend that

the record of the proceedings before it be referred to the ELEC for administrative proceedings under N.J.S.A. 19:44A-22 to determine whether civil penalties should be imposed against the company or any specific individuals associated with the company for having violated the proscriptions of N.J.S.A. 19:44A-20 by making loans to company employees, the spouses of company employees and other relatives of company employees, for the express purpose of inducing or enabling them to make political contributions to gubernatorial candidates.

In response to the presentment, ELEC sent a letter to the Division of Criminal Justice requesting that it "seek Court permission for ELEC to be granted access to the state grand jury testimony and evidence presented by the company's employees, the spouses of those employees, and the relatives of those employees." In its letter, ELEC indicated that it lacked the investigatory resources necessary to reconstruct the evidence that had been presented to the grand jury. In December 1988 the Attorney General moved before the Law Division for an order authorizing disclosure and release of the grand-jury testimony and exhibits, supported by an affidavit from ELEC's Director of Review and Investigation. The affidavit noted that candidates are not required to retain campaign contribution records more than "four years after the date of the election to which they are relevant." N.J.A.C. 19:25-8.2(a). Because the relevant election took place on November 5, 1985, ELEC alleged that it lacked the resources to undertake and complete the necessary investigation prior to November 5, 1989, after which date the contribution records would no longer have to be retained. Respondents opposed the motion.

The Law Division denied the Attorney General's motion. The court considered whether the Attorney General had shown sufficient grounds to outweigh the public interest in grand-jury secrecy, noting that ELEC's only asserted basis for overriding that interest was its lack of investigatory resources. The court found that reason insufficient, stating that "[a] showing of lack of manpower to conduct an investigation is of only marginal significance." The court therefore held that until ELEC made a "reasonable effort to conduct its own investigation and seek disclosure * * * there can be no showing of any need much less a strong showing * * * of a particularized need." Although the court denied the motion for disclosure, it did "not rule * * * that [ELEC] may never obtain access to the grand jury evidence."

ELEC was permitted to intervene before the Appellate Division, contending that the trial court had abused its discretion in denying ELEC access to the grand-jury materials, and, alternatively, that the Appellate Division should remand the matter to the trial court to allow ELEC to participate in a new plenary hearing. The Appellate Division affirmed the denial of the motion for disclosure substantially for the reasons expressed by the Law Division. Addressing ELEC's request for a remand, the court observed that the Commission has proffered no additional reasons to this court which would justify reversing the order under review and remanding the matter for a new hearing. The Commission's argument that it lacks the manpower necessary to complete its investigation, that it suspended its investigation to accommodate the Attorney General, and that it is without records necessary to conduct a full and proper investigation into this matter, while undoubtedly true, provide no excuse for the Commission's failure to even attempt to investigate or acquire the requisite documents elsewhere. In short, the Grand Jury materials should not be disclosed to the Commission until it has made a reasonable effort to obtain the information elsewhere.

II

Courts have consistently acknowledged the broad and unfettered...