Wagner v. United States, 17180.
| Decision Date | 09 April 1959 |
| Docket Number | No. 17180.,17180. |
| Parties | John A. WAGNER and J. Paul Peek, Appellants, v. UNITED STATES of America, Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
COPYRIGHT MATERIAL OMITTED
Cecil C. Bailey, Theodore W. Glocker, Jr., J. Edwin Gay, Jacksonville, Fla., Fletcher G. Rush, Orlando, Fla., Lucius A. Buck, Jacksonville, Fla., for appellants.
Richard Kelly, Asst. U. S. Atty., James L. Guilmartin, U. S. Atty., Tampa, Fla., for appellee.
Before RIVES, TUTTLE and CAMERON, Circuit Judges.
The appellants were indicted on 21 counts, all but five of which — Counts 1, 6, 13, 20, and 21 — were dismissed on motion. Count 1 charges both appellants with conspiracy; Count 6 charges the appellant Peek with bribery; Counts 13, 20, and 21 charge the appellant Wagner with making false entries of competitive bids on Government purchase orders. Peek was President of Orlando (Florida) Fuel Oil Company, Inc., a dealer in fuel oil, and Wagner was a civilian employee of the Government in the purchasing or contracting office at Orlando Air Force Base.
The trial extended over thirteen days and the printed record consists of 1647 pages, in addition to which there are many original exhibits. Each defendant was found guilty on the counts directed against him and was sentenced to imprisonment for three years. On appeal two main classes of claimed error are urged: (1) failure to direct a judgment of acquittal as to each count of the indictment; (2) erroneous oral argument of Government counsel.
This sufficiency of the proof as to each count of the indictment was properly preserved for review by motion for judgment of acquittal.
Count 1 charged that from February 27, 1951, to July 8, 1953, Wagner and Peek conspired to defraud the United States; that, in the negotiating of contracts for the purchase and delivery of fuel oil to the Air Base, Wagner was required to obtain at least three competitive bids from fuel oil suppliers in the vicinity of the Base; that they conspired for Wagner to make purchases of fuel oil without obtaining such competitive bids as he "was then and there required to do by virtue of Air Force procurement regulations existing on the said 27th day of February, 1951, and at all times thereafter named in said indictment"; that the price agreed upon by the defendants was in excess of a price per gallon which the Base could have obtained in the absence of the conspiracy. The overt acts alleged consisted of various payments of money by Peek to Wagner and various awards of purchase orders for fuel oil by Wagner as Contracting Officer to Orlando Fuel Oil Company, Inc.
The appellants insist that the Government failed to prove the unlawful conspiracy or any action of the conspirators thereunder. First, the appellants contend that during the time covered by the indictment competitive bids were not required by the Air Force procurement regulations as alleged in the indictment. The Armed Services Procurement Act of February 19, 1948, 62 Stat. 21, had required advertising and competitive bids for nearly all purchases in excess of $1000, but Section 2(c) (1) of that Act provided "that such purchases and contracts may be negotiated by the agency head without advertising if — (1) determined to be necessary in the public interest during the period of a national emergency declared by the President or by the Congress." The President declared the existence of a national emergency on December 16, 1950, Proclamation No. 2914, 50 U.S.C.A.Appendix note preceding section 1; and on December 18, 1950, the Assistant Secretary of the Air Force authorized — "* * * the negotiations of all purchases and contracts by the Department of the Air Force under Section 2(c) (1) of the Armed Services Procurement Act of 1947 during the period of said National Emergency."
Under the Armed Services Procurement Act of 1947, the Defense Department had promulgated procurement regulations governing all of the Armed Forces, 15 Federal Register 8025-8052. Procurement Procedures of the Regulations of the Department of the Air Force appear in 15 Federal Register 8970-8992. Section 402.101 of the Armed Services Procurement Regulation provides in part:
"Whenever supplies or services are to be procured by negotiation, price quotations, supported by statements and analysis of estimated costs or other evidence of reasonable prices and other vital matters deemed necessary by the Contracting Officer, shall be solicited from all such qualified sources of supplies or services as are deemed necessary by the Contracting Officer to assure full and free competition with the procurement of the required supplies or services, in accordance with the basic policies set forth in Subpart C of Part 400 of this subchapter, to the end that the procurement will be made to the best advantage of the Government, price and other factors considered." (Emphasis supplied.)
The Air Force Regulation, Section 1002.202, implementing the Armed Services Procurement Regulation, states:
(Emphasis supplied.)
Under the italicized provisions of those regulations, the Contracting Officer had established a policy of obtaining at least three "informal quotations of prices," before making purchases, and those, we think, may fairly be termed "bids." That Wagner understood that requirement is shown by his notation on the back of the mimeographed form "Purchase Memorandum" of three quotations, the lowest being that of Orlando Fuel Oil Company. The Government's evidence tended to show that a number of the quotations so entered had not, in fact, been solicited or supplied. Peek probably did not know of the particular regulations under which the three quotations were required, but the jury could draw the inference that he knew of the policy and knew that Wagner had to obtain other bids or quotations to obtain "full and free competition."
Two of Peek's competitors testified that they would have sold and delivered the fuel oil at a lower price than that obtained by Orlando. In our opinion, however, that proof was unnecessary, for once the conspiracy to defraud was established it was not necessary to show that the fraud was actually perpetrated. The crime consists of entering into the conspiracy and is complete as soon as one or more of the conspirators does an overt act to effect the object of the conspiracy. 18 U.S.C.A. § 371, and cases cited in notes 144 and 147 thereto. Some of the overt acts charged are the subjects also of substantive offenses for which each of the defendants was indicted and which will presently be discussed. We conclude that there was sufficient evidence to justify submission of Count 1 — the conspiracy count — to the jury.
Count 6 charges Peek with giving a bribe to Wagner to corruptly induce Wagner to purchase fuel oil for the United States from Orlando Fuel Oil Company without securing competitive bids from other fuel oil suppliers. The "thing of value" was the cancellation of Wagner's indebtedness to Orlando Fuel Oil Company in the amount of $133.39. Peek, as President of that Company, had made out a credit memo which instructed the bookkeeper to write the account off the books of the Company. Wagner testified that he was not informed of this action, and there is no direct evidence that he was so informed. Further, on October 10, 1951, when the indebtedness was canceled, the Air Force Base was procuring its fuel oil from Orlando Fuel Oil Company under an Armed Services Procurement Contract issued out of Washington, D. C., covering the period from July 1, 1951, to December 31, 1951. If the evidence under Count 6 were sharply separated from that under Counts 13, 20, and 21, presently to be considered, we would not think that the jury could properly infer that Wagner knew of the cancellation of his indebtedness or that Peek was looking to the future, after December 31, 1951, and that he canceled the indebtedness as a bribe to induce Wagner's omission of competitive bids after that date. In the light of the strong evidence on those three counts, however, we think that the jury could draw the necessary inferences as to Count 6.
Charges 13, 20, and 21 charged Wagner with making false entries of competitive bids on particular Government purchase orders in violation of 18 U.S.C.A. § 1001. We think that the mimeographed "Purchase Memorandum," on the back of which the entries of the three bids were made, was a part of the purchase order, or certainly that any variance was not substantial. See, Cromer v. United States, 1944, 78 U.S. App.D.C. 400, 142 F.2d 697, 698; Rathbun v. United States, 10 Cir., 1956, 236 F.2d 514, 516. There was positive evidence that none of the three listed bids other than that of the Orlando Fuel Oil Company had actually been made. The books and records of the Orlando Fuel Oil Company listed various cash payments to Wagner as well as payments in the form of checks as business expenses for advertising, travel, etc. Over the period January 1952 to May 1952, the Government purchases from the Orlando Fuel Oil Company and the payments to Wagner bear an obvious mathematical relationship:
Purchase
Govt. Exhibit Amount Date
37 16,000 gallons
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