U.S. v. LaRouche
| Decision Date | 16 February 1990 |
| Docket Number | No. 89-5518,89-5518 |
| Citation | 896 F.2d 815 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Lyndon H. LAROUCHE, Jr.; William Wertz; Edward Spannaus; Michael Billington; Dennis Small; Paul Greenberg; Joyce Rubinstein, Defendants-Appellants, William P. Robinson, Jr. et al., Amici Curiae. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Ramsey Clark (Ramsey Clark & Lawrence Shilling, on brief), Odin Phillips Anderson (Robert L. Rossi, Anderson & Associates, P.C.; R. Kenly Webster, Thomas C. Hill, Gadi Weinrich, Shaw, Pittman, Potts & Trowbridge, Brian P. Gettings, Cohen, Gettings, Alper & Dunham, James C. Clark, Land, Clark, Carroll & Mendelson, Edwin Williams, Kellogg, Williams & Lyons, on brief) for defendants-appellants.
Kent S. Robinson, Asst. U.S. Atty. (Henry Hudson, U.S. Atty., John J.E. Markham, III; Mark D. Rasch, Sp. Asst. U.S. Atty., on brief) for plaintiff-appellee.
William P. Robinson, Jr., Robinson, Zaleski & Lindsey, Maitre Jacques Stul, Edward de Grazia, Lennart Hane, James R. Mann, Edwin Vieira, Jr., Charles E. Rice, Jay Alan Sekulow, Thomas P. Monaghan, Christine Kasun, Amshoff, Amshoff & Monaghan, Maitre Jean-Marc Varaut, James R. Mann, Professor Dr. Albert Bleckmann, Professor Dr. Hans Richard Klecatsky, Professor Dr. Wolfgang Waldstein, R. David Pembroke, on brief, for amici curiae.
Before HALL and MURNAGHAN, Circuit Judges, and BUTZNER, Senior Circuit Judge.
On Friday, October 14, 1988, a federal grand jury in the Eastern District of Virginia, Alexandria Division, handed down a thirteen-count indictment against Lyndon LaRouche, Jr., Edward Spannaus, William Wertz, Michael Billington, Dennis Small, Paul Greenberg, and Joyce Rubinstein. Count One was Conspiracy to Commit Mail Fraud, on which all of the defendants were charged; Counts Two through Twelve were various counts of mail fraud charged to various defendants; and Count Thirteen was Conspiracy to Defraud the Internal Revenue Service, on which only LaRouche was charged. On December 16, 1988, a jury in the United States District Court for the Eastern District of Virginia found the seven defendants guilty on all of the counts with which they had been charged.
The convictions and sentences are before us on appeal. The defendants claim that the district court did not afford them a fair trial. Specifically, they contend that: (1) the district court erred in denying their motion for a continuance of the trial date; (2) the district court erroneously denied their discovery request for exculpatory material; (3) the district court made numerous evidentiary rulings, in limine and at trial, that unconstitutionally restricted their ability to defend against the charges; (4) the trial judge failed to conduct a voir dire sufficient to impanel an unbiased jury and improperly failed to excuse several jurors for cause; (5) the mail fraud counts were improperly joined with the tax conspiracy count; (6) the sentence imposed on LaRouche was excessive; (7) the district court erroneously instructed the jury on the tax count; and (8) the district court erred in allowing the introduction of illegally seized evidence. The defendants also maintain that the evidence introduced at trial was insufficient to sustain the convictions of LaRouche and Spannaus on all counts and of some of the defendants on several counts. After carefully reviewing the case, we find no basis for disturbing the defendants' convictions and the sentences imposed upon them.
The government sought to prove that the seven defendants, acting through the National Caucus of Labor Committees ("NCLC") (also known as "the LaRouche Organization"), fraudulently solicited loans from contributors. Specifically, the government alleged that the defendants promised to pay back borrowed funds at specific times and at stated interest rates when they knew such loans would not be so repaid, and that they promised the lenders that the funds would be used for specific purposes even though the funds were not to be so used. Furthermore, the indictment charged that LaRouche conspired to defraud the Internal Revenue Service.
LaRouche, a candidate for the Democratic Presidential nomination in 1980 and 1984 and an independent candidate for President in 1984, headed the NCLC. The NCLC supported various political candidates and initiatives and published numerous books and periodicals. The NCLC had offices across the country and carried out many of its activities through commercial corporations and political committees.
LaRouche controlled the NCLC, including its fundraising operations and its finances. Daily operations of the NCLC were governed by the National Executive Council ("NEC"), which consisted of 13 LaRouche associates.
William Wertz, a member of the NEC, was in charge of fundraising for the NCLC. Edward Spannaus, also a member of the NEC, helped the NCLC on legal matters. Michael Billington and Dennis Small were telephone fundraisers for the national office of the NCLC. Paul Greenberg was in charge of fundraising for the Chicago office. Joyce Rubinstein was a fundraiser in the New York office.
In 1983, LaRouche, who was becoming increasingly dissatisfied with the fundraising performance of some of NCLC's offices, promoted William Wertz, who had headed the successful West Coast fundraising offices, to the NEC and placed him in charge of national fundraising. LaRouche's dissatisfaction also precipitated aggressive fundraising tactics.
One former LaRouche associate testified that LaRouche, at an NEC meeting, expressed his dissatisfaction with fundraising and his belief that members of the organization were not "getting tough enough with the general population." Allegedly, LaRouche characterized adequate fundraising as essential to get him to the White House and without his presence in the White House, there was "no hope for mankind." Another LaRouche associate testified that LaRouche exhorted to NCLC members that "the human race was on the verge of destruction or self-destruction as a result of its imbecility, its sheeplike quality, and that it lacked itself the moral fitness to survive." Because he needed funds to save humanity, LaRouche was said to have told NCLC members that "any means short of thievery or thuggery [was justified] to raise that money."
Pugnacity apparently became the theme of the LaRouche Organization's fundraising tactics. A former LaRouche fundraiser testified that when he started on a phone team, he was told as follows:
You have to have only one thing on your mind. That is getting the money. No matter what the person you are talking to says, get the money. If you are talking to a little old lady and she says she is going to lose her house, ignore it. Get the money. If you are talking to an unemployed worker who says he has got to feed ... a dozen children, forget it. Get the money. Most of these people are immoral anyway. This is the most moral thing they have ever done is to give you money.
Fundraisers began working very long hours and complained of "being driven into the ground."
LaRouche and Wertz set high fundraising goals for the organization, for each office, and for each individual fundraiser. LaRouche was said to have blamed the fundraisers' inadequacy on "sexual impotence." Wertz and regional fundraising supervisors reacted angrily to fundraising shortfalls and the individual fundraisers, when failing to meet established quotas, became hysterical, distraught, and depressed.
Fundraisers began to take loans, as opposed to donations, from contributors in ever increasing amounts. In 1984 and 1985, the amount that the LaRouche organization borrowed from contributors increased dramatically; more than $25 million was borrowed from contributors in those two years alone.
It was the way that those borrowed funds were obtained that concerned the government prosecutors. The government alleged that LaRouche communicated to his organization a "forgive and forget" policy, whereby fundraisers would initially try to persuade individual lenders to convert their loans into contributions. Lenders who still demanded payment would not be repaid. One former LaRouche fundraiser testified that Wertz characterized lenders, who asked for the return of their money, as immoral. According to the government, the nonpayment policy did have two exceptions: (1) if alienating the lender might result in significant adverse political consequences; or (2) if the lender was going to file suit.
The government sought to prove that potential lenders heard quite a different story from the organization's fundraisers: they were told that their money would be safer with the LaRouche Organization than with a bank and that they would be repaid on specific terms, at specific rates of interest; the lenders were never told of the organization's financial difficulties; and even when some of the lenders became disgruntled, they were assured of repayment. Many lenders lost significant amounts of money. Furthermore, the government introduced evidence at trial to prove that the defendants knew of the falsity of the repayment and interest representations.
In addition, the government charged LaRouche with conspiring to defraud the Internal Revenue Service ("IRS"). It sought to prove that the LaRouche Organization compensated LaRouche by maintaining his lifestyle, including the costs of his housing, food, furniture, and clothing, rather than by paying him a salary. In addition, the government alleged, a variety of affirmative steps were taken by LaRouche and associates to conceal some of the payments and to characterize others as gifts. Among other things, LaRouche did not file income tax returns for the calendar years 1980, 1981, and 1982, the period during which the alleged...
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