United States v. Rosenthal

Decision Date17 March 1903
Citation121 F. 862
PartiesUNITED STATES v. ROSENTHAL et al. (three cases).
CourtU.S. District Court — Southern District of New York

Syllabus by the Court.

The Attorney General, the Solicitor General, nor any officer of the Department of Justice, is authorized by sections 359, 367, or other provision of the Revised Statutes of the United States (U.S. Comp. St. 1901, pp. 207, 209), to conduct, or to aid in the conduct of, proceedings before a grand jury, nor has a special assistant to the Attorney General such power.

A special assistant to the Attorney General is not an officer of the Department of Justice, within the meaning of such sections.

A special assistant to the Attorney General, appointed to investigate and report concerning alleged fraudulent importations of Japanese silks at the port of New York, and to prepare and conduct such civil and criminal proceedings as may result therefrom, is not authorized by law to conduct, or to aid the conduct of, proceedings before a federal grand jury, and indictments based upon such proceedings so conducted should be quashed upon motion.

The Merchants' Association of the City of New York assured the Attorney General that, if necessary, it would furnish funds to compensate the special assistant who should be appointed for such purpose. This arrangement was inter alios and did not disqualify the appointee, who became an employe of the United States, to whom alone he could look for compensation, and for whom he performed his duty with fidelity and probity.

Henry L. Burnett, U.S. Atty., and W. Wickham Smith, Special Asst atty. gen.

Dittenhoefer Gerber & James (A. J. Dittenhoefer and Frank H. Platt, of counsel), for defendants Rosenthal and Cohn.

Judson G. Wells, for defendant Browne.

'THOMAS District Judge.

On January 9, 1902, the Attorney General issued to W. Wickham Smith, the following commission:

'Sir: You are hereby appointed a Special Assistant to the Attorney General to investigate and report concerning alleged fraudulent importations of Japanese silks at the port of New York and to prepare and conduct such civil and criminal proceedings as may result therefrom.
'Your compensation will be determined by the Attorney General on the completion of your services. This appointment is made subject to any change which may be made by the Department.
'Execute the customary oath of office and forward the same to this Department.'

In the previous December the Merchants' Association of the City of New York asked Mr. Smith, after examination, to determine whether there was reasonable ground for reopening a former inquiry concerning such importations. Mr. Smith, after an interview with Mr. Wakeman, appraiser, reported that there should be a thorough investigation, and suggested that the proper federal officer should designate 'some competent and suitable person familiar with customs law to make a thorough investigation of this matter, and that the person so designated shall be permitted to have access to all official documents relating to the subject on file in any office or department of the government. ' Thereupon the Merchants' Association, by letter, conveyed Mr. Smith's suggestions to the President, with whom, as well as with the Attorney General, two officers of the association later conferred. Thereupon Mr. Dresser, the president of the association, and Mr. Mead, its secretary, or one of them, informed Mr. Smith 'that the Attorney General was in favor of an investigation, but had suggested to them that the appropriation out of which he obtained funds for the employment of special counsel was exhausted, and that he had at that time no money available for the purpose; that they had thereupon stated to the Attorney General that, if he thought the matter was one requiring investigation, and would appoint some competent and suitable officer for that purpose, they would be responsible for his fees in case the Attorney General was unable to pay him; * * * that they had not suggested to the Attorney General the appointment of any particular person for this purpose, ' but that Mr. Smith's name had been suggested by one of the Attorney General's assistants, and also by the Secretary of the Treasury. There is no reason for doubting the accuracy of this statement as it appears by Mr. Smith's affidavit, nor is it important that the Merchants' Association, in its official organ or otherwise, appropriated the credit for his selection. Mr. Smith was neither a member of its board, nor was he ever its general counsel, although he states that on two or three different occasions since 1897 'they have consulted or retained me in special matters relating to the revenue laws, and they paid me for my services. The last work I performed for the Merchants' Association was in the spring of the year 1900, and they paid me by a check dated March 13, 1900, and I have never since been retained in any matter by them, nor received any money from them. I did not enter into any contract or arrangement with the Merchants' Association of New York with regard to my services in these silk fraud cases. Whatever arrangement they made was with the Attorney General of the United States, before I was even invited to take part in the cases. I have never asked the Merchants' Association, or any of its officers, for any compensation in these cases, or for any stipulation or undertaking as to the payment of compensation. They have never offered me any compensation. I have never received a dollar for the services already performed, which extend over a period of a year, either from that association or from anybody else, and have not even been reimbursed for amounts actually laid out by me for traveling and other expenses. I have never even received any communication, formal or informal, oral or written, with reference to compensation for my services in these cases from the Merchants' Association since the conversation already narrated, when they reported to me their interview with the Attorney General. * * * There has never been a time from the execution of this commission until the present moment when I have ever considered myself as the attorney for the Merchants' Association. There has never been a time when they have in any way assumed to me to be my employers or clients. I have never at any time consulted them as to any course that I should pursue. I have never at any time communicated to them (except so far as I have communicated it to the general public) the details of the results of my investigation. I have not seen the president of the Merchants' Association a half a dozen times during the past twelve months, and its secretary perhaps as often. There is absolutely no foundation whatever for the assertion or insinuation that I have ever at any time represented them in this matter, or that they have asked me to represent them, or have sought in any way to influence my conduct or ascertain my plans.' The evidence produced upon these motions fully sustains the statement made by Mr. Smith The association undoubtedly expects to pay for his services, and will probably do so, pursuant to its promise to the Attorney General. It is natural that Mr. Smith should recognize these probabilities, and with candor express himself accordingly, if there were occasion. But he was in no wise responsible for the arrangement. It placed him under no obligation to the Merchants' Association, inasmuch as the government alone retained him, and is liable to make proper compensation for his authorized services. His relation to the matter is highly honorable, and independent, as becomes an attorney of this court, employed by the United States as its sworn official.

The next question is, what authority did the appointment vest in Mr. Smith? After receiving the appointment and duly qualifying, Mr. Smith pursued vigorously and fairly the investigation of the alleged offenses, and with the sanction and co-operation of the District Attorney appeared before the grand jury, and chiefly conducted the proceedings that resulted in the indictments, whose validity is now accused on account of Mr. Smith's action with reference to them. Should the indictments be quashed? A survey of the powers of the District Attorney and the Attorney General and his authorized officers and assistants is necessary. The Revised Statutes provide: 'There shall be appointed in each district * * * a person learned in the law, to act as attorney for the United States in such district' (section 767 (U.S. Comp. St. 1901, p. 599)); and 'it shall be the duty of every district attorney to prosecute, in his district, all delinquents for crimes and offenses cognizable under the authority of the United States' (section 771 (U.S. Comp. St. 1901, p. 601)). But the Attorney General is the head of the Department of Justice (section 346 (U.S Comp. St. 1901, p. 202)), the legal adviser of the President (section 354 (U.S. Comp. St. 1901, p. 206)), and to him the officers of the other departments of the government may resort for legal advice (section 356 (U.S. Comp. St. 1901, p. 206)). During almost a century of the government the Attorney General was, as he remains, a member of the Cabinet, the law officer to the President and the Executive Departments, and in 1861 he was given supervisory powers respecting the officers connected with the courts throughout the federal domain; but his own participation in litigation was confined to the conduct of cases in the Supreme Court (Act Sept. 24, 1789, c. 20, Section 35; 1 Stat. 92), until it was extended to the Court of Claims (Act June 25, 1868, c. 71, Section 5; 15 Stat. 75). To understand the legislation of 1870, to which attention will soon be called, this original conception of what the Attorney General was, and what he and his officers were...

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