United States v. Parker, 18129.

• Citation: 447 F.2d 826
• Decision Date: 10 August 1971
• Docket Number: No. 18129.,18129.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Guy F. PARKER, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

447 F.2d 826 (1971)

UNITED STATES of America, Plaintiff-Appellee, v. Guy F. PARKER, Defendant-Appellant.

No. 18129.

United States Court of Appeals, Seventh Circuit.

August 10, 1971.

William A. Barnett, Gerald C. Risner, Chicago, Ill., for defendant-appellant.

William J. Bauer, U. S. Atty., Richard M. Williams, Asst. U. S. Atty., Chicago, Ill., for plaintiff-appellee, John Peter Lulinski, Jeffrey Cole, Asst. U. S. Attys., of counsel.

Before SWYGERT, Chief Judge, and FAIRCHILD and STEVENS, Circuit Judges.

STEVENS, Circuit Judge.

Appellant retired from the Internal Revenue Service in 1965 at the age of 63. On January 16, 1969, he testified as a defense witness at the trial of Jack W. Baum. As a result of that testimony, a nine-count perjury indictment was returned against him on January 28, 1969. The judge who had presided at the Baum trial also conducted appellant's trial. The jury found him guilty on Counts III and IV and not guilty on the other seven counts; the judge sentenced him to imprisonment for three years.

Each of the nine counts of perjury charged a conflict between testimony given by appellant on cross-examination in the Baum trial and statements which he made on June 27, 1967, to Inspectors Weber and Pazdziora, who were then investigating alleged irregularities in an audit examination he had conducted in 1961. The audit involved returns for certain clients of Baum, an attorney, and was conducted in Baum's offices. It had been alleged, in substance, that appellant had found an aggregate deficiency of about $20,000 for the years 1958, 1959 and 1960, which, together with other circumstances, warranted a 50% fraud penalty. Baum allegedly had caused appellant not to make a fraud referral by giving him false information to include in his report and offering him a bribe of $3,000.

The principal false information given to appellant was Baum's explanation of the understatement of income; Baum had said the taxpayer, a masonry contractor, had incorrectly set up a contingent liability for pending litigation relating to certain jobs. There was no basis in fact for this explanation. The Government contended, in both the Baum trial and in appellant's perjury trial, that ordinary diligence would have revealed the fraud and that appellant had deliberately prepared a false Revenue Agent's Report.

We recently affirmed Baum's conviction. United States v. Baum, 435 F.2d 1197 (7th Cir. 1970). There were three counts to Baum's indictment: (1) conspiracy to evade his clients' taxes; (2) an attempt to bribe appellant; and (3) the procurement of a false Revenue Agent's Report. Baum was convicted on the first and third counts but found not guilty of the attempted bribery. Appellant and one Samuel Carmel, an associate of Baum's, were named as co-defendants on the conspiracy count, but were severed; as far as the record here discloses, appellant has never been tried on that charge and, therefore, still retains his presumption of innocence (which, of course, is consistent with the jury's acquittal of Baum on the Count II charge of attempted bribery).

At the Baum trial appellant's direct testimony was quite brief. He stated that he had conducted the audit in Baum's office during the summer of 1961. On one hot day, Carmel (Baum's alleged co-conspirator) invited him into an air-conditioned private office and offered him a short term interest free loan to buy some stock that was sure to increase in value promptly. He construed the conversation as a bribe overture; he replied to the overture by stating that he would think it over; later, according to his testimony, he reported the incident orally to his superior.¹ He denied that Baum ever offered him money.

There were two parts to the cross-examination of appellant. The first was clearly within the scope of the direct examination. In that part of his cross, appellant acknowledged that he considered Carmel's proposal as an overture to a bribe and that he suspected Carmel to be an intermediary for Baum.

Thereafter Baum's lawyer objected to additional questions as going beyond the scope of the direct examination. The court stated: "The scope is as wide open as this case is, counsel, * * * he may inquire into any fact in this case." The prosecutor then asked the series of questions that gave rise to the perjury indictment. Count III charged that appellant falsely "testified in substance that during an interview with two Inspectors of the Internal Revenue Service on June 27, 1967, he did not state that possibly Jack W. Baum told him not to make a fraud referral."

Count IV charged that he falsely testified in substance that during the same interview "he did not say `How else could I have arrived at a figure of omitted income if I didn't specifically identify the jobs involved?'"

This appeal raises a number of questions, including ultimately the question whether the error in the record is of sufficient importance to require a new trial.

I.

The perjury indictment was returned less than two weeks after appellant testified at the Baum trial. The indictment was assigned to the same judge who presided at that trial upon the suggestion of the Government that the two cases were related. Defendant's motion to have the perjury case transferred to the Executive Committee for reassignment to a different judge was denied.

We accept the district court's construction of the applicable rules for the control of its calendar as then in effect,² and find no error in the denial of the motion. We believe, however, that the fact that the assignment procedure enabled the prosecutor to select a judge who may have been persuaded of appellant's guilt before the trial started is a factor we must take into account in weighing the significance of any error committed during the course of the trial.

After the perjury trial, the jury found appellant guilty on only two of the nine counts; the Judge, however, was convinced that he was guilty on all nine counts.³ He had witnessed appellant's testimony in the Baum trial and may well have formed his opinion of appellant's guilt at that time. Although we neither hold nor imply that this would disable him from conducting the perjury trial in a fair and impartial manner, inevitably it created the risk that the accused's presumption of innocence might be undermined by an inadvertent comment by the court, or by unintended bias in the exercise of discretion on evidentiary or other rulings. In these circumstances, we believe it would have been better practice to forestall the charge of bias, or appearance thereof, by sending the case back to the Executive Committee for reassignment. The failure to do so, although not error, increased the risk of prejudice to the accused.⁴

II.

Appellant contends that the alleged false statements were not "material" within the meaning of the federal perjury statute.⁵

Materiality is a question for the court, not the jury, to decide. United States v. Rivera, 448 F.2d 757 (7th Cir. 1971). We do not know the basis of the trial judge's determination of materiality since he simply indicated that he was familiar with the Baum trial. The Government, however, predicates its claim of materiality on its right to impeach a witness by proving prior inconsistent statements. We agree with the Government that if the statements which appellant made to Inspectors Weber and Pazdziora on June 27, 1967, were inconsistent with his direct testimony at the Baum trial on January 16, 1969, a false denial, on cross-examination, that he had made those statements would clearly be "material" within the meaning of the statute.

We do not find any inconsistency between the two statements to the Inspectors which, according to Counts III and IV, appellant falsely denied, and his direct testimony. He could have admitted that Baum had possibly asked him not to make a fraud referral and that he had determined the amount of omitted income by specifically identifying the jobs involved without compromising his direct testimony at all. The Government claims that there is an inconsistency with the thrust of the direct testimony, which tended to implicate Carmel, and thereby impliedly to exonerate Baum from responsibility for the bribe overture. This argument falls, however, because prior to any reference to the interview with the Inspectors, appellant had acknowledged that he thought Carmel was an intermediary for Baum. We do not accept the Government's argument that Counts III and IV charge false denials of prior inconsistent statements.

As we understand the perjury statute, however, the requirement that the false matter be "material" does not mean that a defendant may excuse false testimony on the ground that an objection to its admissibility should have been sustained. Thus, even if we assume, without deciding, that the court should not have permitted the cross-examination of appellant to go beyond Baum's narrow interpretation of appellant's direct testimony, once the court had ruled that the question was proper, the witness had a duty to respond truthfully. Cf., United States v. Manfredonia, 414 F.2d 760 (2nd Cir. 1969).

The subject matter of Counts III and IV, even if not material to appellant's direct testimony, were certainly material to critical issues in the Baum litigation. An admission by appellant that Baum had possibly asked him not to make a fraud referral would have tended to prove Baum's guilt; an admission that he specifically identified the jobs involved in the understatement of income would have tended to prove the conspiracy charge because it would have evidenced knowledge of the fraudulent character of Baum's explanation for the erroneous returns. The alleged false testimony had a tendency to influence the trier of facts in the case on trial and was, therefore, material within the meaning of the perjury statute. United States v. Mitchell, 417 F.2d 1246, 1248-1249 (7th Cir. 1969).

III.

Appellant offered to prove his reputation for honesty...