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In re A State Grand Jury Investigation Into Corruption

Decided: August 25, 1975.

IN THE MATTER OF: A STATE GRAND JURY INVESTIGATION INTO CORRUPTION IN THE LINDENWOLD NEW JERSEY AREA


Lora, Crahay and Bischoff.

Per Curiam

[136 NJSuper Page 165] These appeals, consolidated and accelerated for disposition, are addressed to two orders entered in the Law Division anent proceedings initiated under the Uniform Act to Secure the Attendance of Witnesses from without a State in Criminal Proceedings, N.J.S.A. 2A:81-18 et seq. (hereafter the uniform act).

We need not detail the entire factual and procedural background, the essentials being that --

In December 1974, during the course of an inquiry into alleged corruption in the Borough of Lindenwold, one Richard Kahr testified at a public hearing conducted by the New Jersey State Commission of Investigation (SCI). Kahr, under a grant of testimonial immunity, recounted instances of bribery in which he had participated in connection with the development of two housing projects, "Pine-Lake" and "Meadowview," in Lindenwold in 1971.

The record reflects that as to "Pine-Lake" and "Meadowview" Kahr operated through limited partnerships, he and another being general partners and appellants -- three New York attorneys -- being limited partners and, through their New York law firm, counsel to the partnerships.

Included in Kahr's testimony before the SCI was the statement that he had previously paid $4,000 to appellants' law firm, ostensibly as fees, and that appellants had returned the money to him to be used as part of a bribe. Kahr testified that appellants were aware of the bribes and in essence agreed to them. (It is appellants' position throughout that "they had absolutely no knowledge respecting Mr. Kahr's alleged misdeeds * * *.")

In December 1974 the SCI, by resolution, referred the matter to the Attorney General, and State Grand Jury proceedings were commenced in January 1975 which have resulted in at least six indictments to date. The State contends that during the grand jury investigation it sought to obtain appellants' voluntary cooperation by negotiation with their New York counsel but that it was fruitless.

In any event, on May 8, 1975 and pursuant to the uniform act, the Attorney General addressed a petition to Superior Court Judge Schoch, Assignment Judge of the Superior Court, the judge assigned by the Chief Justice of the New Jersey Supreme Court to administer the affairs of the State Grand Jury. That application sought a certification

from Judge Schoch to a judge of a court of record in the State of New York that the testimony of appellants and the production of specified records of their law firm and three corporations in which they were allegedly involved were necessary and material to the ongoing State Grand Jury investigation. The certificate issued and an order to show cause to revoke it was denied. Appeal to us therefrom was taken on May 29, 1975. On June 16, 1975 the Supreme Court of New York ordered appellants to produce the records of their law firm for grand jury examination but only after "an appropriate New Jersey court" passed upon appellants' claims of constitutional privilege. (We have not recited all of the procedural undertakings -- including stays by us -- not deeming them necessary to our disposition, noting only that a consent order entered in the New York Supreme Court on June 12, 1975 directed production before the State Grand Jury of specified corporate records in appellants' control.)

As contemplated by the New York court, Judge Schoch conducted a hearing on June 19, 1975 at which one of the appellants testified, and found no privilege in them warranting the nonproduction of the law firm's records relying principally on Bellis v. United States , 417 U.S. 85, 94 S. Ct. 2179, 40 L. Ed. 2d 678 (1974). It was directed that specified documents be produced before the grand jury. On appellants' application Judge Schoch stayed the effect of the ruling pending an expeditious motion to the New York court on appellants' "question of hardship."

More than "hardship" was considered, however. During the pendency of these appeals and in response to this last application Judge Evans of the New York Supreme Court noted appellants' claim of privilege against self-incrimination and that

Respondents [appellants herein] have objected on various grounds. It was stipulated that at this time their personal presence for questioning in New Jersey was ...


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