U.S. v. Hollinger

• Decision Date: 03 June 1977
• Docket Number: No. 76-1223,76-1223
• Citation: 553 F.2d 535
• Parties: 77-1 USTC P 9371 UNITED STATES of America, Plaintiff-Appellee, v. Philip HOLLINGER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 535

553 F.2d 535

77-1 USTC P 9371

UNITED STATES of America, Plaintiff-Appellee, v. Philip HOLLINGER, Defendant-Appellant.

No. 76-1223.

United States Court of Appeals Seventh Circuit.

Argued Dec. 6, 1976.

Decided April 22, 1977.

Rehearing and Rehearing En Banc Denied June 3, 1977.

Harry J. Busch, Sherman C. Magidson, Chicago, Ill., for defendant-appellant; Carl P. Clavelli, Chicago, Ill., of counsel.

Samuel K. Skinner, U. S. Atty., John L. Gubbins, Asst. U. S. Atty., Chicago, Ill., for plaintiff-appellee.

Before SWYGERT, PELL and BAUER, Circuit Judges.

PELL, Circuit Judge.

The defendant, Philip Hollinger, was charged in a fourteen count indictment on October 30, 1975. Counts 1, 3, 5, 7, and 9 charged that Hollinger wilfully and knowingly subscribed 1969 through 1973 income tax returns which he did not believe to be correct as to every material matter reported, in violation of 26 U.S.C. § 7206. ¹ Counts 2, 4, 6, 8, and 10 charged that Hollinger willfully and knowingly attempted to evade and defeat a large part of the income tax due and owing by filing false and fraudulent returns for the years 1969 through 1973, in violation of 26 U.S.C. § 7201. ² Counts 11 through 14 charged that Hollinger obstructed commerce by extortion by knowingly obtaining money from various named individuals and companies with their consent induced by the wrongful use of fear of economic harm and under color of official right in violation of 18 U.S.C. § 1951. ³

After a jury trial, Hollinger was convicted on all counts of the indictment and was subsequently sentenced to the custody of the Attorney General for a period of four years on each count. ⁴

During the years 1969 through 1973, Hollinger received cash payments of approximately $93,000 which he did not report as income on the tax returns he filed jointly with his wife, Anne M. Hollinger. During that period, Hollinger reported a total adjusted gross income of $47,620, calculated total taxable income as $32,309, and paid $5,587 in federal income taxes.

Viewing as we must the evidence in the light most favorable to the Government, Hollinger, serving as president of the Village of Brookfield, and by way of extortionate conduct, received during the years 1969 to 1971 the sum of $58,230 from William Hall, owner of the Berwyn-Stickney Tree Service. Similarly, Carl Rauschert, vice-president of National Power Rodding, paid over to the defendant the sum of $5,911.03 during the years 1969 to 1973, calculating his payments on the basis of five cents per lineal foot for sewer cleaning. Albert Berg, president and sole shareholder of A. E. Berg Company, Inc., contractor in 1972 for the construction of Brookfield's new municipal building, paid over to the defendant during that year the sum of $6,500. Louis Graben, a salesman for Business Interiors, which supplied the furniture for the new municipal building, paid over to the defendant during 1973 the sum of $5,500.

In sum, the individual victims named in counts 11 to 14 of the indictment paid out to the defendant a total of $76,141.03. Additionally, Hollinger received during the period the sum of $11,700 from Donald Smith, a licensed architect with the firm of Smith and Neubeck, which did the architectural work on the new municipal building. Frank Novotny, president of Frank Novotny and Associates, who acted as Brookfield's consultant on civil engineering during the years 1969 through 1973, delivered approximately $5,782 to Hollinger. Thus, the testimony indicated that Hollinger's real taxable income during the period was somewhere between $124,754 and $125,059. Hollinger paid taxes in the amount of $5,587, but the real tax liability was somewhere in the range $28,489 to $30,068.

Seven witnesses with first-hand knowledge and profuse supporting documentation testified to making coerced cash payments totalling over $92,000 to Hollinger over a five year period. Indeed, the defendant admitted receiving money from a number of the witnesses but explained that he kept cash contributions for Brookfield's People's Economy Party, using the funds according to the needs of PEP by making cash deposits into its bank account and by paying PEP bills with cash. Hollinger denied receiving monies other than approximately $25,000, which he characterized as "political contributions." The defendant's attempt to establish a political contributions defense did not explain what happened to a considerable portion of the monies. Viewing the evidence in the light most favorable to the Government, over $60,000 in cash payments which represented the proceeds of extortion was never accounted for.

No question of the sufficiency of the evidence arising in this appeal, the defendant urges reversal of the conviction on the grounds of instruction errors, the erroneous exclusion of Defendant's Exhibit No. 4, improper closing argument by the prosecutor, and the court's failure to dismiss the indictment.

I. Claimed Errors in Instructing the Jury

The defendant claims that the trial court committed reversible error in giving Instructions Nos. 42, 43, and 53. The Government contends that Hollinger cannot seek review of these instructions because of inadequate compliance with the requirements of Rule 30, Fed.R.Crim.P. As in Hetzel v. Jewel Companies, Inc., 457 F.2d 527, 534 (7th Cir. 1972), we think that some comment is appropriate regarding the district court's method of dealing with instructions and objections thereto.

The core of Hollinger's defense to the tax counts was that the monies he had received were political contributions which, even if extorted, would not constitute "taxable income" because such money was not "gain," and therefore, not income as defined by law. During the initial conference on tendered instructions, the defendant objected to the Government's proposed instructions defining taxable income (No. 42) and the duty to report such income (No. 43). Further, the defendant objected that a cautionary instruction regarding the limited use of evidence regarding Hollinger's actions and/or conduct prior to October 31, 1970, was inadequate (No. 53).

At the first instructions conference, the trial judge essentially agreed with the defendant that the instructions on taxable income were inadequate. The judge deleted the last two sentences of the Government's tendered No. 42, and the defendant acquiesced in that change. As to Instruction No. 43, the judge suggested a possible modification; and the Government counsel indicated that he would undertake to rewrite the instruction. ⁵ However, neither the Government attorneys nor the defense counsel ever rewrote the instruction to highlight the so-called political contributions defense, and the judge's charge to the jury actually included the original and unmodified Instruction No. 43. ⁶ Similarly, the trial judge attempted to formulate language that would satisfy defense counsel as to the claimed inadequacy of No. 53. The judge indicated that defense counsel could redraft it if they wanted to. One of the defense team indicated that it should be redrafted, but no defense attorney did so.

At the second instructions conference, there was no discussion of the modified Instruction No. 42. As to No. 43, the trial judge did not formally reread it. Defense counsel indicated that, apart from its lack of any language dealing with the element of willfulness, they saw nothing wrong with it as it stood. Finally, as to No. 53, the trial judge determined that it would be better to leave the language the way it was originally.

After the charge to the jury had been delivered and the jury had retired, the defense objected to the wording of Instruction No. 43, referring back to the objection they had raised in the initial instructions conference. The court noted that nobody had presented it with an instruction which, in effect, would have told the jury that if they found that any portion of the proceeds of the extortion was in fact a campaign contribution, that part of the monies was not taxable income. One of the defense team suggested that his co-counsel had presented such an instruction, but the court correctly noted that no one had done so. The court refused to recall the jury to "give them an instruction which would highlight something that nobody asked me to give them before."

The gist of the Government's argument is that Hollinger may not seek review of any of the challenged instructions because he did not properly preserve the error, if any. As to No. 43, it concedes that the federal prosecutors had agreed to rewrite it but points to a subsequent assertion by one of the defense counsel that his co-counsel had undertaken a redrafting as an indication of some ambiguity in the record. Although the transcript contains the assertion, we find in the record no ambiguity regarding the trial judge's directive to the Government counsel. The Government argues, first, that Hollinger did not state distinctly and specifically the grounds of his objection to No. 43. Second, citing United States v. Wright, 542 F.2d 975, 983-86 (7th Cir. 1976), cert. denied, 429 U.S. 1073, 97 S.Ct. 810, 50 L.Ed.2d 790 (1977), the Government argues that specific objections must be voiced after the charge to the jury. Thirdly, as a corollary to its timeliness contention, the Government contends that "defense counsel's objection cannot be bolstered by his attempt to incorporate by reference the instructions conference discussions. . . ." ⁷

We shall approach the Government's three essential arguments in reverse order. First, as to the incorporation by reference, the trial judge may have misled defense counsel. After the Government's rebuttal argument, we find this colloquy:

MISS LAVIN (Defense counsel): Your Honor, may the record just show that our discussions in chambers

THE COURT: Any objections that were made

MISS LAVIN: As provided by Rule 30?

THE COURT: Yes. Any objection made

MISS LAVIN: That the discussion in chambers will satisfy the Rule 30.

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