United States v. Nell

Decision Date07 April 1976
Docket NumberNo. 74-4094.,74-4094.
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Richard NELL, Defendant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

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P. D. Aiken, Ft. Lauderdale, Fla., for defendant-appellant.

Robert W. Rust, U.S. Atty., Miami, Fla., Lauren S. Kahn, Washington, D.C., for plaintiff-appellee.

Before GEWIN, GOLDBERG and DYER, Circuit Judges.

GOLDBERG, Circuit Judge:

Richard Nell, formerly president of the International Union of Operating Engineers (IUOE), Local 675, was convicted by a jury on five counts of embezzling union funds in violation of 29 U.S.C. § 501(c).1 Launching a broad-ranged attack on these convictions, he complains of a pretrial denial of severance, refusals to sustain challenges for cause during the voir dire of prospective jurors, evidentiary rulings, certain instructions to the jury, and the sufficiency of the evidence. Since we agree that the district court abused its discretion in denying two of Nell's challenges for cause during voir dire, we reverse and remand for a new trial.

During Nell's tenure as president of Local 675, a number of financial transactions took place that later became the subject of this criminal prosecution. The grand jury's indictment specified seven counts, all charging unlawful embezzlement and conversion of union funds; Nell was ultimately convicted on five counts.2 Count I charged conversion of $6,000 for a European vacation for himself and others; Count II involved conversion of approximately $9,000 for personal legal fees; Count IV alleged that Nell had converted $3,650 for a 1970 Cadillac for his personal use; Count VI charged embezzlement of automobile and travel expense money; and Count VII charged similar embezzlement of $400 for false and fraudulent gasoline receipt claims.

The jury found Nell guilty on all five counts. He was sentenced to three years' incarceration on Counts I, II, and IV, to run concurrently. On counts VI and VII he received five year probated sentences, also concurrent with the first three counts. Because Nell has included a complaint about the sufficiency of the evidence in his appeal, we must first review the Government's case on each point to determine whether the court erred in not granting a directed verdict of acquittal on the five counts submitted to the jury. Following this, we consider the court's rulings during the jury selection, its ruling on the motion to sever Count II, and certain parts of the charge.

I. Sufficiency of the Evidence

1. European vacation (Count I)—During the summer of 1969, Nell, his wife, two other union officers, and their wives travelled to Europe. No one disputes the fact that the union underwrote this trip to the extent of $6,000. Rather, the issues were whether the trip had a union purpose and whether the $6,000 expenditure was properly authorized. At the trial, the authorization question was particularly troublesome. On the one hand, Nell introduced evidence tending to show that the local's Executive Board had authorized the union to reimburse Nell for his vacation, and that the general membership had approved the recommendation. Relying on article XXIII, subdivision 1, section (d) of the IUOE constitution,3 which provides that the Executive Board's actions shall be maintained in full force subject to revocation by the membership, and on testimony and documents tending to show approval by the membership and disclosure of expenditures, he asserted that the evidence showed proper authorization. The Government, on the other hand, relied on article XXIII, subdivision 4, section (c) of the IUOE constitution, which requires specific approval by the membership and written approval by the International's General President to authorize expenditures of union funds for the personal benefit of individual members.4 Nell does not dispute his failure to comply with XXIII(4)(c); he asserts that his ignorance of the particular provision showed lack of intent to defraud.

2. Personal legal fees (Count II)—Like the European vacation expenditures, the fact that monies were spent on Nell's personal legal fees was not disputed. Instead, the controversy over this count centered first on whether the court should have granted Nell's motion to sever it and to try it before the court, and second, on whether the funds in question were "union money" subject to section 501(c). Nell wanted this count severed because the legal fees had been spent to overturn a 1932 Mann Act conviction and a 1970 Florida bribery conviction.5 He argued that this information would prejudice him impermissibly in the jury's eyes. On the merits, he presented testimony tending to show that a voluntary defense fund had been created by the union members and that the disputed legal fees were paid out of this fund. He conceded that the special funds were deposited in the union's general account, but he asserted that the defense fund was earmarked on the books. The government disagreed, since no records pinpointing this alleged earmarking were introduced into evidence. Since nothing distinguished the defense fund from other union money, the Government argued that the ordinary authorization procedures applied. Again, the union minutes and records showed no request for or approval of the payments; thus the Government contends that the expenditures were illegal because unauthorized.

3. Cadillac (Count IV)—In 1968, the union presented a new Eldorado to Nell as a gift in recognition of his ten years' service. A year later, the car was sabotaged.

On August 7, 1969, the union minutes reflected the following entry:

The Executive Board recommended that due to the misfortune that befell Brother Nell's engine, the local replace same with a new body and frame around it.

Nell alleged that the membership later approved the purchase of a replacement car;6 however, the Government disputed this. Both sides agree that the car in issue was for Nell's personal use; again the question was one of proper authorization, since the records revealed no request for or receipt of written approval from the General President in accordance with article XXIII(4)(c). Instead, Nell relied on evidence that the purchases were disclosed in various reports and that the membership knew about them.

4. Automobile and travel allowances (Count VI)—From August 1969 to November 1973, Nell was paid $100 per month for automobile expenses and $65 per week for travel expenses. At the trial, the Government introduced a considerable volume of evidence showing that he received specific reimbursement for these expenses at the same time. His response was that the specific reimbursements covered only the expenditures that exceeded the allowances; he denied receiving double payments.

5. False gasoline receipts (Count VII)—Nell testified that his policy during the period in question was to submit gasoline receipts to the union for reimbursement when he had paid cash for his purchases. At times he submitted the tissue carbon of a particular invoice showing one amount and later submitted the cardboard copy of the same invoice for a different amount. The Government contends that he embezzled union funds to the extent of the duplicate claims. The union, of course, never authorized double reimbursements, nor does Nell argue that it did. Rather, he denies the duplication.

6. Sufficiency.—In deciding whether the court below erred in submitting each of the five counts to the jury, we cannot weigh the evidence or judge credibility. "The verdict of a jury must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it." Glasser v. United States, 1942, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680, 704. Applying that standard to the facts before us, we hold that the court's refusal to grant directed verdicts of acquittal on Counts I, II, IV, VI, and VII was correct. Thus, the most that Nell can hope for on this appeal is a new trial.

II. Jury Selection

When the case came on for trial on October 15, 1974, the first order of business was jury selection. Pursuant to Rule 24(a), Federal Rules of Criminal Procedure, the court conducted the voir dire. Nell directs our attention to two jurors, Mr. Bougher and Mr. Schane, both of whom the court refused to excuse for cause.

Mr. Bougher, in response to a question from the court, revealed that he had been asked to join a union long ago and had declined. After Bougher's strongly anti-union response,7 Nell's lawyer moved to strike him for cause. The court denied the motion. The next question the court asked was whether "any juror held a personal belief, conviction or strong prejudice against the laws of the United States which regulate the conduct of labor unions or their officers?" Mr. Bougher volunteered an answer that speaks for itself:

MR. BOUGHER: I don't know whether this a direct answer to your question or not but just reiterates my prejudice against the thing. My brother and I have been equal partners in a service station in Ft. Lauderdale for twenty-five years. In recent years we have had to compete with this labor market which has robbed us of our help with their inflated wages. We are running a low-profit business to begin with and I am afraid this just affects me right down to the bone whenever a union comes into the picture because we lose our help to the construction industry which are paying these wages that we can't begin to meet; and whether that is your question or not, that is my answer.
THE COURT: Mr. Bougher, I want to advise each of you now that the question of trade unionism is not the issue —
MR. BOUGHER: Well, that is why I said —
THE COURT:—in this case.
MR. BOUGHER: I don't know whether I understood your question.
THE COURT: Any aspect of whether or not jurors might be in favor of the goals or objectives of trade unionism or any other aspect of labor unions or management is not at all
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