U.S. v. Garrett

• Decision Date: 19 September 1983
• Docket Number: No. 82-2147,82-2147
• Citation: 716 F.2d 257
• Parties: 14 Fed. R. Evid. Serv. 366 UNITED STATES of America, Plaintiff-Appellee, v. John GARRETT and L.G. Moore, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 257

716 F.2d 257

14 Fed. R. Evid. Serv. 366

UNITED STATES of America, Plaintiff-Appellee, v. John GARRETT and L.G. Moore, Defendants-Appellants.

No. 82-2147.

United States Court of Appeals, Fifth Circuit.

Sept. 19, 1983.

Rehearings and Rehearing En Banc Denied Nov. 22, 1983.

Robert B. Wallis, Clinard Hanby, Houston, Tex., for John Garrett.

Mike Ramsey, Houston, Tex., for L.G. Moore.

Daniel K. Hedges, U.S. Atty., John M. Potter, James R. Gough, Asst. U.S. Attys., Houston, Tex., for plaintiff-appellee.

Appeals from the United States District Court for the Southern District of Texas.

Before WISDOM, TATE, and GARWOOD, Circuit Judges.

TATE, Circuit Judge:

The defendants John Garrett and L.G. Moore appeal their conviction by a jury under 18 U.S.C. Secs. 2, 1952(a)(3) ("The Travel Act") ¹, for aiding and abetting one another in using and causing to be used a facility in interstate commerce with the intent to carry on a bribery scheme. The jury found that Garrett and Moore offered and agreed to offer a bribe to a Houston, Texas city councilman for his recommendation and vote in awarding a contract of group insurance for the city's public employees. In facilitation of this unlawful scheme, the jury found, they caused to be used a facility in interstate commerce when Moore placed a long distance telephone call from Houston, Texas to a federal undercover agent in Beverly Hills, California, on December 27, 1979.

On appeal, the defendants challenge the sufficiency of Travel Act jurisdiction premised on an out-of-state phone call made to a federal agent. They claim that jurisdiction was artificially created because the requisite interstate element was supplied by the location of the federal agent, and that the call did not "facilitate" the underlying state offense. Garrett and Moore also contend that they were entrapped by the federal agents into performing unlawful acts, and that the government's conduct was so outrageous as to constitute a violation of due process. Garrett argues that the evidence adduced at trial displayed his absolute lack of predisposition to commit bribery, such that he established entrapment as a matter of law. Moore contends that he was unable to make out the defense because the trial court refused to admit certain evidence of the government's inducements and testimony of witnesses that would tend to show lack of predisposition. Moore additionally argues that the trial court's determination to admit hearsay evidence of a taped conversation concerning his reputation as someone who would "deal" denied him federal constitutional confrontation and fair trial rights.

We find that on the evidence shown, the trial judge did not reversibly err in making these jurisdictional and evidentiary rulings. We therefore affirm the convictions.

Factual and Procedural Background

These Travel Act convictions are a result of a federal undercover operation that centered upon the suspected illegal activities of labor unions in promoting and contracting for insurance and pension benefits. In 1979, Joseph Hauser pleaded guilty to federal charges of paying bribes and receiving kickbacks in union insurance business; in return for a reduced sentence and financial support of himself and his family, he agreed to cooperate with the government in investigating this type of crime. Hauser and two F.B.I. agents, Mike Wacks and Larry Montague, established a fictitious insurance agency known as Fidelity Financial Consultants, with an office in Beverly Hills, California and a cover by which they would purport to represent the Prudential Insurance Company, a large national concern. Their initial plan was for Hauser to expose corruption among labor leaders by bribing them to acquire union insurance through Fidelity.

The agents decided to expand operations outside California (at least in part because of publicity that Hauser was a government informer), and, because of Hauser's contacts, began to arrange insurance deals in Texas and Louisiana. ²

The jury trial took place over 27 days of testimony. The defendants were charged on a conspiracy count and two Travel Act counts; after four days of deliberations, the jury convicted on one Travel Act count, but was unable to agree on a verdict on the conspiracy or other Travel Act count. The government's case was presented during 19 days of testimony, most importantly the testimony of Hauser and the two F.B.I. agents, corroborated by tapes of conversations with the alleged conspirators and tapes of telephone conversations with them. The defendants' case was presented in eight days of testimony.

Aside from establishing that the insurance contract to Prudential at issue had been awarded on its merits in accord with the recommendation of the Texas Municipal League, and numerous character and reputation witnesses for both defendants, the defendants' case relied principally upon their own extensive testimony on the stand by which they presented a lawful explanation for their actions. The substance of the explanation is that they were merely exploiting their political friendships in order to earn a share of a commission for the insurance contract (not in itself unlawful under Texas law), and that the money subsequently given to the city official was a campaign contribution, not a bribe. Garrett also relies upon his initial protestations, in the conversations that unknown to him were being taped, that he did not wish to participate in any illegal activity.

The government's essentially uncontradicted evidence shows the following:

In August, 1979, Hauser contacted a Texas acquaintance, who put him in contact with Harold Grubbs, a labor official in Houston, on the recommendation that Grubbs would split commissions on insurance deals "fifty-fifty." In a tape-recorded meeting, ³ Grubbs told Hauser about a union official, the defendant L.G. Moore, whom Grubbs described as "someone who would deal" and was "on the take." (On appeal, Moore objects to the use of this tape, GX 7, as highly prejudicial.)

Grubbs introduced Hauser to Moore to discuss the possibility of Moore's obtaining insurance business for Fidelity. Moore discussed his union connections in many states and indicated that insurance coverage for Texas school and hospital districts may be available. Moore, Hauser, and F.B.I. agent Mike Wacks met on September 10, where Moore accepted $2000 from Hauser and the three discussed potential business and potential commissions (a sum of $600,000 was mentioned) that Moore could make. Moore named the defendant Garrett, the President of Richmond Road Engineering and a commissioner of the Port of Houston, as a "deal-maker" who could help them make additional connections for insurance contracts.

Moore introduced Garrett to Hauser and agents Wacks and Montague in October, asking for some "inside wires on the insurance business with Prudential." Garrett called Houston City Councilman Jim Westmoreland at that time to ask him about obtaining for Fidelity and Prudential the city employees' insurance coverage that was going to become open for bidding. This insurance contract becomes the focus of subsequent meetings and dealings, although other future and simultaneous deals were discussed and, for the most part, kept from the jury.

Garrett arranged to meet with Councilman Westmoreland after the November City Council election. At a November 28, 1979 meeting of Garrett, Moore, Wacks, and Montague, Garrett turned down an offer of cash but stated that he wanted a fifty percent split of the agents' commissions, which he would then split with Moore. He again called Westmoreland to discuss the Houston employees' insurance contract, telling the others that he "did not mind spending a few dollars if it looks like ... we have to motivate the works for us."

At the time of these discussions, the Houston City Council was negotiating and soliciting bids in preparation for the January, 1980 expiration of insurance coverage of 25,000 city employees. Without consulting the government agents posing as Prudential/Fidelity agents, Prudential Insurance Company had itself prepared a bid, as did at least four other major companies. The Texas Municipal League ("the League"), a commission representing over two hundred cities in Texas that sought to combine the bargaining power of the cities in order to obtain favorable insurance coverage for the municipalities, independently reviewed the insurance available and, coincidentally, adopted Prudential's plan. The contract finally signed by the City Council on December 26, 1979 was with the League, which contracted with a Texas insurance company that in turn contracted with Prudential to provide the coverage. (It is clear that the League had nothing to do with the efforts to bribe Westmoreland, and that it had independently selected what it considered the best coverage at the lowest price.)

Garrett and Moore's primary efforts in late November and December were to arrange matters so that Prudential would be selected for the new city insurance business that would produce a commission (according to the bogus agents) of around one million dollars. The defendants talked often to government agents Montague and Wacks. (Hauser had disappeared entirely from the scheme because he began serving his prison sentence; Moore knew the fact of Hauser's imprisonment, but explained his absence to Garrett by telling Garrett that Hauser was sick.) Moore telephoned the government agents, who had returned to California, in order to discuss progress of the insurance selection by the Council.

On December 11, Moore, Garrett, Wacks and Montague again met at Garrett's office in Houston to discuss payment of commissions and an upcoming meeting with City Councilman Westmoreland. The agents asked how much to give Westmoreland, and at Garrett's suggestion, they agreed to pay Westmoreland no more than $2000 at the first meeting.

That evening, the four waited at a hotel bar for Westmoreland,...