U.S. v. Waldemer, 94-2338

• Decision Date: 12 April 1995
• Docket Number: No. 94-2338,94-2338
• Citation: 50 F.3d 1379
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Mark WALDEMER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1379

50 F.3d 1379

UNITED STATES of America, Plaintiff-Appellee, v. Mark WALDEMER, Defendant-Appellant.

No. 94-2338.

United States Court of Appeals Seventh Circuit.

Argued Nov. 7, 1994.

Decided March 20, 1995.

Rehearing and Suggestion for Rehearing In Banc Denied April

12, 1995.

Frank J. Marine, Dept. of Justice, Civil Div., Appellate Section, Stephen Kelly (argued), Dept. of Justice, Criminal Division/OCRS, Bond Edward Rhue, U.S. Dept. of Justice, Organized Crime and Racketeering Section, Washington, DC, for U.S.

James J. Gomric, Belleville, IL, John P. Long (argued), Troy, IL, Burton H. Shostak, Moline & Shostak, Clayton, MO, for Mark Waldemer.

Before BAUER and KANNE, Circuit Judges, and SKINNER, District Judge. ^*

KANNE, Circuit Judge.

Mark Waldemer was both an attorney and an elected legislative representative for the Brotherhood of Locomotive Engineers. Waldemer voluntarily testified before a federal grand jury investigating whether Waldemer's old law firm, Kassly, Bone, Becker, Dix, Tillery, & Reagan ("Kassly Law Firm"), or attorney Stephen Tillery improperly paid Waldemer's union campaign and business expenses. Waldemer denied under oath that either had paid the expenses. Federal prosecutors subsequently found evidence indicating otherwise.

The government pursued Waldemer for lying to the grand jury about the payments the Kassly Law Firm made to him. A jury convicted Waldemer of making a false declaration to a federal grand jury. Waldemer appeals his conviction, alleging improper prosecutorial argument to the jury, improper jury instructions, and insufficiency of the evidence. We also examine as a threshold matter whether Waldemer's statements to the grand jury were material to the grand jury's investigation.

I. Materiality of Waldemer's Statements

In order to convict a grand jury witness of perjury under 18 U.S.C. Sec. 1623, the government must not only prove that the witness's testimony was false, it must also prove that the false testimony was material to a legitimate inquiry of the grand jury. 18 U.S.C. Sec. 1623; United States v. Gulley, 992 F.2d 108, 112-13 (7th Cir.1993).

The focus of both parties in this appeal has been on the grand jury's investigation of possible improper payments from the Kassly Law Firm to Waldemer in violation of 29 U.S.C. Sec. 481. In fact, the government predicated its theory of Waldemer's motivation to lie on this statute. However, this is not a criminal statute. Section 841 states that it is improper for an employer to pay any union campaign or business expenses. However, it does not provide criminal sanctions for violating its prohibitions. Under no set of facts, therefore, could the grand jury have indicted Waldemer, or anyone else, for violating this act. Consequently, any perjury relating to an investigation of this statute alone would not meet the materiality requirement of 18 U.S.C. Sec. 1623.

The grand jury and trial transcripts, the indictment, and the government's brief, however, reveal the grand jury's broader scope. Former government prosecutor Lee Satterfield, who directed the grand jury investigation of Waldemer, told Waldemer when he testified before the grand jury that the grand jury was investigating him for mail fraud and Travel Act violations. Satterfield also testified at trial that the grand jury's scope included these statutes. The indictment also alleges that the grand jury had been investigating such possible crimes. And the government notes in footnote four of its brief that the grand jury's investigation included possible mail fraud and Travel Act crimes.

The government's theory for investigating mail fraud based on union campaign and business expense reimbursements from the Kassly Law Firm to Waldemer rests on Waldemer's deprivation of the Union of its intangible right to loyal, faithful, and honest services. Waldemer accepted the payments, the theory runs, in exchange for his promoting the Kassly Law Firm among union rank and file and his referring union workers to the Kassly Law Firm or Stephen Tillery for personal injury legal work. Waldemer's service to the union was not honest presumably because he did not disclose to the union his acceptance of the Kassly Law Firm payments.

One problem with the government's theory, however, is that Waldemer accepted the last of the reimbursements before Congress recognized the intangible rights doctrine in November 1988. 18 U.S.C. Sec. 1346. Therefore, Waldemer ultimately could not have been guilty of mail fraud under the intangible rights theory. See United States v. Bush, 888 F.2d 1145, 1146 (7th Cir.1989) (holding that 18 U.S.C. Sec. 1346 could not apply retroactively in light of the Constitution's prohibitions of ex post facto laws). However, this does not mean that he could not have been guilty under any set of facts. Waldemer specifically told the grand jury that he never received any reimbursements from the Kassly Law Firm. Theoretically, he may have received payments after the 1988 amendment, but his lie may have stymied the grand jury's inquiry in this vein. Materiality only calls for the lie to be a potential impediment, not an actual impediment, of the grand jury's inquiry. Gulley, 992 F.2d at 113. Put another way, as long as Waldemer could have been indicted for mail fraud under some set of plausible facts, his lies regarding whether he received the Kassly Law Firm reimbursements (which might have established part of the fraud scheme as well as the use of the mail) are material.

The most solid basis for finding materiality, however, remains the government's investigation of Travel Act violations. The Travel Act requires the government to prove that the defendant travelled interstate with the intent to commit or facilitate one or more predicate crimes and thereafter to act overtly toward the commission or facilitation of the predicate crime. 18 U.S.C. Sec. 1952. Included in the range of predicate crimes is state law bribery. Whether the Kassly Law Firm paid Waldemer for his union business and campaign expenses is material to determining whether a bribery scheme existed. We need not inquire as to whether the government could have proven all elements of the Travel Act; it is sufficient that the grand jury investigated the possibility of such a violation and that Waldemer's testimony had some bearing on one of the elements of the Travel Act. Whether Waldemer received any payments at all from the Kassly Law Firm or Stephen Tillery, and if so, why, bears on whether a bribery scheme existed. Therefore, Waldemer's perjury was material.

II. Prosecutorial Argument to the Jury

A. Whether the Prosecutor's Inferences Were Reasonable

During the rebuttal portion of his closing argument, the Assistant U.S. Attorney, Stephen Kelly, stated three times to the jury that Waldemer had been subpoenaed for records related to the campaign expenses and that Waldemer had failed to produce them. Waldemer claims that, in mentioning these facts, Kelly improperly argued facts not in evidence and effectively accused Waldemer of obstructing justice, a crime with which he was not charged.

While prosecutors may not infuse their closing arguments with facts that the court has not admitted into evidence, they may argue reasonable inferences from the evidence that the jury has seen and heard. United States v. Martinez, 939 F.2d 412, 415 (7th Cir.1991). We will reverse Waldemer's conviction only if we find that the prosecutor's rhetoric invoked facts not in evidence and deprived Waldemer of a fair trial. Id.

The remarks in question went as follows:

MR. KELLY: You will have the opportunity to read in the ... grand jury testimony exactly how he understood, as the Court will instruct you, that he understood in his mind--this goes to the question of intent and motive for you--that receiving campaign expenses would be improper and you heard in this case that Mr. Waldemer was subpoenaed for these types of records back in July and he did not produce them. He produced a number of invoices--

MR. GOMRIC: Your Honor, we're going to object to that, Your Honor.

THE COURT: Overruled.

MR. KELLY: You heard evidence in this case that he was subpoenaed for these types of records and he did not produce them. He was interviewed and asked about these types of payments. There's no question when he was asked in his interview about these types of questions that he again denied them, denied ever receiving them, and again as you will read the grand jury transcript, he did it again under oath in front of the grand jury.

* * * * * *

MR. KELLY: Let me ask you, ladies and gentlemen, to recall what Mr. Satterfield said about the interview a month before he went in front of the grand jury and how he asked him a whole number of questions that lasted approximately more than an hour, less than two hours, and he reviewed all his questions, and also recall when Mr. Satterfield said before going in front of the grand jury he informed Mr. Waldemer that he was going to ask him many of the same questions that he had asked him in the earlier interview. There was no surprise.

He also asked him about union business expenses and union campaign expenses in that interview a month before. He subpoenaed the records five months before that. There was no surprise. He was given an opportunity to ask "what do you mean." He was given an opportunity to make sure that he had all the records. But did he produce them? No, ladies and gentlemen.

* * * * * *

The literal message of these remarks was that the government subpoenaed records that Waldemer didn't produce. Waldemer argues that the prosecutor also implicitly conveyed that Waldemer in fact possessed the documents and failed to produce them only because he wanted to conceal their existence. The government does not dispute this characterization of its argument, but it does dispute that arguing such an inference is improper.

Waldemer argues that the government's inference from the evidence was improper...