U.S. v. Garcia

• Decision Date: 22 April 1993
• Docket Number: 577,D,Nos. 576,578,s. 576
• Citation: 992 F.2d 409
• Parties: UNITED STATES of America, Appellee, v. Robert GARCIA, Jane Lee Garcia, Ralph Vallone, Jr., Defendants-Appellants. ockets 92-1370(L), 92-1371, 92-1401.
• Court: U.S. Court of Appeals — Second Circuit

Page 409

992 F.2d 409

UNITED STATES of America, Appellee, v. Robert GARCIA, Jane Lee Garcia, Ralph Vallone, Jr. Defendants-Appellants.

Nos. 576, 577, 578, Dockets 92-1370(L), 92-1371, 92-1401.

United States Court of Appeals Second Circuit.

Argued Jan. 8, 1993.

Decided April 22, 1993.

Barry A. Bohrer, New York City (Joel M. Cohen, of counsel), for defendants-appellants Robert Garcia and Jane Lee Garcia.

Alexander E. Eisemann, New York City (Lawrence S. Goldman, of counsel), for defendant-appellant Ralph Vallone, Jr.

Michele Hirshman, Asst. U.S. Atty., S.D.N.Y., New York City (Roger S. Hayes, Acting U.S. Atty., Paul G. Gardephe, Asst. U.S. Atty., of counsel), for appellee United States of America.

Before: PRATT, FRIEDMAN, ^* and MAHONEY, Circuit Judges.

FRIEDMAN, Circuit Judge:

Former New York Congressman Robert Garcia, his wife, Jane Lee Garcia, and Ralph Vallone, Jr., appeal their jury convictions for, respectively, (1) extortion under color of official right, (2) aiding and abetting extortion and conspiracy to commit extortion, and (3) aiding and abetting extortion. We hold that the district court improperly charged the jury on extortion, 774 F.Supp. 848, and, therefore, reverse the convictions and remand for a new trial.

I

A. Mr. Garcia was elected to Congress in 1978 to represent the Bronx district where the Wedtech Corporation, a defense contractor, was located. Beginning early in his first term, Garcia maintained a close relationship with Wedtech, aiding it in obtaining financing from the Economic Development Administration and a loan from Citibank in 1979. In 1981, Garcia helped Wedtech obtain a loan from the Small Business Administration and funding from Urban Development Action grants. That same year, John Mariotta, a top Wedtech officer, and his wife Jennie, contributed $4000 to Garcia's campaign. Wedtech's other officers, their spouses, and company employees also made numerous contributions to Garcia's campaign fund.

1. The $86,000 "Retainer" Payments. In May 1984, Garcia invited Mario Moreno, a Wedtech officer who was the government's primary witness at trial, to dinner at Lelo's Restaurant in Manhattan, where Mrs. Garcia also was present. After Moreno described the work Wedtech was doing, the problems it had with its contract to build pontoons for the Navy and its interest in obtaining a contract to produce mail containers for the Postal Service, Garcia told Moreno

that he had already served for a few years in Congress and that he belong [sic] to the Banking Committee, the Postal Service Committee, and that he was getting very interested in international relations, and that he was also a member of the Hispanic caucus in Congress ... and that the more times you are elected to the Congress you become a more powerful person.

Garcia suggested that Wedtech hire his wife as a public relations consultant. Moreno told the Garcias:

"that's crazy because you are the congressman for this district, and I don't think that that is ... correct. And--and I don't think that we can do that. And, besides, what is she going to do at the company? We don't need any public relations person there because the company is involved in defense work, and there is no need for such a thing."

Mrs. Garcia responded:

"We could do a lot of things for you. We can set up those appointments to go and see [Secretary of the Navy] Lehman about the Navy contracts. We can also--we are very close friends of [Postmaster General] Bolger. We know him, and we can set up an appointment with him to see about those contracts."

Furthermore, she explained that she had " 'a friend in Puerto Rico [Vallone] that is like a brother to me. He is very close. We grew up together. And I think he could serve as intermediary for these payments.' "

Several days later, Moreno and the other Wedtech officers decided to make the payments to Mrs. Garcia through Vallone, a lawyer in Puerto Rico

because of the potential of the Postal Services contracts, that we knew that if those payments were not made, and even if the Congressman wanted to help us like he had done in the past, we realized and I personally told [the other officers] that his wife would not let him do any additional favor for Wedtech, and in a sense, we could kiss the Postal Services contracts, potential contracts, good-bye.

About six weeks later, Moreno told Mrs. Garcia that Wedtech had agreed to make the payments to her through Vallone. Soon after, Vallone called Moreno and

[h]e told me that Jane had spoken to him about the transaction, and that he had agreed to do that for her only because she was like a sister to him, that he didn't do that for anybody else.

Vallone and Moreno arranged for Vallone's law firm to bill Wedtech.

From August 1984 through May 1986, Wedtech paid $86,000 in monthly "retainers" of $4100 to Vallone, who performed no services for Wedtech. Vallone, in turn, for his law firm, paid $76,000 in alleged consulting fees to Mrs. Garcia's business, Leesonia Enterprises.

After the payments began, Garcia spoke with the Postmaster General about contracting with Wedtech to provide postal containers. Frank Hansen, the general manager of the Postal Service's Office of Procurement, testified that Postmaster General Bolger called him in August 1984 and asked that Hansen "check out" Wedtech as a source of metal-fabricated products. In April 1985, the Postal Service contracted with Wedtech to build mail containers. During this time, Moreno learned that the House Small Business Committee was investigating Wedtech and Moreno requested that Garcia intercede on their behalf.

In 1985, Wedtech experienced a "severe cash problem," and stopped making payments to the Garcias between February and August. Both Mrs. Garcia and Vallone called Moreno to inquire why the payments were not being made, and Moreno explained the financial difficulties the corporation was undergoing. Nonetheless, at Garcia's request, Wedtech officer John Mariotta, in March 1985, donated $65,000 from Wedtech's "slush fund" to the church run by Garcia's sister.

Wedtech's economic situation remained precarious and in late August or early September, Moreno asked Garcia, who was a member of the House Banking Committee, to intercede on Wedtech's behalf with three banks so the company could get needed financing. In September, at Garcia's request, Moreno met with the Congressman for lunch, and gave him a check for Vallone for $12,300 for past due "retainer" fees, and told him "that very soon we would bring the account up to date." Moreno and another Wedtech official

felt that it was very important to bring them up to date so that--so that all the activities where we could use him could continue in the best way, that means the contracts with the Post Office, the [contract to build] ferries in Puerto Rico, and primarily the problems with the banks at that time.

At lunch, Garcia told Moreno that he had contacted the head of one of the banks and was working on getting in touch with the other two. They also discussed the other projects with which the Congressman was assisting Wedtech.

Moreno, Mariotta, and their spouses traveled in mid-September to Puerto Rico to meet with officials there about contracts to build ferries. The Garcias also were in Puerto Rico at the time, and Mrs. Garcia arranged for Moreno, Mariotta, and the Congressman to meet with Puerto Rico's governor. The Governor agreed to help Wedtech get the contracts. The next day Mariotta gave Mrs. Garcia a diamond and emerald necklace on behalf of Wedtech. On the trip back to New York, Mariotta told Moreno that Wedtech had " 'better bring [the] account [with Vallone] up to date as soon as we get to New York.' "

Wedtech paid Vallone $20,500 in October, and $8,200 in November. In December, Mrs. Garcia called Moreno and told him "that she had a financial need, very urgent financial need at that point, and she told me that she wanted to get paid for the month [sic] of November and December." Moreno authorized the payment of $8,200 to Vallone. In March, at a dinner in honor of the Congressman, Moreno gave Garcia checks for Vallone for the past three monthly payments. This was the final payment Wedtech made to Vallone.

2. The $20,000 Loan. In August 1985, at a meeting that Garcia urgently requested, Garcia told Moreno that he needed to borrow $20,000 from Moreno. Moreno informed the Congressman that "my financial situation was not that good at that time, but that I was going to see what I could do." Garcia assured him that it would be "a straightforward loan, and that it would include interest."

Moreno went to Wedtech and had a check drawn on the "slush fund" for the fifteen percent of the fund that was due him after "illegal expenses had been paid out of the ... account," and for an additional $20,000 to cover the check he was about to write to Garcia. At Garcia's direction, Moreno made the check out to the Congressman's sister, Reverend Aimee Cortese, with the understanding that Garcia "didn't want his name to appear along with [mine]" on the check. That same day, Mrs. Cortese made out a check for $20,000 to Mrs. Garcia. Moreno made the loan "[b]ecause I thought that if I didn't give that loan, he was not going to--to continue doing things for the company, especially since we had not paid him the regular retainer for the previous few months."

In February 1986, Garcia invited Moreno to his home and told Moreno that he was going to repay the $20,000 loan, although without interest. He asked Moreno, however, not to take the money back but instead to donate it to the church run by Garcia's sister. Moreno declined to do so and received a check for the amount of the loan drawn on Mrs. Cortese's bank account.

B. Following the return of a seven-count indictment in November 1988 against the Garcias and Vallone, a jury convicted the Garcias on three counts charging violations of the Hobbs Act, 18 U.S.C. § 1951 (1988). This court, however, reversed the convictions...