U.S. v. Brecht

• Decision Date: 16 July 1976
• Docket Number: No. 953,D,953
• Citation: 540 F.2d 45
• Parties: UNITED STATES of America, Appellee, v. Arthur BRECHT, Defendant-Appellant. ocket 76-1049.
• Court: U.S. Court of Appeals — Second Circuit

Page 45

540 F.2d 45

UNITED STATES of America, Appellee, v. Arthur BRECHT, Defendant-Appellant.

No. 953, Docket 76-1049.

United States Court of Appeals,

Second Circuit.

Argued April 21, 1976.

Decided July 16, 1976.

Sheila Ginsberg, The Legal Aid Society, New York City (William J. Gallagher, The Legal Aid Society, New York City, of counsel), for defendant-appellant.

Cheryl M. Schwartz, Asst. U. S. Atty., Brooklyn, N. Y. (David G. Trager, U. S. Atty., and Paul B. Bergman, Asst. U. S. Atty., Brooklyn, N. Y., of counsel), for appellee.

Before MOORE, FEINBERG and GURFEIN, Circuit Judges.

GURFEIN, Circuit Judge:

This is an appeal by Arthur Brecht from a conviction on three counts of an indictment entered in the United States District Court for the Eastern District of New York (Jack B. Weinstein, Judge ) after a jury trial. Appellant was convicted on Counts One, Four and Six. Count One charged a violation of 18 U.S.C. § 1951 (the Hobbs Act), an interference with interstate commerce by means of extortion. ¹ Counts Four and Six charged a violation of 18 U.S.C. § 1952 (the Travel Act), by travel between Pennsylvania and New York to carry on an unlawful activity, namely, larceny by extortion and commercial bribe receiving in violation of Sections 155.05(2)(e)(ix) and 180.05 of the New York Penal Law. ² Appellant was sentenced to concurrent terms of two years' imprisonment on each count. Execution of the sentence was suspended, and a period of three years' probation was imposed.

Appellant Brecht was employed by Westinghouse Electric Corporation of Lester, Pennsylvania ("Westinghouse") as manager of its technical publications group. Westinghouse held a $23,000,000 prime contract with the El Paso Electric Company of El Paso, Texas ("El Paso"), for the construction of a power generating plant at Newman, Texas. Under this contract, Westinghouse had the responsibility to deliver to El Paso various technical manuals explaining the operation and maintenance of Westinghouse's equipment. National Technical Publications, Inc. of Dix Hills, New York ("National"), was in the business of producing technical manuals and publications for prime contractors in various states and had submitted a bid for the production of the technical manuals and publications required by Westinghouse for delivery to El Paso. National was substantially engaged in interstate commerce and Joseph Racker ("Racker") was its President.

The evidence presented at trial showed that appellant had the discretion to determine whether the required technical manuals would be produced "in house" or by subcontractors, and that his selection of a subcontractor had always been approved by Westinghouse. The evidence also showed that after National had submitted its bid on the manuals, Racker travelled from Pennsylvania to New York and met with appellant to discuss the bid. At these meetings, appellant demanded a $1,000 kickback as a condition for the award of the contract to National. After Racker received the first demand for a kickback, he contacted the FBI, and the FBI arranged for him to tape his subsequent meetings with appellant. At appellant's final meeting with Racker, Racker handed to appellant an envelope containing a $500 check and five $100 bills. After the meeting, appellant was arrested by FBI agents, and the envelope containing the check and the cash was found on his person.

Appellant's sole theory of defense was that Racker had paid him the money as the purchase price for 215 shares of stock of the Ace Publishing Corporation. The jury rejected this defense and convicted appellant on three counts of the indictment.

At the close of the government's case, the appellant moved for a judgment of acquittal on the Travel Act counts, arguing inter alia, that "commercial bribery" is not encompassed by the word "bribery" in the Travel Act. In a separate motion on the Hobbs Act count, appellant argued that the evidence was insufficient to establish extortion.

I.

We first consider whether the government has proved a crime under the Travel Act, 18 U.S.C. § 1952, which proscribes interstate travel to promote any "unlawful activity," including "bribery . . . in violation of the laws of the State in which committed." The prosecution contends that the term "bribery" used in § 1952 embraces "commercial bribe receiving" as defined in Section 180.05 of the New York Penal Law. Section 180.05 provides as follows:

"An employee, agent or fiduciary is guilty of commercial bribe receiving when, without the consent of his employer or principal, he solicits, accepts or agrees to accept any benefit from another person upon an agreement or understanding that such benefit will influence his conduct in relation to his employer's or principal's affairs.

"Commercial bribe receiving is a class B misdemeanor."

Appellant contends that "commercial bribery" is not subsumed under "bribery" but is an offense of a different kind.

The district judges in this circuit have been sharply divided on this issue. See United States v. Niedelman, 356 F.Supp. 979, 981 (S.D.N.Y.1973) (Knapp, J.). The Fourth Circuit has rejected appellant's contention, United States v. Pomponio, 511 F.2d 953 (4 Cir.), cert. denied, 423 U.S. 874, 96 S.Ct. 142, 46 L.Ed.2d 105 (1975), reversing Judge Bryan who agreed with Judge Knapp. We respectfully disagree with the Fourth Circuit. ³

As the Supreme Court has noted, ("b)ribery has traditionally focused upon corrupt activities by public officials". United States v. Nardello, 393 U.S. 286, 293 n. 11, 89 S.Ct. 534, 538, 21 L.Ed.2d 487 (1969). ⁴ The traditional common law definition of bribery was limited to the "giving or receiving of anything of value in corrupt payment for an official act." Bishop on Criminal Law § 85(1), at 62 (9 ed. 1923) (emphasis added). "The term 'commercial bribery' is of relatively recent origin." Clark & Marshall, A Treatise on the Law of Crimes § 14.02, at 1037 (7 ed. 1968). ⁵ Since a purpose of the Travel Act was to lend aid to local law enforcement on a national basis, it is significant that in 1960, the year before the Travel Act was enacted, only thirteen states had commercial bribery statutes. Note, Control of Nongovernmental Corruption by Criminal Legislation, 108 U.Pa.L.Rev. 848, 864, 866 (1960) (chart).

The distinction between the traditional crime of bribery and the modern crime of commercial bribery is clear from the classification scheme of the New York Penal Law. The commercial bribery sections are found in Article 180 of the Penal Law, entitled "Bribery Not Involving Public Servants, and Related Offenses," while the sections dealing with bribery of public officials are in Article 200, entitled "Bribery Involving Public Servants and Related Offenses." The crime of "commercial bribe receiving," defined in § 180.05, is a Class B misdemeanor punishable by not more than three months' imprisonment, N.Y. Penal Law § 70.15(2), while the crime of "bribe receiving" by a public official, defined in § 200.10, is a Class D felony punishable by imprisonment of up to seven years. Id. § 70.00(2)(d). Furthermore, the New York statute on commercial bribery, as it existed in 1961, did not even use the word "bribe," but employed the more precise words "gift or gratuity." N.Y. Penal Law § 439 (McKinney 1944). ⁶

We must determine whether Congress intended to embrace commercial bribery within the scope of a statute which, as is clear from its legislative history, ⁷ was enacted for the purpose of punishing interstate travel in aid of racketeering enterprises engaged in by organized crime. As Mr. Justice Marshall stated for a unanimous Court in Rewis v. United States, 401 U.S. 808, 91 S.Ct. 1056, 28 L.Ed.2d 493 (1971), a case which gave a restrictive interpretation to the Travel Act, the "(l)egislative history of the Act is limited, but does reveal that § 1952 was aimed primarily at organized crime and, more specifically, at persons who reside in one State while operating or managing illegal activities located in another." 401 U.S. at 811, 91 S.Ct. at 1059.

The Court in Rewis cautioned that "an expansive Travel Act would alter sensitive federal-state relationships, could overextend limited federal police resources, and . . . would transform relatively minor state offenses into federal felonies." 401 U.S. at 812, 91 S.Ct. at 1059. Later the same year, in United States v. Bass, 404 U.S. 336, 349, 92 S.Ct. 515, 523, 30 L.Ed.2d 488 (1971), the Court again stressed that "unless Congress conveys its purpose clearly, it will not be deemed to have significantly changed the federal-state balance." The Bass Court also noted that "Congress has traditionally been reluctant to define as a federal crime conduct readily denounced as criminal by the States," and that "the broad construction urged by the Government renders traditionally local criminal conduct a matter for federal enforcement and would also involve a substantial extension of federal police resources." Id.

Guided by these principles, we said in United States v. Archer, 486 F.2d 670, 680 (2 Cir. 1973):

"While the precise holding of Rewis was that the proprietors of a Florida gambling establishment did not violate the Travel Act merely because some of their customers came from Georgia, a course of action foreseeable and even designed, the opinion indicates that the Act is not to be stretched to the limits of its language."

Judge Friendly, in Archer, after noting that the legislative history of the Travel Act indicated a primary concern with organized crime, observed that the Act "if read literally, would cover a $10 payment to fix a traffic ticket if only the person desiring the fix walked across a state line to pay off the policeman." 486 F.2d at 679.

The example given comes close to our case. Both the fixing of the ticket and the commercial bribe are, of course, morally reprehensible but they are violations of local law. As we have seen, the offense of "commercial bribe receiving" defined in ...