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John B. Kelly, Inc., of Pennsylvania v. Occupational Safety and Health Review Com'n

argued: August 13, 1990.

UNITED STATES
v.
BENJAMIN H. WOODS, APPELLANT IN NO. 90-3044; MICHAEL A. HARTMAN, APPELLANT IN NO. 90-3045; ABLEBUILT CONSTRUCTION COMPANY, INC. A/K/A ABLEBUILT HOMES, INC., APPELLANT IN NO. 90-3046



On Appeal from the United States District Court for the Western District of Pennsylvania; D.C. Criminal Nos. 89-00061-1, 89-00061-2, 89-00061-3.

Mansmann, Greenberg, and Seitz, Circuit Judges.

Author: Greenberg

Opinion OF THE COURT

GREENBERG, Circuit Judge

On June 22, 1989, appellants Benjamin Woods, Michael Hartman, and Ablebuilt Construction Co., were charged in a twenty-nine count indictment which included a RICO count under 18 U.S.C. § 1962(c), the City Council of Pittsburgh being the RICO enterprise, numerous Hobbs Act counts and tax counts, arising from public corruption in the Pittsburgh area.*fn1 They were all convicted on certain counts at a jury trial and have appealed from the judgments of conviction and sentence.*fn2 While they have raised various issues we have concluded that only their constitutional challenge to their convictions on Count 3, charging a violation of RICO, 18 U.S.C. § 1962(c), warrants discussion.

I. FACTS

Inasmuch as the jury delivered a guilty verdict we relate the evidence in a light favorable to the government. In the early 1980's, Joseph Wozniak, an unindicted co-conspirator who testified with a grant of immunity, was able to have Eco-Seal, a weatherproofing product he sold, specified for use in projects of the Pittsburgh Housing Authority. In addition, Wozniak sold another waterproofing product, Sinak, for use on public projects.*fn3 In return for these sales, Wozniak bought hundreds of dollars of tickets for political functions from the Director of the Housing Authority, Daniel Pietragallo, paying for them in cash.*fn4 It appears, however, that the ticket situation was from Wozniak's view point out of control as he was "being hit by a lot of tickets, by a lot of sources" and "was having a problem paying on some of these tickets." Consequently, Wozniak at Pietragallo's suggestion, arranged a meeting with Woods. Woods was known to Wozniak from "political functions" and "fund raisers" and Wozniak was aware that he was a member of both the Pittsburgh City Council and the Board of Directors of the Housing Authority. When Pietragallo told Wozniak to see Woods, Wozniak understood that he was being told to do business with Woods.

Woods was apparently an influential member of the City Council as he was chairman of its Finance Committee from 1983-85 and in 1985 was elected its president, an office he held until 1987 when he was elected its President-Pro Tem. Woods also served as a member of the Board of Directors of the Housing Authority at the times material to this case.

At their first meeting, Wozniak agreed to "kick back" to Woods approximately 10% of the gross Wozniak realized from sales of Eco-Seal to contractors for Housing Authority projects. Wozniak understood that the arrangement was that as long as he made the payments to Woods, "everything would continue the way it was." On the other hand, if he did not pay up Wozniak understood that there would be "a very good chance that Eco-Seal would no longer be used" or that a competitor "could come in there with the same arrangement" and he would lose the business. Woods and Wozniak also discussed the use of Eco-Seal in projects of other government agencies and, according to Wozniak, Woods was to use his influence in "opening up doors" and would receive 10% of the gross Wozniak realized from these sales.

In early 1983, in anticipation of a particularly large sale, Woods and Wozniak reviewed how Woods was to be paid and agreed that Wozniak would pay him the 10% directly by check. Not surprisingly, however, they became uncomfortable with this arrangement because of Woods' public position. Accordingly, they agreed that Woods would thereafter be paid through checks made payable to third parties but that his percentage would be increased to 25% of gross sales. On January 4, 1983, in furtherance of this new understanding, Wozniak paid Woods $1,800 for his influence as a member of the City Council. Wozniak instructed his accountant to record the check as the payment of a commission and this transaction is racketeering act ten in the RICO count.*fn5 At about the same time Wozniak paid Woods a total of $20,220, through a series of six checks and a political contribution.*fn6 These six checks comprise six of the eight subparts to racketeering act nine.*fn7 The $20,220 represented roughly 25% of the $79,600 in gross sales Wozniak had made to a company known as Lori Waterproofing for use on a city project.

While most of the payments to Woods were in consideration for his influence in Housing Authority projects, some of the projects involved were undertaken by the Three Rivers Stadium Authority and the Allegheny County Sanitary Authority (ALCOSAN). Thus, Woods arranged a meeting between Wozniak and the Executive Director of the Three Rivers Stadium Authority following which Wozniak sold Eco-Seal for Three Rivers Stadium, a sale valued at $10,890. For this sale Wozniak paid Woods a total of $3,711, through two checks payable to B&C Equipment Rental, one dated October 19, 1983, for $1,000, and a second dated December 21, 1983, for $2,711, payments reflected in racketeering act twelve.*fn8

In December 1983, Woods introduced Wozniak to James Creehan, the Executive Director of ALCOSAN, which placed an order for Eco-Seal totaling $3,902.95. At the time of the purchase Wozniak, Woods, and Creehan discussed the fact that ALCOSAN rules required advertisement for competitive bidding on contracts in excess of $4,000. On March 2, 1984, at Woods' instruction, Wozniak wrote a check payable to Burt Labovick, a party unknown to Wozniak, for $500. This transaction, charged as racketeering act eleven,*fn9 was a payment to Woods, although at trial Wozniak could not recall the particular contract involved. On January 25, 1984, Wozniak paid Woods $1,146 directly by check, a payment Wozniak described as the "kick back" to Woods for the ALCOSAN job.*fn10 This payment is set forth in the indictment as racketeering act thirteen.*fn11

In August 1984, Wozniak sold $24,940.90 worth of Sinak to Tri-State Waterproofing for use in a Housing Authority project known as Bedford Dwellings. On August 31, 1984, Wozniak wrote a check payable to Rivell Industrial Contracting, Inc. for $4,400. Wozniak testified that he never had any dealings with that company and that he wrote the check at Woods' instruction to pay him for the Tri-State contract. This transaction is set forth in racketeering act nine.

Wozniak also sold Sinak for use in the construction of the Bloomfield Bridge, Anjo Construction being the contractor on that job. Originally the contract and plans for the bridge specified the use of linseed oil to seal the concrete but Wozniak met with Paul J. McDermott, the Director of the Pittsburgh Department of Engineering and Construction (DEC), to discuss specification of Sinak instead of linseed oil and Woods, at Wozniak's request, also spoke with McDermott about the matter.

The DEC is the agency responsible for the design and construction of Pittsburgh's capital budget projects but it must obtain authorization from the Finance Committee of City Council before it can award contracts. McDermott knew Woods to have been a member of the Finance Committee during his time as a council member, and was also aware that Woods had been the committee's chairman at sometime between 1983-85. Woods contacted McDermott several times by telephone to promote the use of Sinak on the Bloomfield Bridge project and McDermott testified that he felt that Woods was trying to use his influence to get him to specify the use of Sinak. Specifically, McDermott testified as follows:

Q. Did you at any time, Mr. McDermott, believe that Mr. Woods was attempting to influence you to use Sinak on the Bloomfield Bridge job?

A. Yes.

Q. Did you at any time feel pressured in any way by Mr. Woods to use Sinak on the Bloomfield Bridge job?

A. Well, I felt the attempt to influence; and if that's calculated as pressure, yes.

Q. What was -- in what way did you feel pressured by Mr. Woods?

A. Only by the number of calls and his sense of interest in having the Sinak used.

App. at 968.

Eventually McDermott issued a change order to make Sinak the specified weatherproofing product for the Bloomfield Bridge project and Wozniak supplied it to Anjo Construction. On November 4, 1986, Wozniak sent Anjo Construction an invoice which was later paid for $43,128.36. On January 9, 1987, at Woods' instruction Wozniak wrote a check payable to Faber Rental for $4,300, even though he knew nothing of that company. This check was a payment to Woods for approximately 10% of the value of the Sinak sale on the Bloomfield Bridge. This transaction is set forth in racketeering act fourteen.*fn12

During roughly the same time period that he was dealing with Wozniak, Woods entered into a similar relationship with Ablebuilt Construction Co., through its president Michael Hartman. Ablebuilt was in the business of constructing and renovating housing in Pittsburgh, including projects for the Pittsburgh Housing Authority and the Urban Redevelopment Authority.

On March 27, 1984, The Housing Authority entered into an agreement with Ablebuilt to modernize certain row houses as part of a Housing Authority project, known as Northview Heights, for $1,403,000. Louis Billota, a Pittsburgh landscaper, who like Wozniak had been granted immunity, testified that after he heard that Hartman and Ablebuilt had been awarded the Northview contract, he contacted Woods to request that Woods contact Hartman to put a "good word" in for him concerning a possible landscaping subcontract and that Woods told him that "he'd take care of it." Billota made a landscaping sub-contracting bid on Northview Heights for $155,000, and was awarded the subcontract three or four days after his conversation with Woods.

After Bilotta had been awarded the contract, Hartman attempted to withdraw it, causing Bilotta to ask Woods to intervene on his behalf. Woods instructed Bilotta to meet Hartman at a local restaurant, where Hartman produced the contract which he cut to $82,000. Hartman also agreed to advance Bilotta ...


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