The opinion of the court was delivered by: STERN
In this action the Court must decide whether the Racketeer Influenced and Corrupt Organizations Act (RICO), Title 18 United States Code §§ 1961 et seq., changes the substantive law of conspiracy so that individuals may be charged with each other's actions merely because they are employees of a single governmental unit. The Court holds that RICO does not permit such an imputation of criminal liability.
I. FACTS AND PROCEDURAL HISTORY
On August 23, 1979, a Federal Grand Jury returned an Indictment charging John F. Cryan, Harry Lerner, William J. Leonardis, and Rocco Neri with racketeering activities in connection with the Sheriff's Office of Essex County, New Jersey.
The Indictment charges that defendants Cryan, Leonardis and Neri, high-ranking officials in the Sheriff's Office,
and defendant Lerner, former Chairman of the Democratic Party of Essex County,
used the power and color of their office to extort money from Sheriff's Office employees.
The first two counts of the five-count Indictment charge all the defendants with violating provisions of RICO. Count One charges that from about November 1970 through May 1978, the defendants conspired to conduct the affairs of an enterprise, the Essex County Sheriff's Office, through a pattern of bribery and extortion, in violation of Title 18 United States Code § 1962(d). Specifically, it charges that the defendants conspired "to create and perpetuate the understanding by employees of the Sheriff's Office that annual cash payments, in the guise of political "contributions' and "donations' of approximately one percent of an employee's salary and since in or about 1972 at least $ 100, were a condition of their employment, retention of duty assignments and other employment-related benefits."
Count Two charges the defendants with violating one of the substantive provisions of RICO, Title 18 United States Code § 1962(c).
It charges that between December 1970 and May 1978, the defendants committed 221 acts of bribery and extortion by soliciting and receiving payments from Sheriff's Office employees of between $ 50 and $ 500. The remaining three counts charge defendant Lerner with committing perjury in December 1978 before a grand jury investigating possible corruption in the Sheriff's Office.
Trial commenced on January 7, 1980. The government, in its opening statement, alleged a long-standing conspiracy among members of the Sheriff's Office to accept annual payments from employees as a condition for receiving salary increases, preferred job assignments, promotions, and other benefits. Although the government stated that it had no evidence that the defendants were part of the conspiracy prior to November 1970, the government claimed that it would prove that the scheme originated as early as 1947. The practice continued, the government contended, from administration to administration, and its primary beneficiary at any given time was the county chairman of whichever political party was in power. These county chairmen, the government asserted, controlled the nomination process within their parties; that is, they chose the candidates who would thereafter compete in the general election, including the candidates for Sheriff and the candidates for the Board of Chosen Freeholders, Essex County's legislative body.
The government asserted that defendant Lerner maintained an illegal and unreported cash "slush fund" which he used for campaign purposes, legal and illegal, as well as for personal expenditures. This "slush fund" allegedly consisted of cash collected from the heads of all county departments, including the Sheriff's Office. Once a year, the government alleged, usually in November, each Sheriff's Office employee would place cash in an envelope, in an amount equal to one percent of his or her salary, and give the envelope to one of the named defendants or to an unnamed co-conspirator. The majority of this money, the government asserted, was given to Lerner and deposited in the "slush fund."
The government further alleged that in January 1971, members of one division within the Sheriff's Office, the Identification Bureau, made payments to defendant Lerner in return for Lerner's attempts to influence the Board of Freeholders to grant them a salary increase. These payments, collectively referred to as the "Lerner transaction," are charged in both Counts One and Two.
The government's first two witnesses testified that the alleged scheme was in effect prior to the time covered by the Indictment. Alfred Scriffignano, a former court attendant, testified that between 1959 and 1967 he made annual political contributions with the understanding that such contributions were required to obtain preferred assignments. Otto Eschenroeder, a former process server, testified to transactions occurring as early as 1947. Defendants objected to all testimony concerning transactions prior to 1970. The Court permitted Scriffignano's testimony for the limited purpose of giving the jury background information about the "system" which the government contended the defendants had continued, but ordered Eschenroeder's testimony stricken. A third witness, Anna Santos, testified to a "common understanding" among Sheriff's Office employees that receiving preferred job assignments was conditioned upon making political contributions, but she did not link this understanding to any of the defendants. The Court permitted Santos' testimony subject to later connection to the defendants.
The government then called Wilbur Furlong, an officer in the Identification Bureau who was named by the grand jury as an unindicted co-conspirator, to testify concerning the "Lerner transaction." Furlong testified that in the fall of 1970 before any of the defendants were employed by the Sheriff's Office the Board of Chosen Freeholders denied the Identification Bureau employees a raise while granting one to other employees in the Sheriff's Office. Furlong further testified that in January 1971, several weeks after Cryan assumed office, he, Furlong, suggested that each of the approximately 20 Identification Bureau employees contribute $ 200 to defendant Lerner, who they hoped would persuade the Board of Freeholders to grant them a salary increase. Furlong conceived of this scheme, he said, after having recalled that some years earlier a similar impasse had been broken by a contribution/payment to the then-County Chairman, Dennis Carey. Furlong collected the money, even advancing cash to those employees who did not have it readily available, and with one other employee, gave the approximately $ 4,000 to Lerner.
Defendants objected to the introduction of this testimony. The Court permitted it but, at the defense's request and with the government's consent, instructed the jury that the testimony could not be used substantively against Leonardis or Neri. The Court denied defendant Cryan's request for a similar limiting instruction based upon the government's representation that it would introduce independent evidence to connect Cryan to the transaction. When the government subsequently concluded that it would not be able to introduce such evidence, or even to show that Cryan knew of this collection and payment, defendants moved to dismiss the Indictment or alternatively for a mistrial. The Court held that evidence of the "Lerner transaction" was admissible, if at all, only against Lerner. It further held that a limiting instruction would not be sufficient to cure the prejudicial impact of the evidence. See United States v. Continental Group, Inc., 603 F.2d 444, 456 (3rd Cir. 1979), cert. denied, 444 U.S. 1032, 100 S. Ct. 703, 62 L. Ed. 2d 668 (1980). Accordingly, the Court granted defendants' motion for a mistrial. Defendants' motion to dismiss the Indictment, brought solely on the ground that the government had engaged in misconduct, was denied.
II. SUFFICIENCY OF THE INDICTMENT
An indictment may not charge multiple conspiracies in a single count. Kotteakos v. United States, 328 U.S. 750, 66 S. Ct. 1239, 90 L. Ed. 1557 (1946); United States v. Kenny, 462 F.2d 1205, 1216 (3rd Cir.), cert. denied, 409 U.S. 914, 93 S. Ct. 233, 34 L. Ed. 2d 176, 93 S. Ct. 234 (1972). The rationale for this principle is two-fold. First, a jury verdict on any count which charges two separate offenses is ambiguous: it does not reveal whether the jury considered and reached a verdict on each offense charged. See United States v. Starks, 515 F.2d 112, 116-17 (3rd Cir. 1975). Second, a count charging two offenses does not reveal whether the grand jury intended to charge both offenses, or whether it would have charged either had it been aware that the offenses were distinct. This problem is particularly acute when the multiple offenses charged are conspiracies, because the grand jury may have indicted one defendant on the basis of evidence admissible only against other defendants. See Kotteakos v. United States, supra, 328 U.S. at 769-70, 66 S. Ct. at 1250.
Defendants contend that Count One is defective as a matter of law because it does not charge a single conspiracy among the defendants, but in fact charges at least two separate conspiracies among entirely different groups of people: first, a conspiracy between defendant Lerner and members of the Identification Bureau to influence the awarding of a salary increase by the Board of Chosen Freeholders; and second, a conspiracy among all the defendants and others to create and perpetuate a system to extort annual political contributions from all of the Sheriff's Office ...