U.S. v. Zettl, 86-5525
| Decision Date | 17 December 1987 |
| Docket Number | No. 86-5525,86-5525 |
| Citation | 835 F.2d 1059 |
| Parties | UNITED STATES of America, Appellant, v. Bernie E. ZETTL, Robert R. Carter, and Walter R. Edgington, Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
John F. De Pue, Dept. of Justice (William F. Pendergast; Carlin D. Stanley, Dept. of Justice; David H. Hopkins, Asst. U.S. Atty., Henry E. Hudson, U.S. Atty., on brief), for appellant.
Barry S. Simon (Brendan V. Sullivan, Jr., Paul Mogin, Jeffrey B. Kindler, Williams & Connolly, Richard A. Hibey, Anderson, Hibey, Nauheim & Blair, Marvin J. Garbis, Ronald B. Rubin, Melnicove, Kaufman, Weiner, Smouse & Garbis, on brief), for appellees.
Before WIDENER, PHILLIPS, and ERVIN, Circuit Judges.
The United States appeals a pretrial order by the United States District Court for the Eastern District of Virginia authorizing the defendants Zettl, Edgington and Carter to disclose certain classified information during their criminal trial for conspiracy, conversion and espionage. The government is authorized under 18 U.S.C.App. IV Sec. 7 to take this interlocutory appeal from the adverse ruling by the district court. We affirm the order of the district court with respect to relevancy and remand for further proceedings under the Classified Information Procedures Act, 18 U.S.C.App. IV Sec. 1, et seq, (CIPA) and United States v. Smith, 780 F.2d 1102 (4th Cir.1985).
The defendants Bernie E. Zettl, Robert R. Carter and Walter R. Edgington were indicted in a multi-count indictment for conspiracy, conversion and espionage. Zettl is a paid consultant for GTE Government Systems Corporation. Carter is a former marketing manager for GTE's Western Division at Mountain View, California, and Edgington is GTE's Vice President for marketing in Rosslyn, Virginia. All three were indicted of conspiracy to convert classified Department of Defense (DoD) documents, particularly the 1984 Navy Program Element Descriptions (PEDs) 1 to their own use and to defraud the United States of the right to have its procurement process free from unauthorized conversion, in violation of 18 U.S.C. Sec. 371. Zettl was charged with converting to his own use and the use of another without authority a United States document, the 1984 Navy PEDs, in violation of 18 U.S.C. Sec. 641. Edgington was charged with receiving, concealing and retaining the 1984 Navy PEDs with the intent to convert them to his own use and gain, in violation of 18 U.S.C. Secs. 641 and 2. Zettl and Edgington were also charged with violations of the Espionage Act, 18 U.S.C. Sec. 793(e), as the result of Zettl's delivering the 1984 Navy PEDs to a person not authorized to receive them and Edgington's unauthorized acceptance and retention of that document. 2 Pursuant to Sec. 10 of CIPA, 18 U.S.C.App. IV Sec. 10, 3 the United States advised the defendants that it would rely upon seven program elements contained in the 1984 Navy PEDs to establish the national defense or classified information element of the espionage charge. 4
It is the government's theory of prosecution that between 1978 and 1983 Carter and Edgington contracted on GTE's behalf with Zettl for the unauthorized procurement of proprietary and classified Department of Defense (DoD) documents. 5 Zettl would transmit the documents to GTE by secretive and unauthorized means. The documents were primarily budgetary information that would then be disseminated to some employees within GTE to be used in preparing bids and contracts to be submitted to the government. Through possession of these documents, GTE had access to DoD information about the kinds of electronic technology the government would be seeking through government contracts and the amount of money DoD would seek from Congress to carry on these various projects. GTE would thus have a competitive advantage in the bidding process for these defense department contracts because of its access to internal government budgetary figures.
Among the documents Zettl provided to GTE were the 1984 Navy PEDs, the final supporting document for the budget proposal submitted to Congress. The PEDs had been classified SECRET by the government, and the government claims that only portions of the book were available through proper procedures to those in the defense community possessing the appropriate government security clearance upon demonstration of a need to know the information. 6 It is the government's theory that Edgington 7 did not seek to obtain portions of the PEDs through proper government channels but instead received the entire 1984 PEDs through unauthorized means from Zettl. While all the defendants had the appropriate government security clearance, 8 none had the need to know 9 the contents of the entire PEDs.
The defense counters that all of the classified information upon which the indictment was based was readily available to cleared individuals at GTE through the appropriate government channels. The government has taken no steps to withhold this classified information from cleared persons in the defense community. The defendants already had the classified information plus much more specific information on the same subjects because GTE was actively involved in research and development in many of the programs described in the classified information set out in the indictment. GTE is a manufacturer of electronic warfare equipment and, through that role, it receives a great deal of classified information concerning the Navy's tactical warfare plans. Because the defendants were entitled to receive this classified information through formal government sources, it cannot be illegal for them to have received the same information from Zettl. Because the classified information was so readily available to the defense community generally, GTE could not have obtained an unfair competitive advantage by obtaining the information from Zettl.
As we have noted, following return of the indictment, the government notified the defendants that it planned to limit its proof on the espionage counts to seven program elements from the 1984 PEDs. The defense, pursuant to the requirements of CIPA, notified the government of its intention to introduce classified information into evidence as part of its defense. 10 18 U.S.C App. IV Sec. 5. The district court then held a series of closed hearings to consider the use, relevance or admissibility of the classified information the defense sought to introduce. 11 18 U.S.C.App. IV Sec. 6(a). At these hearings, the United States objected to the introduction of all the classified information proffered by the defense except the 1984 Navy PEDs which the government announced it planned to introduce in their entirety. The 1984 Navy PEDs represent a substantial amount of classified information which the government planned to introduce at trial. It contains 1220 pages of information, approximately 300 of which are classified. Acting upon the assumption that such a large amount of classified information would be introduced by the government, the district court began considering the relevance of the hundreds of classified documents identified by the defense. For several days, the district court considered the relevance of defendants' identified classified documents, ruling some 192, or parts thereof, relevant at trial. The exact number may vary due to changes in classification, withdrawal by defendants, duplications, etc.
Throughout the Sec. 6(a) proceedings, the government took the position that it was improper for the court to consider at that time any applicable common law privileges that the government might wish to assert. Misconstruing this court's opinion in United States v. Smith, 780 F.2d 1102 (4th Cir.1985), the United States argued that the court's only role at the Sec. 6(a) hearing was to rule upon the relevancy of the classified information. Because of the government's failure to assert any privilege at the Sec. 6(a) hearing, the district court viewed the defense evidence solely from a relevancy standpoint, and, if relevant, held the evidence to be tentatively admissible. 12
Following the district court's holdings that the classified information was admissible, the United States moved under Sec. 6(c) of CIPA 13 that, in lieu of disclosure of the classified information, the court order the substitution of a statement admitting relevant facts that the classified information would tend to prove. See 18 U.S.C.App. IV Sec. 6(c)(1)(A). The government submitted three proposed substitutions to the court, and the defense submitted one. After hearings on these proposals, the district court rejected all of the government's proposals on the ground that they failed to admit facts that the defense evidence would tend to prove. The defense proposal would have stipulated the government out of court for most practical purposes. The government adhered to its position that the Smith balancing test should be applied at the 6(c) substitution hearings instead of at the 6(a) relevancy and admissibility hearing.
At the 6(c) substitution hearing, the district court also ruled upon the government's request for what the court called the silent witness rule to be used at trial for the handling of classified documents. Under such a rule, the witness would not disclose the information from the classified document in open court. Instead, the witness would have a copy of the classified document before him. The court, counsel and the jury would also have copies of the classified document. The witness would refer to specific places in the document in response to questioning. The jury would then refer to the particular part of the document as the witness answered. By this method, the classified information would not be made public at trial but the defense would be able to present that classified information to the jury. The defense indicated that it probably would not object to handling the classified documents under the...
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