United States v. Barber, Crim. A. No. 79-20038.

• Decision Date: 22 August 1979
• Docket Number: Crim. A. No. 79-20038.
• Citation: 476 F. Supp. 182
• Court: U.S. District Court — Southern District of West Virginia
• Parties: UNITED STATES of America v. J. Richard BARBER.

476 F. Supp. 182

UNITED STATES of America v. J. Richard BARBER.

Crim. A. No. 79-20038.

United States District Court, S. D. West Virginia, Charleston Division.

August 22, 1979.

COPYRIGHT MATERIAL OMITTED

Robert B. King, U. S. Atty., Wayne A. Rich, Jr., Rebecca A. Betts, Asst. U. S. Attys., Charleston, W. Va., for plaintiff.

Rudolph L. DiTrapano, Timothy N. Barber, Charleston, W. Va., for defendant.

MEMORANDUM ORDER

COPENHAVER, District Judge.

This criminal action is before the court on the defendant's motion to dismiss the first count of the within indictment. Count One charges the defendant with one violation of Title 18, United States Code, Section 1962(c). Section 1962(c) is contained in Title IX of the Organized Crime Control Act of 1970 (hereinafter, the "Act"). Title IX is entitled "Racketeer Influenced and Corrupt Organizations" (hereinafter, "RICO").

Section 1962(c) states:

(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.

Defendant was at all material times Alcohol Beverage Control Commissioner for the State of West Virginia (hereinafter, "ABCC"). The ABCC is authorized by state law to supervise and control the wholesale and retail distribution of alcoholic beverages in West Virginia. W.Va.Code § 60-3-1 (1977). Count One alleges that the operation of the ABCC affects interstate commerce, and that the defendant, as commissioner, conducted the affairs of the ABCC through a pattern of racketeering activity, as is more fully described in the indictment.

Defendant contends that a state agency or other governmental body does not constitute an enterprise as required by section 1962(c).¹ Defendant relies primarily on United States v. Mandel, 415 F.Supp. 997 (D.Md.1976), aff'd in part, remanded in part, 591 F.2d 1347 (4th Cir. 1979), district court aff'd on rehearing, 602 F.2d 653 (July 20, 1979) (en banc), as well as the legislative history of RICO and the Act.

The court necessarily begins with the language of the statute. The term enterprise is expressly defined to include "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4). The statutory definition thus stretches from the specific to the broad, general term "other legal entity," to the even greater informality of persons merely associated in fact.

The ABCC is a legal entity, and consequently comes within the literal meaning of enterprise. Established by section 60-2-1 of the West Virginia Code, the ABCC has authority to enter into contracts for the leasing of buildings and the purchase of equipment, to employ personnel, and to otherwise carry out the duties attendant to the purchase, sale, and distribution of alcoholic beverages. See W.Va.Code §§ 60-2-11, 60-2-12 (1977).

It is arguable that the more specific language "any individual, partnership, corporation, association" in section 1961(4) limits the meaning of the subsequent term "other legal entity" through application of the doctrine of ejusdem generis. Whether or not it is appropriate to utilize ejusdem generis here to circumscribe the otherwise broad definition in the statute requires an analysis of the congressional purpose.

The Statement of Findings and Purpose in the Organized Crime Control Act summarizes the breadth of the problem of organized crime, and the intense congressional concern to combat it:

The Congress finds that (1) organized crime in the United States is a highly sophisticated, diversified, and widespread activity that annually drains billions of dollars from America's economy by unlawful conduct and the illegal use of force, fraud, and corruption; (2) organized crime derives a major portion of its power through money obtained from such illegal endeavors as syndicated gambling, loan sharking, the theft and fencing of property, the importation and distribution of narcotics and other dangerous drugs, and other forms of social exploitation; (3) this money and power are increasingly used to infiltrate and corrupt legitimate business and labor unions and to subvert and corrupt our democratic processes; (4) organized crime activities in the United States weaken the stability of the Nation's economic system, harm innocent investors and competing organizations, interfere with free competition, seriously burden interstate and foreign commerce, threaten the domestic security, and undermine the general welfare of the Nation and its citizens; and (5) organized crime continues to grow because of defects in the evidence-gathering process of the law inhibiting the development of the legally admissible evidence necessary to bring criminal and other sanctions or remedies to bear on the unlawful activities of those engaged in organized crime and because the sanctions and remedies available to the Government are unnecessarily limited in scope and impact.

It is the purpose of this Act to seek the eradication of organized crime in the United States by strengthening the legal tools in the evidence-gathering process, by establishing new penal prohibitions, and by providing enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organized crime.

Pub.L. No. 91-452, § 1, 84 Stat. 922.

Recurrent themes running throughout the legislative history include the diversity of organized crime, its penetration into virtually every phase of the nation's economic and political life, the infiltration of, and dependency upon, political institutions by persons engaged in organized crime, and the ineffectiveness of past enforcement efforts. Senator Hruska of Nebraska, a member of the Subcommittee on Criminal Laws and Procedures which drafted and introduced the bill, made the following comments during the initial Senate debates:

In recent years, organized crime has become increasingly diversified and has become entrenched in legitimate businesses and in labor unions where it employs terrorism, extortion, tax evasion, bankruptcy fraud and manipulation, and other measures to drive out lawful owners and officials. Also, wherever organized crime exists, it corrupts public officials and wields extensive political influence which insulate its activities from governmental interferences.

Corrupt officials and bribed law enforcement officers operate as "a silent conspiracy" in support of organized crime. The syndicate could not continue to operate without corrupt judges and prosecutors, or without the assistance of a handful of bribed police.

116 Cong.Rec. 601 (1970). Senator Byrd of West Virginia echoed the concern expressed by his colleague:

A study for the President's Crime Commission, still secret, reportedly details the infiltration of organized crime into local, State and Federal Government, including, it is said, the control of several Federal district judges.

These recent revelations are simply a further indication that we are suffering from a bad case of moral rot and that we are allowing our cherished democratic institutions to crumble before our eyes. I hope the revelations will serve to shock some of our more complacent citizens into an awareness of the magnitude of the problem.

Id. at 606. The House debates contain similar comments:

The danger of organized crime arises because the vast profits acquired from the sale of illicit goods and services are being invested in licit enterprises, in both the economic sphere and the political sphere. It is when criminal syndicates start to undermine basic economic and political traditions and institutions that the real trouble begins. And the real trouble has begun in the United States.

Id. at 35199 (remarks of Rep. St. Germain).

Congress responded to this unanimous sense of urgency by enacting a comprehensive scheme incorporated in twelve separate titles. The first ten titles were capsulized by Senator McClellan, chairman of the Subcommittee on Criminal Laws and Procedures, during his presentation of the bill to the Senate:

Mr. President, the product of this process is a bill which has been carefully drafted to cure a number of debilitating defects in the evidence-gathering process in organized crime investigations Titles I-VI, to circumscribe defense abuse of pretrial proceedings Title VII, to broaden Federal jurisdiction over syndicated gambling and its corruption where interstate commerce is affected Title VIII, to attack and to mitigate the effects of racketeer infiltration of legitimate organizations affecting interstate commerce Title IX, and to make possible extended terms of incarceration for the dangerous offenders who prey on our society Title X.

Id. at 585.²

The legislative history thus illustrates the broad congressional perspective and sweeping determinism from which Title IX originated.

It is equally clear that at the time the Act was being considered by each house of Congress, the legislative target was the organized criminal syndicate. The Act does not, however, define "organized crime." Moreover, the following titles in the Act are applicable to any criminal proceeding without limitation or reference to traditional notions of organized crime: Title II, providing a procedure whereby the government may request court-ordered use immunity for a witness, 18 U.S.C. § 6001, et seq.; Title III, permitting the court to incarcerate a witness who refuses to comply with a subpoena or other court order, 28 U.S.C. § 1826; Title IV, prohibiting false declarations before a grand jury or court, 18 U.S.C. § 1623; Title VII, restricting hearing and disclosure requirements in instances where a defendant alleges unlawful electronic surveillance, 18 U.S.C. § 3504; Title VIII, prohibiting illegal gambling, 18...