U.S. v. McCrane

• Decision Date: 18 December 1975
• Docket Number: No. 75--1643,75--1643
• Parties: 76-1 USTC P 9147 UNITED STATES of America, Appellee, v. Joseph M. McCRANE, Jr., Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 906

527 F.2d 906

76-1 USTC P 9147

UNITED STATES of America, Appellee, v. Joseph M. McCRANE, Jr., Appellant.

No. 75--1643.

United States Court of Appeals, Third Circuit.

Argued Oct. 31, 1975.

Decided Dec. 18, 1975.

Edwin P. Rome, Thomas A. Bergstrom, Jerome R. Richter, Blank, Rome, Klaus & Comisky, Philadelphia, Pa., for appellant; J. Robert Lunney, Lunney & Crocco, New York City, of counsel.

John J. Barry, Bruce I. Goldstein, Mary-Anne T. Desmond, Asst. U.S. Attys., Jonathan L. Goldstein, U.S. Atty., Newark, N.J., for appellee.

Before GIBBONS, Circuit Judge, MARKEY, ^* Chief Judge of Court of Customs and Patent Appeals and WEIS, Circuit Judge.

OPINION OF THE COURT

WEIS, Circuit Judge.

Letters written by the United States Attorney to prospective customers of a key government witness constituted Brady material which should have been disclosed to the defendant in this criminal case. The failure of the prosecution to do so requires a new trial on the affected counts. Convictions will be affirmed on other charges of aiding the preparation of false income tax returns by deducting political contributions as business expenses.

The defendant was convicted on four counts of violation of 26 U.S.C. § 7206(2), which in general proscribes aiding or advising preparation of fraudulent income tax returns. ¹ At the conclusion of the government's case, the court dismissed a conspiracy charge and six substantive counts.

At the trial, there was testimony that the defendant solicited political contributions in the course of his duties as finance chairman for a gubernatorial candidate. Fictitious invoices for advertising services were issued in some instances to disguise the payments as business expenses which were then used as deductions on the contributor's income tax returns. This arrangement was effected through the cooperation of Writers Associates, a small public relations firm which the defendant had engaged to assist in his fund raising efforts. In addition to its customary advertising services, Writers agreed to receive campaign donations and, on some occasions, bill contributors for work which had not been performed.

Count III of the indictment was directed at a $2,000.00 contribution which Hialeah Race Course, Inc. made after receipt of Writers' fictitious bills for advertising. Hialeah later deducted the amount on its 1969 Federal Income Tax return as a business expense.

Count IV charged that Trap Rock Industries, Inc. had given a contribution of $15,000.00 to the campaign after Writers Associates had sent invoices for advertising services not rendered. A witness testified that, in soliciting the funds, the defendant had offered to supply fictitious bills from a public relations firm so that Trap Rock could deduct the contributions as a business expense.

Counts X and XI were based on payments made by Bellante, Clauss, Miller & Nolan, Inc. on separate occasions. Lawrence Bellante, president of the company, testified that in June, 1969 the defendant asked for a campaign contribution. In the course of the conversation, McCrane said that the payment should be made to Bofinger-Kaplan Advertising, Inc. in order to secure a tax deduction. Bellante made a payment of $3,500.00 to Bofinger-Kaplan and deducted part from the corporate income tax. A similar arrangement governed a $2,500.00 payment to Writers Associates. ²

The defendant raises a number of diverse issues on appeal and we first address the most serious one, the withholding of Brady material.

E. Lawrence Bellante was a key government witness against the defendant. Without his testimony there could have been no conviction on Counts X and XI. The guilty verdicts on these two counts, of necessity, demonstrated the jury's acceptance of his credibility.

The trial concluded on December 11, 1974. Four days later, an article appeared in the New Brunswick Home News describing the manner in which Bellante had secured a contract to participate in the construction of a new sports stadium in New Jersey. Reporting on an interview with Bellante, the article said:

'Among those who have helped him, he said, is U.S. Atty. Jonathan Goldstein, who has written in his behalf.'

The defense immediately brought the matter to the attention of the trial court which then conducted further inquiry. It was discovered that the U.S. Attorney's office had sent a number of letters describing Bellante's conduct in this case to various public and private organizations in New Jersey. The court then ordered production of the letters, eight in all. Six had been sent in the summer and fall of 1973, one in January of 1974, and the last one on January 31, 1975 (some six weeks after the trial concluded). ³ The letters, some of which were written at the request of Bellante's attorneys and others at the request of the addressee, are substantially identical. The U.S. Attorney's office wrote that Bellante had been granted immunity and had cooperated with the grand jury. Included was the following paragraph:

'This office brings these facts to your attention for your consideration as to whether Bellante, Clauss, Miller & Nolan, Inc., should be barred from further bidding on state work. On previous occasions we have expressed our concern that individuals that cooperate with the United States Grand Jury pursuant to a grant of immunity should not be penalized for telling the truth. It is in this context that I bring Mr. Bellante's cooperation to your attention for your consideration in reaching a final determination of the matter before you. In the final analysis, this determination must be made by your office and we do not in any way intend to interfere with your discretion in this matter.' ⁴

In the trial court's view, the letters were no more than factual recitations of Bellante's status and the government had been under no obligation to disclose the correspondence. ⁵

The record of the proceedings before trial shows that, in January of 1974, the defendant moved for discovery of inter alia:

'(A)ll material known to the government . . . which is exculpatory in nature or favorable to the defendant, or may lead to the discovery of exculpatory material or material which may be used to impeach prosecution witnesses . . ..'

In reply, the government acknowledged its 'continuing obligations' under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), to disclose any material that would exculpate the defendant or negate his guilt: 'However, the Government does not know of any exculpatory material.' At a hearing in April of 1974, the presiding judge, in ruling on discovery of Brady material, addressed the government attorney:

'Let me put it this way to you, . . . (i)f there is anything of a questionable nature, you should put it aside and let me review it in camera, and I'll decide.'

Under Brady v. Maryland, supra, the suppression of material evidence by the government requires that a new trial be ordered regardless of good or bad faith on the part of the prosecution. Giglio v. United States,405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972), makes it clear that, when the reliability of a given witness is critical to a determination of guilt or innocence, non-disclosure of evidence affecting credibility falls within Brady's rule. See also Napue v. Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1959); ABA Standards, Discovery and Procedure Before Trial § 2.1 (1970); ABA Standards, the Prosecution Function and the Defense Function § 3.11 (1971).

A promise of preferential treatment given to a witness by the government is admissible for impeachment purposes. United States v. Harris,498 F.2d 1164, 1169 (3d Cir. 1974); United States v. Newman, 490 F.2d 139, 146 (3d Cir. 1974).

However, not all impeachment matter must be disclosed; the obligation extends only to that which is material. Cases in this court have framed the test in terms of that which is reasonably likely to have changed the jury's judgment. United States v. Harris, supra; United States ex rel. Dale v. Williams, 459 F.2d 763 (3d Cir. 1972). ⁶ Consideration must be given to the witness' testimony, that is, whether it is merely corroborative, United States ex rel. Dale v. Williams, supra at 765, or essential, Giglio v. United States, 405 U.S. at 154--155, 92 S.Ct. 763.

Accordingly, the absence of the impeachment matter is material if the information which the government withholds tends to impair seriously the reliability of the only witness whose testimony carries the case to the jury. ⁷ In such circumstances, the failure to disclose goes to a matter reasonably likely to affect the judgment of the jury. Giglio v. United States, supra.

The district court reasoned that the government's failure to disclose did not deny the defendant's right to a fair trial because the letters were not 'favorable' within the meaning of Brady. The letters were characterized as factual recitations which contained no evidence of any understanding between Bellante and the United States Attorney's office or expectation of favors in exchange for cooperation. We agree that this is a reasonable interpretation of the letters, and one which the jurors might have accepted. However, we cannot exclude the other inference, just as reasonable, that at least some of the jurors might have felt that the mere act of writing the letters was preferential treatment by the U.S. Attorney.

Although the letters were couched in neutral tones, cross-examination might have revealed whether they were, in fact, helpful to Bellante in securing or retaining profitable contracts for his firm. Presumably, there had been some discussion between the United States Attorney's office and Bellante or his attorneys before the letters were sent. The substance of those conversations might be important in evaluating Bellante's reliability as a witness.

The impact of impeachment evidence is usually affected by the atmosphere created by the direct examination. It is helpful to...