U.S. v. Davis, 88-1769

Citation890 F.2d 1373
Decision Date21 November 1989
Docket NumberNo. 88-1769,88-1769
Parties29 Fed. R. Evid. Serv. 175 UNITED STATES of America, Plaintiff-Appellee, v. Wallace DAVIS, Jr., Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Caryn Jacobs, Asst. U.S. Atty., Anton R. Valukas, U.S. Atty., David J. Stetler, Howard M. Pearl, Asst. U.S. Attys., Office of the U.S. Atty., Crim. Receiving, Appellate Div., Chicago, Ill., for plaintiff-appellee.

Paul Bradley, Chicago, Ill., Gary Ritvitz, for defendant-appellant.

Before BAUER, Chief Judge, EASTERBROOK, and MANION, Circuit Judges.

BAUER, Chief Judge.

Wallace Davis, Jr. once served as the Alderman and Democratic Committeeman for the 27th Ward of the City of Chicago. In addition to his participation on the City Council, Davis was also employed as a City employee. An undercover investigation by the Federal Bureau of Investigation revealed that Davis often confused civic service with abuse of his office. In short, Davis was a local politician who "seen his opportunities and he took 'em." 1 Davis's political opportunism led to a grand jury indictment charging him with racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Sec. 1962(c); three counts of extortion in violation of 18 U.S.C. Sec. 1951; and one count of making a false statement to federal agents in violation of 18 U.S.C. Sec. 1001. A jury convicted Davis of all of the charges except for one of the extortion counts and its corresponding charge as a racketeering act. In this appeal, Davis challenges certain portions of his conviction on a number of grounds and the factual basis for his sentence.


The grand jury indicted Davis based upon the defendant's activities as an alderman in relation to five distinct events. The evidence adduced at trial, when seen in a light most favorable to the prosecution, reveals that Davis' conduct relative to those events consisted as follows.

1. The SRS Scheme: "Things Ought to be Fixed Up Nice and Quiet." 2

In the spring of 1985, the City of Chicago awarded a contract to the Datacom Company to collect over $600 million in overdue parking fines owed to the City. A competing New York company, Systematic Recovery Systems, Inc. ("SRS"), was not content with the City's award decision. Accordingly, SRS entered into a campaign to discredit Datacom and wrest the potentially lucrative contract away. SRS's president, Bernard Sandow, admitted at trial that SRS had obtained similar contracts in New York through bribing public officials. Intent on employing the same strategy in Chicago, SRS hired Michael Burnett to spearhead SRS's objectives relative to the Chicago collections contract. Sandow instructed Burnett to "do whatever you have to bring in the Parking Violation Bureau account in Chicago." Unbeknownst to Sandow or SRS, Burnett was subsequently arrested by FBI agents on charges unrelated to the SRS campaign. Upon his arrest, Burnett informed the agents about the impending SRS campaign and agreed to cooperate with the FBI by recording his meetings with Chicago City officials.

One of Burnett's initial tape-recorded meetings in Chicago was with Alderman Perry Hutchinson. Burnett offered Hutchinson $10,000 to sponsor a City Council resolution requesting an investigation of Datacom. Hutchinson agreed to do so, and the two discussed their strategy, including purchasing the support of additional aldermen for the purpose of overriding the Washington Administration's probable opposition to the investigation. Hutchinson assured Burnett that in addition to the twenty-nine aldermen who invariably opposed the Washington Administration, "[t]here are a couple of guys I can always pick up like Wallace Davis." Burnett then began to solicit Davis's support, at first through Hutchinson and then directly. Burnett and Davis finalized their arrangement over dinner at a public restaurant on December 16, 1985. During their discussions, Burnett, who was wearing a "wire," noted that SRS was willing to pay the price to achieve its objective. Seeking to clarify what that "price" was and terms of their arrangement, Davis asked, "[w]hat kind of numbers are we talking about?" Burnett responded:

I'll drop five on you initially. And I'll have another five for you, right after the first of the year and you'll have all the support in the world for your organization. Give me a wish list. Tell me what you want. You'll get it ... Ah, as soon as they're knocked outta the box, I'll deliver a major number to you. Alright? You gotta quarter coming down when they're outta the box and we're in the box. Now that's over and above the ten, that I'm talking about.

* * *

* * *

I pay cash, and cash is always the problem ... I ain't gonna give you a check.

Subsequent to the dinner meeting, Davis and Burnett met on December 19, 1985, at Burnett's apartment. At this tape-recorded meeting, Davis accepted $5,000 in cash from Burnett in a transaction that was witnessed by Raymond Akers, Jr., Burnett's assistant. Upon paying Davis the money, Burnett explained:

Wallace, here's five, the other five after the first of the year. And when Datacom is out you got a quarter and your organization is on with us all the way, whatever you need.

Davis took the money and assured Burnett that he was a "team player" who would "be right there with you 100%." Akers testified that he witnessed Davis accept a stack of bills from Burnett that looked like a stack equal to $5,000.

2. The Condemnation Action: "Men Ain't in Politics for Nothin'." 3

In the fall of 1983, the City initiated a condemnation action against a building located in Davis's ward. Charles Scala and William Kasten owned the building and the restaurant which it housed. Because they wanted to keep both the building and the restaurant, they sought to challenge the condemnation action. They also wanted to obtain the City's approval to purchase a lot adjacent to their building. They contacted Davis to obtain his support. Under the practices of the City Council, the ward alderman's support was a central factor effecting the Council's ultimate action on such matters. After Davis promised to help Scala and Kasten, he approached Scala while both the condemnation and purchase decisions were still pending before the City Council and asked for $3,000 in cash. Scala testified that because he believed that he needed Davis's support, he and Kasten borrowed the money from their fathers to make the payment. When Scala went to Davis's home to make the payment, Davis met him at the door, accepted the money, and assured him that "things will be done." Subsequent to the payment, the City dropped the condemnation action after Davis threw his support behind the interests of Scala and Kasten. Scala testified that in light of this result, he believed that he got the services he paid for.

3. The Nepotism Scheme: "[S]he Ponies Up--All From Gratitude." 4

In August of 1984, Davis employed his niece, Etta Harris, as his aldermanic secretary, a $21,000 position on the City's payroll. Upon hiring Harris, Davis instructed her to have her bi-weekly payroll check sent to him. Davis told Harris that upon receiving the check from her, he would have her sign it. He would then cash it and pay her $320 out of the proceeds. Davis kept the remaining portion of her salary for himself.

Prior to the spring of 1985, Davis paid Harris $320 out of her payroll check except on a few occasions over the holidays when he allowed her to keep her entire check. When Harris demanded that more of her check be paid to her, Davis told her that it was the best he could do because "I have to pay somebody else." On two occasions Davis told Harris if she wanted more money, she would be better off drawing unemployment. For example, Harris testified that in response to one of her requests, Davis stated that:

... he had to pay someone off--when I paid him, he had to pay someone; and that if I couldn't go by his rules, that maybe I would get more drawing unemployment.

Davis eventually agreed to increase Harris's share of her paycheck to $400. However, on Thanksgiving Day of 1985, Davis fired Harris, telling her that he did not want people to find out that he had his niece on his aldermanic payroll.

4. The Denial of the SRS Campaign: "Accused of Graftin' " 5

On December 20, 1985, FBI agents went to Davis's home to interview him about the December 16, 1985 dinner meeting with Burnett concerning the SRS campaign and the December 19, 1985 payoff meeting with Burnett. Davis told the agents that he did not attend the dinner, which had been organized by another alderman. Davis also told the agents that he never met anyone from SRS, that SRS representatives never offered him money in exchange for his support, and that he never accepted any money from SRS representatives. He explained to the agents that it was his understanding that a company called Datacom had been awarded the collection contract.

5. Holding Up City Council Action: "the Ingratitude in Politics." 6

From March through November of 1985, Davis supported the plans of the Wertheimer Box and Paper Company ("WBPC") to purchase city-owned property located in Davis's ward. The WBPC's request was approved by both the Chicago Department of Economic Development and the City Council. The only remaining obstacle to the sale was the City Council's requirement that an ordinance be passed granting the sale. On one occasion in late December of 1985 and one occasion in early January of 1986, Davis approached Jay Wertheimer, the owner of the WBPC, and asked him for a personal loan and a campaign contribution. Although Council action on WBPC's plan was still pending, Wertheimer refused Davis's request. On April 8, 1986, Davis asked that the City Council "hold" any action relating to the ordinance allowing WBPC to purchase the property. Jay Wertheimer testified that when he contacted Davis to inquire about the delay in...

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