Matter of Application for Appoint. of Ind. Counsel

• Decision Date: 06 November 1984
• Docket Number: No. 84 Civ. 3886.,84 Civ. 3886.
• Parties: In the Matter of AN APPLICATION FOR APPOINTMENT OF INDEPENDENT COUNSEL.
• Court: U.S. District Court — Eastern District of New York

596 F. Supp. 1465

In the Matter of AN APPLICATION FOR APPOINTMENT OF INDEPENDENT COUNSEL.

No. 84 Civ. 3886.

United States District Court, E.D. New York.

November 6, 1984.

Monroe H. Freedman, Hempstead, N.Y., Orenstein, Snitow & Pauley, P.C., New York City, for applicants.

Asst. Atty. Gen. Stephen A. Trott, Dept. of Justice, Washington, D.C., William C. Bryson, Dept. of Justice, Washington, D.C., Paul J. Larkin, Jr., Dept. of Justice, Washington, D.C., for the government.

MEMORANDUM AND ORDER

GLASSER, District Judge:

An application was submitted to this Court on behalf of Ronald A. Schiavone and the Schiavone Construction Company (the "Applicants"), requesting the Court to appoint one or more members of the Bar of the Court to serve as independent counsel, to investigate whether Mario Montuoro gave false evidence and made false statements in violation of Federal law and to prosecute for any violation of Federal criminal law warranted by that investigation. During the course of oral argument, the Government moved for leave to intervene, which was granted.

The application is based upon the following allegations:

Mario Montuoro has a criminal record that includes four arrests, one in 1969 for possession of heroin, and one in 1974 for possession of a gun;

Montuoro has an established relationship with the United States Department of Justice as an informer. For example, in an organized crime case in 1981, Montuoro was a witness on behalf of the prosecution, and the defendant was convicted;

Montuoro's cooperation with the Justice Department might have stemmed from motives of revenge against people about whom he has given information, and, in view of his criminal record, from a desire to ingratiate himself with the prosecutor's office;

In 1979 and thereafter, Montuoro told Federal agents, including members of the Federal Organized Crime Strike Force in Brooklyn, that Raymond J. Donovan and Ronald A. Schiavone, as officers of Schiavone Construction Company, were guilty of participating in an illegal cash payment to a union officer. The payment was said to have been made at a luncheon at Prudenti's Restaurant in May or June of 1977;

In 1981, Raymond J. Donovan became Secretary of Labor of the United States. Later the same year, a division of the United States Court of Appeals for the District of Columbia Circuit appointed Leon Silverman Special Prosecutor, expressly to investigate Montuoro's allegation about the luncheon at Prudenti's;

Under an order of the United States District Court for the Eastern District of New York, issued at the request of the Special Prosecutor, Montuoro testified before a grand jury, and repeated the allegation regarding the luncheon at Prudenti's. The grand jury unanimously returned a no true bill on the allegation;

After an exhaustive investigation of Montuoro's allegation, the Special Prosecutor found that Montuoro's specifications of dates were "inconsistent," that his attempts to relate the luncheon to other events "proved to be illusory," and that there is "no evidence corroborating Montuoro's assertion that any Prudenti's lunch attended by Messrs. Donovan, DiCarolis, Schiavone, Lugori, Sanzo, and Montuoro himself occurred at or near the time he alleged or, for that matter, at any other time examined in the course of this investigation." In short, the Special Prosecutor concluded that "no credible evidence exists that a luncheon as alleged by Montuoro ever occurred;"

Montuoro's conduct, as described in the preceding paragraphs, would justify indictments against him for several federal crimes, including Perjury (18 U.S.C. § 1621), False Declaration Before a Grand Jury (18 U.S.C. § 1623), False Statements (18 U.S.C. § 1001), Obstruction of Justice (18 U.S.C. § 1505), and/or Contempt (18 U.S.C. § 401);

Although formal requests have been made of the Justice Department by Ronald Schiavone that Montuoro be prosecuted, the Department has not sought any indictment of Montuoro. The statute of limitations has now run on Criminal Contempt, but has not yet run on the other crimes.

Affidavits by six persons characterized as highly qualified experts on the professional responsibilities of prosecutors¹ are submitted in support of the application. Those persons are unanimous in their conclusion that members of the Department of Justice have a conflict of interest in violation of applicable standards of professional conduct with regard to investigating and prosecuting Mario Montuoro and that this Court should resolve the conflict of interest by appointing independent counsel to investigate and, if warranted, prosecute Montuoro. Federal authority for such an appointment in a case such as this is not furnished in any of those affidavits.

I.

A variety of arguments are urged upon the Court to move it to grant the requested relief. Only those deemed relevant to the crucial question of the jurisdiction and authority of the Court to grant the application will be considered.

A. Inherent Power of the Court

The Applicants leap from the conflict of interest postulate to the inherent power of the Court to appoint a special prosecutor to resolve the conflict. That inherent power, it is argued, has a long common law tradition, antedating the Constitution. The authority advanced are state cases in many of which the courts are authorized by statute to appoint special prosecutors and others where the state courts have, indeed, asserted power to appoint special prosecutors where the official prosecutor was sick or otherwise disqualified.² The concept of "inherent power" is like a ghost that is seen in the law but is elusive to the grasp. In Smith v. Gallagher, 408 Pa. 551, 574, 185 A.2d 135, 146 (1962), Justice Musmanno, in responding to the argument that a court had inherent power to convene a special grand jury in a "highly specialized situation," characterized it as follows: "This is an argument which sails a sea glittering with generalities, from which there emerges not a solid rock of jurisprudence on which one can stand and assert a tangible rule, or palpable principle, recognizable in law." Notwithstanding such state authority as there may be for the Application, there is no federal authority, either statutory or judicial, that would support it in a case such as this.

In addition, the Applicants assert that from the earliest days of the common law "an aggrieved party has had the right in England to prosecute criminally, for the vindication of private as well as public wrongs." It should be noted in this regard that in England the prosecution of offenses was left entirely to private persons or to public officers who acted in their capacity of private persons and who had hardly any legal powers beyond those which belonged to private persons. 1 F. Stephen, A History of the Criminal Law of England, 490-96 (1883). The power to institute prosecutions did not carry with it unlimited control over them when they were instituted. When a charge was made, the maker of it was usually bound over to prosecute and when the bill was sent before the Grand Jury the matter was entirely out of the original prosecutor's hands and must run its course unless the Attorney General, as the representative of the Crown, enters a nolle prosequi which operates as a stay of the proceedings. 1 F. Stephen, supra, 496. The Attorney General's discretion to enter a nolle prosequi was unfettered and never interfered with by the English courts even if in doing so, he abused his power. Regina v. Allen, 121 Eng.Rep. 929, 931 (K.B. 1862).³

The English practice of private prosecution never took root in American soil. The public prosecution of crime in the United States antedated the independence of the Colonies. The early settlers, dissatisfied with the shortcomings of a system of private prosecution, recognized the necessity of having criminal prosecutions conducted by impartial government officials rather than by interested private parties. See, The Outmoded Concept of Private Prosecution, 25 American University Law Rev. 754, 756-65 (1976); see also The Special Prosecutor in the Federal System: A Proposal, 11 American Cr.L.Rev. 577, 604 (1973); Private Prosecution: A Remedy for District Attorneys' Unwarranted Inaction, 65 Yale L.J. 209, 223 (1955); Linda R.S. v. Richard., 410 U.S. 614, 619, 93 S.Ct. 1146, 1149, 35 L.Ed.2d 536 (1972) ("In American jurisprudence at least a private citizen lacks a judicially cognizable interest in the prosecution or non-prosecution of another").

B. Appointment of Prosecuting Attorneys in Civil Cases

The Applicants find succor in the civil cases of which Musidor B.V. v. Great American Screen, 658 F.2d 60 (2d Cir. 1981) is a paradigm, in which courts have appointed the attorney for one party to prosecute criminal charges (contempt) against the other party without a finding that the United States Attorney is unable to act. Those cases are clearly distinguishable and the basis for the distinction is readily to be found in a reading of them. In the oft-cited case of McCann v. New York Stock Exchange, 80 F.2d 211 (2d Cir.1935), Judge L. Hand had occasion to comment upon some differences between criminal and civil contempt in these terms:

Criminal prosecutions, that is, those which result in a punishment, vindictive as opposed to remedial, are prosecuted either by the United States or by the court to assert its authority. The first are easily ascertainable; they will be openly prosecuted by the district attorney; it would not seem to be of consequence how they are entitled when that is true. In the second the court may proceed sua sponte without the assistance of any attorney, as in the case of disorder in the courtroom; there can be little doubt about the kind of proceeding when that is done. But the judge may prefer to use the attorney of a party, who will indeed ordinarily be his only means of information when the contempt is not in his presence. There is no reason why he should not do so, and every

...