U.S. v. Sullivan, s. 79-1597

• Decision Date: 07 May 1980
• Docket Number: Nos. 79-1597,s. 79-1597
• Citation: 618 F.2d 1290
• Parties: 89 Lab.Cas. P 12,105, 5 Fed. R. Evid. Serv. 1230 UNITED STATES of America, Appellee, v. Priscilla Ann SULLIVAN, Appellant. UNITED STATES of America, Appellee, v. Dan E. SULLIVAN, Appellant. UNITED STATES of America, Appellee, v. Ralph D. HARRELL, Appellant. UNITED STATES of America, Appellee, v. Carl DUVALL, Appellant. to 79-1600.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1290

618 F.2d 1290

89 Lab.Cas. P 12,105, 5 Fed. R. Evid. Serv. 1230

UNITED STATES of America, Appellee, v. Priscilla Ann SULLIVAN, Appellant.

UNITED STATES of America, Appellee, v. Dan E. SULLIVAN, Appellant.

UNITED STATES of America, Appellee, v. Ralph D. HARRELL, Appellant.

UNITED STATES of America, Appellee, v. Carl DUVALL, Appellant.

Nos. 79-1597 to 79-1600.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 14, 1980.

Decided April 16, 1980.

Rehearing and Rehearing En Banc Denied May 7, 1980.

Robert G. Duncan, Duncan, Russell & Reardon, Gladstone, Mo. (argued), J. D. Williamson, and Robert E. Hart, Independence, Mo., on brief, for appellant.

Ronald S. Reed, Jr., U. S. Atty., Kansas City, Mo. (argued), Cynthia A. Clark, Asst. U. S. Atty., Kansas City, Mo., on brief, for appellee.

Before ROSS and HENLEY, Circuit Judges, and PORTER, District Judge. ^*

HENLEY, Circuit Judge.

In 1979 the defendants, Dan E. Sullivan, his wife, Priscilla Ann Sullivan, Ralph D. Harrell and Carl Duvall, were found guilty by a jury in the United States District Court for the Western District of Missouri (District Judge Russell G. Clark) of embezzlement of labor union funds and related offenses in violation of the criminal provisions of the Landrum-Griffin Labor-Management Reporting and Disclosure Procedure Act of 1959, 29 U.S.C. § 401 et seq., and of various provisions of Title 18, U.S.C.

The indictment contained twenty counts. Not all of the defendants were named as defendants in all of the counts. Each defendant was found guilty and sentenced on the counts in which he or she had been charged. Sentences were imposed, and all four defendants appealed. The appeals were consolidated. While the appeals were pending, the defendant Harrell died; his death mooted his appeal and abated the original prosecution as to him.

The labor union involved in the case is Hoisting and Portable Engineers, Local 101, International Union of Operating Engineers, AFL-CIO. "Operating engineers" are individuals who are engaged in the trade or craft of operating heavy excavating and hoisting machinery. They are employed primarily by contractors engaged in the construction industry.

Local 101 during 1977 and prior years was a large labor union having about 4,000 members and with jurisdiction over the western part of the State of Missouri and all of the State of Kansas. Specifically, its jurisdiction included the Kansas City, Missouri metropolitan area which embraces certain counties in western Missouri and eastern Kansas.

For convenience, we will refer to the local labor union involved in the case as "Local 101," or as the "local union," or simply as the "union." The International Union will be referred to as such.

For many years the defendant, Dan E. Sullivan, was the president and business manager of Local 101. As president Sullivan received no compensation, but he was well paid for his services as business manager. Prior to the commencement of the indictment period Sullivan married Priscilla Ann Chaney and gave her the job of office manager of the local union for which she was compensated.

During the period with which we are concerned, Local 101 had officers in addition to the president, including the financial secretary, Sam Long, and the union treasurer, Floyd Bledsoe. They were not only officers of the local union but also were employed, along with others, as business agents. As business agents they were paid for their services.

Sullivan had the authority to hire and fire employees of the local union, including business agents.

The criminal litigation which is involved here had its genesis in April, 1977 when Local 101 struck a number of construction firms in the Kansas City area and mounted pickets. The strike, while prolonged, did not involve all union members and did not affect all of the territory within the jurisdiction of Local 101.

For one reason or another the local union found it necessary to pay members for doing picket duty, and while some payments were made out of general union funds, most of them were made from a "Picket Carriers Relief Fund" that was financed by contributions from members of the union who were not on strike and by some very substantial contributions from the International Union.

As we understand it, the Relief Fund was separate and distinct from the general funds of the union, and checks drawn on the Relief Fund had to bear two signatures. Mrs. Sullivan seems to have had no access to that fund, and the case involves no misapplication of Relief Fund moneys.

The general funds of the union were deposited in two Kansas City banks, the Westport Bank and the Traders National Bank.

As stated, Floyd Bledsoe was for a time treasurer of Local 101. He served as treasurer during 1977 and up until he was removed from office and employment by Dan E. Sullivan in February, 1978. Mr. Bledsoe seems to have had some serious health problems and because of those problems and for other reasons he engaged in the negligent practice of signing in blank checks that, when completed, would be drawn on the local union's account with the Westport Bank. Mrs. Sullivan, referred to generally in the evidence as "Ann," had full access to those checks.

As office manager of Local 101 Mrs. Sullivan conducted business at both of the banks that have been mentioned. At the Westport Bank she dealt primarily with a teller, Jacquelyn Donahue, who later married Sam Long to whom we have referred. It may be noted that in years prior to 1977 both Sam Long and Floyd Bledsoe had been opposed to Dan Sullivan in the area of union politics but had not been successful. In the course of time both Long and Bledsoe made peace with Sullivan and were elected to union office and given union employment.

Local 101's strike began about the first of April, 1977. During a period between about April 26, 1977 and November 16, 1977 Mrs. Sullivan filled out in favor of the union "petty cash" checks that Bledsoe had signed in blank. She then forged Bledsoe's endorsement on the checks and negotiated them with Jacquelyn Donahue (as she then was) at the Westport Bank, received the proceeds of the checks in currency and departed with them. Later, Mrs. Sullivan changed the endorsements on the checks to the extent that she caused them to show that the signature of Bledsoe had been "By Ann Sullivan."

Those petty cash checks were written periodically about every week to two weeks and generally were in amounts of either $3,000.00 or $4,000.00. There was evidence that during the check writing period Mrs. Sullivan bought an expensive automobile and expensive furs, and that on one occasion she bought forty pairs of shoes.

The basic theory of the government in the case was that the proceeds of those checks were converted by Mr. and Mrs. Sullivan to their own use. The total amount of the checks was well in excess of $60,000.00. While some of the money was restored to the union, a Labor Department audit was to show a final shortage of nearly $50,000.00.

In late November or early December of 1977 certain union officers and employees, principally Long and Bledsoe, became concerned about the very large withdrawals of union funds for the alleged benefit of petty cash. Long, Bledsoe and others called on Sullivan for an accounting and also demanded the discharge of Mrs. Sullivan from union employment.

While Sullivan was conciliatory at first, he later became defiant. The difference between Sullivan and his adherents, and those who supported the Long-Bledsoe position led to violence at one or two union meetings. It also led to a request by the anti-Sullivan faction to the International Union to investigate local union affairs, and at some stage the Labor Department received information that the conduct of the affairs of Local 101 may have involved violations of the Landrum-Griffin Act.

In January, 1978 the Labor Department undertook an investigation of the affairs of Local 101 as authorized by 29 U.S.C. § 521, and in February, 1978 the International Union imposed a trusteeship on Local 101 which effectively removed Mr. and Mrs. Sullivan from control of local union affairs. Prior to that time, however, Mr. Sullivan had discharged Long, Bledsoe, and certain others from union employment.

The Labor Department investigation caused the Department to turn the matter over to the Department of Justice and the United States Attorney for the Western District of Missouri, and the indictment against the defendants was duly returned.

I. Statutory Provisions.

Before looking at the indictment, we will refer briefly to the federal statutes involved.

The statutes are the reporting, recordkeeping, and anti-embezzlement provisions of the Landrum-Griffin Act, supra, and certain provisions of the general Criminal Code of the United States, Title 18 U.S.C.

The Landrum-Griffin Act covers employers and labor unions the activities of which affect interstate or foreign commerce. 29 U.S.C. § 402(a), (e), (i) and (j). No claim is made that Local 101 was not subject to the provisions of the Act in 1977 and 1978.

The Act, 29 U.S.C. § 431 et seq., imposes certain recordkeeping requirements on labor unions and employers. A willful violation of those requirements is a serious misdemeanor punishable by a fine of not more than $10,000.00 or by imprisonment for not more than one year, or both. § 439(a). Somewhat more specifically, deliberate falsification of a record required to be kept is punishable by a fine of not more than $10,000.00 or imprisonment for not more than one year, or both. 29 U.S.C. § 439(c).

Embezzlement, to the embezzler's own use or to that of another, is a felony and is punishable by a fine or not more than $10,000.00 or by imprisonment for not more than five years, or both. 29 U.S.C. § 501(c).

29 U.S.C. § 521 authorizes the Secretary of Labor to conduct appropriate investigations in cases in which he has reason to believe that violations of the Act have taken place.

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