United States v. Pendergast, 14567

• Decision Date: 19 August 1939
• Docket Number: No. 14567,14459.,14567
• Citation: 28 F. Supp. 601
• Parties: UNITED STATES v. PENDERGAST. SAME v. O'MALLEY.
• Court: U.S. District Court — Western District of Missouri

28 F. Supp. 601

UNITED STATES v. PENDERGAST.

SAME v. O'MALLEY.

Nos. 14567, 14459.

District Court, W. D. Missouri, W. D.

August 19, 1939.

Thomas J. Pendergast and Robert Emmet O'Malley were convicted of income tax evasion. On arraignment for sentence.

Maurice M. Milligan, U. S. Atty., and Sam C. Blair, Randall Wilson, Thomas Costolow and Richard K. Phelps, Asst. U. S. Attys., all of Kansas City, Mo., for U. S.

John G. Madden and R. R. Brewster, both of Kansas City, Mo., for Thomas J. Pendergast.

I. J. Ringolsky, William G. Boatright and Harry L. Jacobs, all of Kansas City, Mo., for Robert Emmet O'Malley.

OTIS, District Judge.

This memorandum has been written and filed for the express purpose of submitting it for publication in the Federal Supplement to the end that there may be in the literature of the legal profession some record of two cases which attracted great national interest and which presented problems difficult of solution. What made the solution of the problems involved the more difficult was the fact that even as they were presented one could hear, figuratively speaking, the imprecations upon defendants of an outraged and injured populace.

The two defendants had been indicted for attempted evasions of income taxes due the United States for the years 1935 and 1936 in violation of Section 145(b), Title 26, U.S.C., 26 U.S.C.A. § 145(b). They entered pleas of guilty. Herein are set out something of the history of the cases, what was said in open court when sentences were imposed, the sentences themselves, and some discussion of legal questions incidentally presented.

Thomas J. Pendergast

Thomas J. Pendergast, one of the defendants, was a private citizen living in Kansas City, Missouri, who had exercised a dominating influence in city, county and state politics for a quarter of a century. Sometimes he was described as a "Political Boss" and sometimes as a "Party Leader", which title was used depending in part on the user's political affiliations and in part on whether the Boss-Leader's power at the moment was at high or low tide. His throne room was a small monastic-like cubicle on the second floor of a two-story building, well removed from the business centre of the city. "1908 Main Street" was synonymous with power, it was the local Mecca of the faithful. To this Mecca came he who would be governor, he who would be senator, he who would be judge, and he who was content to be only a keeper of the pound. Thither came alike great and little, craving audience and favors. They "beat a pathway" to the Boss's door, as Emerson said men would beat a pathway to the door of him who could make a better mouse trap than his neighbors (only Pendergast dealt not in mouse traps, but in ready mixed concrete, designed especially for county and city edifices and streets). Each who came, it is said, awaited, hat in hand, his turn, humbly presented his petition, listened to the mandate of Caesar, and backed away from the Presence. And those who did not actually go in person to bend the pregnant hinges of the knee, even the mightiest, telephoned respectful inquiries, as they passed through the city, asking concerning "Tom's health." The Leader's portrait adorned the walls of eminent public servants both in the capital of the commonwealth and at Washington, along with that of the Father of His Country and that of the Sage of Monticello, between these other portraits, on a somewhat higher level.

Pendergast was Political Boss and Party Leader. He had no real rival, he brooked no genuine competition. It was believed that the tentacles of his octopus-like power reached into every nook and cranny of the city and into almost every enterprise, legitimate and illegitimate, good and evil. Over and over again for a score of years it was whispered that he must be particeps criminis in a hundred different offenses against the laws of state and nation. It was whispered, but never proved. It was never even charged in formal fashion by any prosecutor or by any grand jury, state or federal, that he was guilty of any specific crime (not even in the days before he inherited the sceptre). And there have been prosecutors in Kansas City who were not beholden to Tom Pendergast, able men, brave men, unshackled men. There have been grand juries in Kansas City that were not Boss controlled and which have demonstrated — and that within this very year — that they did not fear to indict any man, if there was evidence to support the indictment. But Pendergast was never even charged with a crime.

Vote Fraud Cases

In 1936 began in Kansas City the now celebrated vote fraud investigations and prosecutions, inspired by the research into facts and into law of patriotic private citizens (whose invaluable contribution to good government has gone all unsung), presented, in the first instance, to a federal grand jury by a daring, able, fearless judge (Albert L. Reeves), and carried on with unflagging zeal and superb ability by a prosecutor who scarcely has a peer (Maurice Milligan). Scores of two-by-four criminals who had robbed citizens of the priceless right to vote were sent to jails and penitentiaries. Yet everyone connected with the prosecutions and with the court felt that the "higher-ups" were escaping deserved punishment. Four federal grand juries in succession, made up of impartial, intelligent, patriotic citizens, were charged by the judges, with all the vigor the judges could command, presenting every theory the judges could conceive, to trace the vote crime infamy to its source, and to indict whomsoever competent evidence indicated was the generalissimo of the army of fraud. And the grand juries, led on by the United States Attorney and aided by the F. B. I., the finest body of investigators any free country ever has known, went out on their campaigns, one, two, three, four, campaigns, and came back again. Fine work they did. But chained to the chariot walked never the one personage they had thought to find and capture. There just was no evidence and the federal grand juries would not indict a man against whom they could find no evidence. They would not even charge a man with a crime because of his unsavory reputation and the dark background of his life. They did not seem to be able to forget the great oath they had taken, that they would "present no one for envy, hatred, or malice, but all things truly, according to the best of their understanding."

Then the Insurance Compromise

There had been instituted in this court on May 28, 1930, before three judges, by a large number of fire insurance companies, separate but similar proceedings in equity to restrain the enforcement of an order made by the Superintendent of the Insurance Department of Missouri fixing fire insurance rates. The contention of the companies was that the rates fixed by the order were confiscatory, that they infringed the constitutional rights of the companies. The companies filed with the Superintendent what they deemed were reasonable rates. The Three-Judge Court temporarily enjoined the enforcement of the Superintendent's order, permitted the companies to collect the higher rates, but required them to deposit the difference between the rates fixed by the order and the rates charged with the court, to await final judgment as to whether the rates fixed by the order were or were not invalid. If the rates finally were held confiscatory, then the companies would get the whole of the amount deposited. If the rates were held not confiscatory, the whole of the amount would be returned to policyholders.

The litigation was involved and difficult. The Three-Judge Court appointed a special master to take testimony, a lawyer of outstanding ability and unquestionable integrity (Paul V. Barnett). He did take testimony, filling thousands of pages. After a painstaking and scholarly analysis of the huge mass of evidence, he made his report to the court, setting out his findings and conclusions. On the whole, they were favorable to the companies. If they were approved by the court, probably the companies would get all they had deposited, the policyholders not a cent. The final stage in the litigation was to be the argument to the court of exceptions to the special master's report and of the case on the merits. But before the day of argument arrived the Three-Judge Court was advised by counsel for the parties that the litigation had been compromised. By the terms of the settlement twenty per centum of the impounded fund was to be distributed to the policyholders and eighty per centum to the companies and for expenses. A decree carrying out the settlement accordingly was entered and the court's custodian began the huge task of distributing several million dollars to a host of policyholders.

Long afterward the United States Attorney for the Western District of Missouri learned of seemingly insignificant and unrelated facts which led him to suspect that the insurance compromise was brought about, at least that it was influenced, by the use of money paid by an agent of the companies to Thomas J. Pendergast. He set out upon a dogged pursuit of what at first was a mere phantom. Again and again he encountered what seemed obstacles that could not be surmounted. But he held on relentlessly to his idea and to his course. When the real nature of his purpose began to be understood powerful individuals did what they could to obstruct him. But others, more powerful, who deserve great credit, came to his assistance, — the Governor of Missouri, the Secretary of the Treasury, the Attorney General, perhaps even the Chief Magistrate. (Not to be too late, reinforcements came by air plane at the last.¹) And always the United States Attorney had the aid of the fine and resourceful lawyers of his immediate staff², and the determined backing of an intelligent and courageous grand jury. (Not one of the grand jurors as yet has claimed exclusive credit for law enforcement in this state.)

Finally the long...