The Champion
Jan/Feb 1998

RICO Report
By Barry Tarlow

Barry Tarlow is a nationally prominent criminal defense lawyer practicing in Los Angeles, CA. He is a frequent author and lecturer on criminal law. He was formerly a prosecutor in the United States Attorney's Office and is a member of The Champion Advisory Board. The author wishes to thank Kevin Jon Heller, a member of his firm, for his invaluable assistance in the preparation of this column.

Inconsistent Arguments in Successive Cases and the Obligations of Defense Lawyers -- Is Defense Different?

As discussed in the last RICO Report, prosecutors' actions are governed by a two-fold ethical duty: "to refrain from improper methods calculated to produce a wrongful conviction;" and "to use every legitimate method to bring about one." Berger v. United States, 295 U.S. 78, 88 (1960). Defense attorneys' ethical duties are different, as the Supreme Court noted in Polk County v. Dodson, 454 U.S. 312 (1981):

In our system a defense lawyer characteristically opposes the designated representative of the state. The system assumes that adversarial testing will ultimately advance the public interest in truth and fairness. But it posits that a defense lawyer best serves the public, not by acting on behalf of the state or in concert with it, but rather by advancing the undivided interests of his client.

Id. at 318-19 (quoting Ferri v. Ackerman, 444 U.S. 193, 204 (1979)); see also ABA Stds., The Defense Function, Std. 4-1.2(b) ("The basic duty defense counsel owes to the administration of justice and as an officer of the court is to serve as the accused's counselor and advocate with courage and devotion and to render effective, quality representation.").

Because defense lawyers' ethical duties are different than prosecutors' ethical duties, it is appropriate to ask whether defense lawyers, like prosecutors, must avoid presenting inconsistent arguments in successive cases.

One situation in which this question arises is a case in which an attorney represents a defendant at trial and on retrial. In this situation, a recent Second Circuit decision indicates that although it is probably not unethical for a defense attorney to make inconsistent arguments, an attorney risks severely damaging his client's defense by doing so, because (1) the previous argument may well be admissible against the defendant at the later trial; and (2) the defense attorney will likely be disqualified at the later trial if the judge rules that the earlier argument is admissible.

That was the holding of United States v McKeon, 738 F.2d 26 (2d Cir. 1984) -- the case, mentioned last month, that both United States v. Salerno, 937 F.2d 797 (2d Cir. 1991) ("Salerno II"), and United States v. GAF, 928 F.2d 1253 (2d Cir. 1991), relied on to hold that prosecutors' statements to a jury (Salerno II) and bills of particulars (GAF) are admissible against the government in criminal cases as admissions of a party-opponent.

McKeon involved three trials for a conspiracy to export firearms, a violation of 18 U.S.C. 371. Central to the prosecution's case was a warehousing document bearing the letterhead of the defendant's company, a document that the prosecution alleged in the second trial (the first had ended in a mistrial) had been photocopied on a copy machine located in the bank in which the defendant's wife worked. In his opening statement at the second trial, the defendant's attorney told the jury that the defense would present expert testimony that the copy machine at the bank was not the copy machine that had been used to duplicate the warehousing document. Like the first trial, the second also ended in a mistrial.

The defense attorney's opening statement in the third trial differed substantially from his opening statement in the second trial. He made no mention of calling an expert to testify, and told the jury that the defendant had given the warehousing document to his wife to photocopy as a favor to one of his tenants -- the individual, according to the defense, who was actually responsible for exporting the firearms. The prosecution then moved to admit the attorney's opening statement at the second trial as a party-admission under Rule 801(d)(2) of the Federal Rules of Evidence. The district court agreed.

Having won its evidentiary argument, the prosecution then moved to disqualify the defendant's attorney on the ground that he would likely have to be called as a witness to explain the inconsistencies between his two opening statements. Again the district court agreed, disqualifying the attorney pursuant to New York's Disciplinary Rule 5-102(A), which requires an attorney to withdraw when "it is obvious that [he] ought to be called as a witness on behalf of his client."

The Second Circuit affirmed both rulings. With regard to the opening statement, the court held that the prosecution can use "an earlier opening statement by counsel as an admission against a criminal defendant in a subsequent trial," id. at 31, as long as five requirements are met:

[T]he prior argument involves an assertion of fact inconsistent with similar assertions in a subsequent trial. Speculations of counsel, advocacy as to the credibility of witnesses, arguments as to weaknesses in the prosecution's case or invitations to a jury to draw certain inferences should not be admitted;

The inconsistency . . . should be clear and of a quality which obviates any need for the trier of fact to explore other events at the prior trial;

The court must further determine that the statements of counsel were such as to be the equivalent of testimonial statements by the defendant;

Some participatory role of the client must be evident, either directly or in-ferentially; and

The district court should, in a Fed. R. Evid. 104(a) hearing outside the presence of the jury, determine by a preponderance of the evidence that the inference the prosecution seeks to draw from the inconsistency is a fair one and that an innocent explanation for the inconsistency does not exist.

Id. at 33.
Applying its newly-minted test to the defense attorney's statements at the second trial, the court had little trouble determining that the statements were admissible against the defendant at the third trial.

Noting that the defendant refused to waive his right to have his attorney explain the inconsistency between the opening statements to the jury, the appellate court also had little trouble affirming the district court's disqualification order. The court concluded that, as the district court had found, it would violate New York's Disciplinary Rule 5-102(A) to allow the attorney to continue to represent the defendant, because the attorney would be placed in the "untenable" position of having "to argue a witness's credibility regarding material conversations to which the lawyer was a party in order to explain other statements by the lawyer which are in evidence." Id. at 35.

Admittedly, McKeon does not specifically hold that a defense attorney who has made an inconsistent argument at an earlier trial will always be disqualified at a later trial; the Second Circuit specifically noted in support of its holding that the defendant refused to waive the right to call the attorney as a witness to explain the inconsistency. Nevertheless, given that such a waiver may well be fatal to the defendant's case, it is likely that a court would disqualify the attorney even if the defendant was willing to waive the conflict. See, e.g., United States v. Cunningham, 672 F.2d 1064, 1068 (2d Cir. 1967) (finding waiver insufficient where attorney would have to cross-examine a witness concerning conversations she had with him; attorney would be placed "in the position of an unsworn witness"). The sensible practice, therefore, would be for defense lawyers in similar situations to either not change their theory of defense between trials, or to withdraw and allow the defendant to retain new counsel when such a change is absolutely necessary to his defense.

Ninth Circuit Disqualifies Attorney from
Representing a Defendant Declared Guilty

A lawyer will also probably be disqualified if he/she attempts to argue that a client is innocent of a crime after having represented to the court in another and related case that the defendant did, in fact, commit that crime. That was the result of the recent case United States v. Stites, 56 F.3d 1020 (9th Cir. 1995), in which the Ninth Circuit affirmed a district court's decision to disqualify Stites' retained attorney, Juanita Brooks, from representing him at his trial for RICO and mail fraud violations, violations of 18 U.S.C. 1962(c) and 18 U.S.C. 1341, respectively.

The problem with Brooks' representation of Stites, the court found, was that she had earlier represented one of Stites' co-defendants, Cheryl Dark, and had told the district court during Dark's sentencing that Stites was "a wicked person, fully responsible for [Dark's] crime," that Stites was "the mastermind" of the crime, "a thief and a fraud", "a cheap con artist", "one of the biggest cons this system has ever seen," and that "as an officer of the court and an attorney myself, it makes me angry to see that people are able to so pervert our system of justice." Id. at 1023. (Other than those slight faults, Stites was not a particularly bad person.) Given her earlier claims, the court concluded, Brooks could not ethically argue, during Stites' case, that he was innocent of the crime.

Lawyers, we all know, may change their position on the law from case to case without disgrace. But when, as Brooks so pointedly put it to Judge Keep, she as an attorney and officer of the court was offended by the criminal deeds -- "the massive fraud" -- of Stites, she could not swallow her words and present Stites as an innocent man.... [E]ven if a certain insincerity may accompany the filling of an advocate's role, nothing in our professional ethics permits an advocate to tell a court one set of facts today and a contradictory set of facts tomorrow.

Id. at 1025-26
Because cases presenting such situations are relatively rare, it is difficult to predict how significant the holding in Stites will be. One attorney, Bill Genego, recently used Stites to argue that one of his clients received ineffective assistance of counsel at trial. That attempt, however, was, rebuffed by the district court. See United States v. Fowlie, No. CV 95-802-ANS (C.D. Cal. Oct. 20, 1997) (Order denying motion under 28 U.S.C. 2255).

Daniel James Fowlie was convicted in 1988 for running a Continuing Criminal Enterprise (CCE), a violation of 21 U.S.C. 848, despite asserting his innocence. In 1995, Genego filed a motion under 28 U.S.C. 2255 on Fowlie's behalf, arguing that Fowlie received ineffective assistance of counsel at trial because his trial attorney faced a number of insuperable conflicts of interest when Fowlie decided to assert his innocence and go to trial. "[T]o establish a Sixth Amendment violation based on conflict of interest, a federal habeas petitioner must show (1) that counsel actively represented conflicting interests, and (2) that an actual conflict of interest adversely affected his lawyer's performance." Sanders v. Ratelle, 21 F.3d 1446, 1452 (9th Cir. 1994); see also United States v. Mays, 77 F.3d 906, 908 (6th Cir. 1996) (applying same standard on direct appeal).

As Genego's briefs persuasively demonstrate, the first prong of Sanders is more than satisfied in Fowlie's case. Fowlie's trial attorney also previously represented Fowlie's son Gus in another case stemming from the same CCE. Eerily paralleling Stites, during Gus Fowlie's sentencing Daniel's attorney attempted to mitigate Gus' responsibility for the enterprise by arguing that Daniel was the real mastermind behind the CCE, and that Gus was being controlled by his father:

It would be foolish to dispute the fact that Mr. Fowlie senior was running an extremely large marijuana organization. And what concerns me [as] counsel for Gus Fowlie is that that might rub over onto Gus Fowlie who was indeed a minor participant, nothing more than unfortunately the son of Dan Fowlie senior.

* * *

And Gus Fowlie was somewhat intimidated by his father. He probably should have said no. He told the probation officer that he did object a couple of times to what his father was asking him to do, . . . and his father would get angry. So rather than standing up to him, he went along with it.

Having previously proclaimed Daniel Fowlie's guilt, Genego argues, Fowlie's attorney was faced with two actual and irreconcilable conflicts of interest when Fowlie decided to go to trial: first, between his duty to zealously defend Fowlie, whose trial strategy was to argue that he was innocent, and his duty to present facts to the court that he knew were false; and second, between his duty to zealously defend Fowlie and his professional interest in maintaining his professional credibility with the court. Indeed, as Genego points out, the latter conflict was particularly acute in Fowlie's case, because his prosecutor and judge were the same judge as in his son's case. Under those circumstances, it would have been devastating to the professional reputation of Fowlie's attorney to "swallow [his] words and present [Fowlie] as an innocent man." Stites, 56 F.3d at 1025.

Genego's briefs also carefully and forcefully establish that the attorney's conflicts "adversely affected his . . . performance." The CCE involved a large scale marijuana distribution ring. During Fowlie's jury trial, the government introduced a number of items seized during a search of a ranch owned by a corporation that Fowlie controlled, arguing that the presence of the items on the ranch indicated that he was involved in the marijuana ring. Had Fowlie's attorney not already proclaimed his guilt to the court at Gus's sentencing, he could have argued that, in fact, the items belonged to the manager of the ranch, Wade Westmoreland, who had been in possession of drug trafficking paraphernalia when he was arrested the previous day. Because he had already proclaimed Daniel's guilt, however, the attorney never even mentioned Westmoreland at Daniel's trial. (It should also be noted that Daniel's trial lawyer had also previously represented Westmoreland in a related drug case, further exacerbating his conflicts of interest in Daniel's case.)

Similarly, having earlier argued that Gus had participated in the marijuana ring only because he was afraid of his father, Fowlie's trial lawyer was unable to challenge one of the essential elements of the CCE charge, that he had occupied a position of manager, leader, or organizer with respect to five people, in the commission of a series of narcotics felonies. See 21 U.S.C. 848(c). Given that the jury had to unanimously agree on the five people that Fowlie allegedly managed, led, or organized, one potentially fruitful line of defense was to argue that his son Gus had participated in the marijuana ring independently, and had not been managed, led, or organized by him. That argument, however, was simply foreclosed by the attorney's earlier representation of Gus.

In addition to having a strong legal and factual argument on his side, Ninth Circuit precedent also strongly supported Fowlie's Section 2255 motion. To begin with, Stites was directly on point: having previously asserted Fowlie's guilt, Fowlie's trial lawyer could not ethically contend at trial that, despite his prior assertion, Fowlie was actually innocent. Moreover, the Ninth Circuit had recently vacated a sentence in a case that presented a similar conflict of interest, United States v. Del Muro, 87 F.3d 1078 (9th Cir. 1996).

Del Muro was convicted of falsely claiming to be a United States citizen, a violation of 18 U.S.C. 911. Del Muro then filed a Rule 33 motion for a new trial, claiming that his trial counsel had rendered ineffective assistance of counsel by failing to interview or subpoena witnesses that he, Del Muro, had suggested. Del Muro also asked the court to appoint him substitute counsel for his Rule 33 motion, to avoid placing his trial attorney in the unenviable position of having to argue his own ineffectiveness. The district court denied Del Muro's request for substitute counsel and then, following an evidentiary hearing, denied his Rule 33 motion, as well.

On appeal, the Ninth Circuit reversed the district court's denial of substitute counsel. Noting that "[a] defendant who established an actual conflict 'need only show that some effect on counsel's handling of particular aspects of the trial was likely," Id. at 1080 (quoting United States v. Miskins, 966 F.2d 1263, 1269 (9th Cir. 1992)), the court held that:

[t]here was an actual, irreconcilable conflict of interest between Del Muro and his trial counsel at the hearing on the motion for new trial. . . . When Del Muro's allegedly incompetent trial attorney was compelled to produce new evidence and examine witnesses to prove his services to the defendant were ineffective, he was burdened with a strong disincentive to engage in vigorous argument and examination, or to communicate candidly with his client.

Despite Stites and Del Muro, and despite the fact that two of the foremost ethics professors in the United States -- Geoffrey Hazard of the University of Pennsylvania Law School and Dennis Curtis of USC School of Law -- filed declarations on Fowlie's behalf, the district court summarily denied Fowlie's Section 2255 motion.

In four short paragraphs of "legal analysis," the court concluded that: (1) "the prior representation of Gus Fowlie and Wade Westmoreland raised at best a possibility of conflict, but no actual conflict arose"; (2) "as to the alleged conflict from defendant's counsel's own self-interest, defendant's arguments are pure speculation," because "defendant's attorney consistently argued that others, and not the defendant, were behind the illegal scheme"; (3) "[d]efendant fails to establish that counsel's failure" to affirmatively argue Fowlie's innocence "was anything other than counsel's trial strategy"; and (4) "defendant fails to offer evidence to support his argument that any item of evidence should have been offered or that any position which defendant urges should have been taken to prove his innocence." Order at 5-6. Of course, a cynic might say the court embraced this surprisingly liberal position because it was necessary to avoid reversing the conviction.

The district court's order provides a stunning example of the principle "if the facts don't support you, ignore them." As even the most cursory read of Genego's briefs demonstrates, all four of Judge Stotler's conclusions are legally and logically indefensible. Fowlie deserved better.

Why a Defense Attorney Can Take
Conflicting, Successive Positions

There is a third situation in which defense attorneys need to consider the ethical and legal implications of making inconsistent arguments in successive cases: where an attorney is required to rely on the credibility of a witness in one case, and then to attack the credibility of that same witness in another case. Such a situation recently faced prominent New York attorney Jay Goldberg in a series of cases revolving around Sammy "the Bull" Gravano -- now known as "Sammy the Bull's Eye" -- in which Goldberg had to take two conflicting positions concerning Gravano's believability as a witness.

In the first case, Goldberg represented Joe Gambino in his 1993 trial by RICO, a violation of 18 U.S.C. 1962(c), and RICO conspiracy, a violation of 18 U.S.C. 1962(d), charges that stemmed from what the prosecution alleged was an illegal gambling and loansharking operation functioning in a number of cities in Connecticut. According to the prosecution, Gambino ran the Connecticut faction of the Gambino crime family, and used that faction to engage in illegal gambling and loansharking. He was convicted on all charges.

Central to the prosecution's case against Gambino was the testimony of Sammy Gravano, to whom the prosecution had made "an offer he could not refuse" after he, John Gotti, and Frank LoCascio had been indicted with Gambino on the RICO charges. On direct examination, Gravano testified that he was, in fact, a captain in the Gambino crime family; that Gambino was involved in running the Connecticut faction of the Gambino crime family through a member of Gambino's crew named Tony Megale, with whom he had seen Gambino meet at the Ravenite Social Club in New York; that the Connecticut faction was involved in gambling, loansharking, and labor racketeering; and that each captain in the Family, including Gambino, contributed $3000 to John Gotti every Christmas.

On cross-examination, Goldberg seized on the major weakness in the prosecution's case: namely, that although it had evidence linking Gambino to the Connecticut faction and evidence linking members of the Connecticut faction to racketeering, it did not have direct evidence linking Gambino himself to racketeering. He thus elicited from Gravano that although Gravano was the acting head of the Gambino family at the time, he did not know whether Gambino "was involved in any way in the Connecticut gambling and loansharking operation;" that Gotti never told him that Gambino was supposed to bring him money from the operation every week; and that no one had ever said that Gambino was responsible for bringing money from the operation to Gotti.

Goldberg then argued to the jury that it should believe Gravano's admissions on cross-examination and acquit Gambino of the racketeering and racketeering conspiracy charges:

Now, whatever one says about Salvatore Gravano it is clear that the role he played was such in this enterprise if Joe Gambino was involved in Connecticut money lending and loan-sharking Salvatore Gravano would know it.

* * *

He is in a position obviously to know who has responsibility for making money, who has responsibility for delivering money, what the operations of the family are, and what does he tell you? Joe Gambino to his knowledge never had any responsibility with respect to Connecticut gambling and money lending.

* * *

In detail, Mr. Gravano was asked, sir, during the five years that you were part of the administration of this family, did anybody, John Gotti, Joe Armone, Angelo Ruggiero, any human being on the face of this earth say, suggest, intimate that Joe Gambino was connected to Connecticut gambling and loansharking? And his answer was no.

The second case in the series was Goldberg's successful representation of Pasquale "Patsy" Conte at his 1993 trial for murder, conspiracy to murder, and drug trafficking. Once again Gravano was the prosecution's star witness, as it was he who directly linked Conte to drug trafficking by recounting a number of personal conversations he had with Conte outside the Ravenite Social Club in mid-1990:

I told him that whatever he was doing we wanted to happen again under John [Gotti]. John had troubles with courts and lawyers and the administration was broke and we needed some money and I more or less gave him a tacit approval to go back and start his drug operation or whatever he was doing then.

I told him I didn't want to know the details of his business. All I wanted was money for John.

* * *

I had a conversations [sic] with him where he told me a fellow in his crew named Cheech, he was a friend of ours, a made member in our family, would have to go and make a trip to Italy, to resume the operations, to start them up.

I told him I didn't care what he did. And whatever he had to do, do it.

United States v. Gotti, 171 F.R.D. 19, 40-41 (E.D.N.Y. 1997) (quoting from the transcript of the Conte trial). Goldberg's cross-examination of Gravano was devastating. None of the numerous FBI debriefings of Gravano indicated that he had ever informed the FBI of his conversations with Conte about drugs. Thus, during cross-examination, Goldberg attempted to force Gravano to admit that those conversations were "not about drugs at all, but about inducing Conte to pay $500,000 DiBono [the murder victim] misappropriated," id. at 45, and that he had given perjured testimony in order to inculpate Conte:

You have said it here, sir, that there was an occasion, however, that was drug-related when you asked Pat Conte to, as you claim, resume his drug dealing. Did you say that to this jury; yes or no?

A: Yes.

As a matter of fact, your conversation with Pat Conte on April 23, 1990 for the period of seven minutes was concerned with, was it not, to seeing that either he or Louie DiBono paid $500,000 to you for moneys that you believed DiBono had robbed from you. Isn't that true; yes or no?

A: No.

* * *

Q: You were asked, you recall, whether anybody who visited with you and John Gotti ever had any discussions related to narcotics trafficking, weren't you asked that in a case in Manhattan, yes or no?

In a different case pertaining to different people, I was asked that question.

Do you recall having been asked whether, taking all of the surveillance at the Ravenite Club, all of the comings and goings of people, whether any of that was related to drug traffic? And you responded, not with you or with John. Do you remember making that statement?

A: Yes.

The final case in the series was a Rule 33 motion for a new trial that Goldberg filed in 1995 on behalf of Frank LoCascio, who had been convicted on extraordinarily thin evidence, three years earlier, along with John Gotti, of RICO violations that alleged the murder of Louis DiBono and racketeering. Sammy the Bull's Eye was once again the star witness at trial.

Goldberg's new trial motion was based on the discovery, in September 1993 -- before Conte, and thus before Goldberg accused Gravano of perjury -- that the prosecution had known that Gravano was involved in a drug trafficking conspiracy with Conte prior to LoCascio's trial, but had decided to deliberately withhold that information on the indefensible ground that it was not "helpful." The prosecution's explanation for its failure to turn over that information during discovery is worth quoting in full:

Although we were obviously aware of Gravano's conversations with Conte -- and in that sense the nondisclosure of them was "deliberate" -- neither I nor anyone under my supervision believed that the details of those conversations were either necessary or particularly helpful to the impeachment of Gravano based on his responsibility for narcotics trafficking.

Putting aside the evident danger of allowing the prosecution, instead of the defense, to decide what kinds of information are "necessary" or "helpful" to the impeachment of a prosecution witness, that explanation suffered from an even more serious flaw: it was completely wrong, because Gravano had specifically and repeatedly testified at LoCascio's trial that no crew of the Gambino family was authorized to deal drugs, and that he himself had "a principle" against dealing drugs.

Moreover, as Goldberg forcefully and persuasively argued in his Rule 33 motion, by allowing Gravano to testify that he had never been involved in drug trafficking despite his knowledge that Gravano had conspired with Conte in 1990 to do exactly that, the prosecution knowingly presented perjured testimony at LoCascio's trial. Indeed, the prosecution even had the audacity, despite its knowing presentation of perjured testimony, to argue during closing argument that Gravano was a credible witness because he was testifying pursuant to a plea agreement that obliged him to "at all times give complete, truthful, and accurate information and testimony:"

This agreement was very important. If he gets caught by us he's sunk. [If he] lied he shot himself in the head. [If he] gives false testimony . . . all bets are off. . . . We gave him an enormous incentive, both in his relationship with us and in his relationship with the judge, to tell you the truth.

One would think that, given the prosecution's unethical and unconstitutional behavior, the district judge would have granted Locascio a new trial. The normal rules of the criminal justice system, however, do not seem to apply to a trial that involves John Gotti. Not only did Judge Glasser deny Goldberg's Rule 33 motion, United States v. Gotti, 171 F.R.D. 19 (E.D.N.Y. 1997), appeal docketed, No. 97-1228(L) (2d Cir. July 18, 1997), he attacked Goldberg's professional ethics in his published opinion:

Any doubt as to whether the conversation with Conte was as testified to by Gravano was cast upon it by Conte's lawyer who sought to have Gravano admit that the conversation was not about drugs at all, but about inducing Conte to pay $500,000 DiBono misappropriated. It is that same lawyer who now, on behalf of LoCascio, contends the conversation to have been drug related. . . [And it] is that same lawyer who, in representing a defendant in another case in which Gravano testified on behalf of the government, exhorted the jury to believe Gravano when his testimony exculpated his client, who now contends that he is a perjurer

Id. at 46.
It is true that Jay Goldberg took inconsistent positions concerning Gravano's credibility as a witness in the Gambino, Conte, and LoCascio cases; indeed, Goldberg himself readily admits that he did. See Jay Goldberg, Informal Opinion, The Champion, September/October 1997. In Gambino, Goldberg relied on Gravano's testimony, arguing that the jury should acquit Gambino because Gravano, who was head of the Gambino family at the time, had no personal knowledge nor had ever heard from anyone else that Gambino was involved in gambling and loansharking at the Ravenite Social Club. Next, in Conte, Goldberg branded Gravano a perjurer, arguing that he had fabricated testimony involving both himself and Conte in drug trafficking in order to ensure Conte's conviction. Then, finally, in LoCascio, Goldberg reversed course yet again, arguing that Gravano's testimony in Conte concerning his involvement with Conte in drug trafficking had in fact been correct, and that, because the prosecution had knowingly failed to disclose that information to the defense before LoCascio's trial, Locascio was entitled to a new trial.

The question, however, is not whether Goldberg took inconsistent positions, but whether his decision to do so was either ethically wrong or legally forbidden. The answer to that question is an unequivocal "no." The relationship between Gambino and Conte is the easiest to deal with: it was simply not inconsistent to argue that Gravano was telling the truth concerning Gambino's involvement in racketeering, but was lying when he tried to implicate Conte in drug trafficking. After all, it is a shibboleth of the criminal justice system that witnesses often lie about some things while telling the truth about others. Indeed, that explains why jury instructions on impeachment by prior perjury state that, even after it has been shown that a witness lied on a previous occasion, it is for the jury to decide "how much of his testimony, if any" it wishes to believe. (Seventh Circuit Pattern Jury Instruction No. 3.21.) Judge Glasser's unfounded criticism, however, assumes precisely the opposite: his position seems to be "once a liar, always a liar; once truthful, always truthful."

Moreover, the decision that limits the ability of defense attorneys to make inconsistent argument in successive cases, McKeon, itself expressly permits an attorney to reverse himself on matters relating to a witnesses credibility; as noted earlier, the Second Circuit's decision provides that "speculations of counsel, advocacy as to the credibility of witnesses, arguments as to weaknesses in the prosecution's case or invitations to a jury to draw certain inferences should not be admitted." McKeon, 738 F.2d at 33. Goldberg's inconsistent argument pertained solely to Gravano's credibility as a witness; as a result, McKeon would not have allowed the prosecution to use the statements in Gambino in Conte, and they could not have been used to disqualify Goldberg for making inconsistent statements concerning Gravano's credibility in the two cases.

McKeon makes sense. As Goldberg notes in his column to refuse to allow him to take inconsistent positions concerning Gravano's credibility would place him -- and any attorney who represents clients in cases in which witnesses appear again and again -- in an impossible situation: "either I could decline to take any cases in which I could potentially have to dispute Gravano's credibility or perhaps I should advise subsequent juries, such as the Conte jury, that I had, in an earlier case, argued in favor of Gravano's credibility." Jay Goldberg, Informal Opinion, The Champion, September/October 1997. Neither option is tenable.

The change of position between Conte and LoCascio presents a thornier issue, but the conclusion is ultimately the same.

First, McKeon covers that change as well, because the change in position concerned a witness's testimony about the same event -- Gravano's involvement with Conte in drug trafficking -- and was thus concerned solely with the credibility of a witness.

Second, Goldberg's change of position was not only permitted but required by the code of ethics governing criminal defense attorneys. As noted earlier, the adversary system "posits that a defense lawyer best serves the public, not by acting on behalf of the state or in concert with it, but rather by advancing the undivided interests of his client." Polk County v. Dodson, 454 U.S. at 312, 318-19 (1981). Although it is unethical for a defense attorney to ask a question which implies the existence of a factual basis for which a good faith basis is lacking, see ABA Code of Professional Responsibility, DR 7-102(A)(1), "[d]efense counsel's belief or knowledge that the witness is telling the truth does not preclude cross-examination." ABA Stds., The Defense Function, Std. 4-7.6(b); cf. ABA Stds., The Prosecution Function, Std. 3-5.7(b) (noting that although a prosecutor's "belief that the witness is telling the truth does not preclude cross-examination, [it] may affect the method of cross-examination"). Indeed, failing to cross-examine a truthful witness may deny the defendant his right to zealous representation, see ABA Code of Professional Responsibility, Canon 7, particularly when the attorney refuses to cross-examine the witness because of an "unsubstantiated belief" that to do so would be tantamount to presenting false evidence, cf. United States ex rel. Wilcox v. Johnson, 555 F.2d 115 (3d Cir. 1977).

In light of these ethical considerations, it seems clear that Jay Goldberg was justified in offering inconsistent assessments of Gravano's credibility during Conte and LoCascio. As noted earlier, although Goldberg knew prior to Conte that the prosecution believed that Gravano was involved in drug trafficking with Conte -- as evidenced by the fact that it named Gravano as Conte's co-conspirator -- there was no report of that involvement in the voluminous FBI debriefings the prosecution turned over to Goldberg during discovery. That being the case, although he had reason to suspect prior to Conte that Gravano was, in fact, involved in drug trafficking, he could not be certain of that fact. Goldberg was clearly justified, therefore, in challenging Gravano's testimony that he and Conte had discussed drug trafficking outside the Ravenite Social Club, because: (1) such cross-examination did not require Goldberg to imply the existence of a factual situation that he could not in good faith believe was true; and (2) had Goldberg not engaged in such cross-examination, he would have failed to offer evidence on behalf of Conte (that Gravano and Conte had discussed money, not drugs) on the basis of an unsubstantiated subjective belief that the evidence was false.

Third, and finally, an argument can be made that Goldberg did not, in fact, offer inconsistent assessments of Gravano's credibility in Conte and LoCascio. As noted above, although he knew that the prosecution believed that Gravano was involved in drug trafficking with Conte, he also must have recognized that [Gravano could have been lying about that involvement in order to be a more "useful" witness for the prosecution.] Given that possibility, it is completely consistent to have argued both that Gravano was lying about the drug trafficking when he testified at Conte's trial, and that, if it had evidence to the contrary, the prosecution seriously violated LoCascio's right to due process by not disclosing that evidence to the defense and by allowing Gravano to offer testimony at LoCascio's trial that the prosecution believed was false. If Gravano was lying to the prosecution about being involved in drug trafficking with Conte, both of those arguments are true.

In short, whether viewed from a legal, ethical, or factual perspective, Judge Glasser's ad hominem swipe at Jay Goldberg's ethics fell wide of the mark. Far from being unethical, Goldberg did what any good defense attorney would have done in the same situation: put his clients' interests -- all of his clients' interests -- above his own professional interest in being liked and respected by judges and prosecutors. No more and no less could or should have been expected.

Imaginative Lawyering Guts Major RICO Prosecution

The original purpose of Congress in enacting RICO was "to seek the eradication of organized crime." Pub. L. 91-452, 1, 84 Stat. 922 (1970). Nevertheless, through "innovative" tactics and pleadings perhaps best described as "statutory manipulation," prosecutors have been able to bring within the reach of RICO matters that have nothing to do with organized crime and that are, quite simply, inappropriate subjects for RICO prosecution. In United States v. Gottesman, 724 F.2d 1517 (11th Cir. 1984), for example, the Eleventh Circuit affirmed a RICO conviction that stemmed from two pirated videotapes of copyrighted motion pictures. The acts of piracy themselves were misdemeanors and did not constitute RICO predicates. The prosecution eventually characterized the acts as two counts of interstate transportation of stolen property, noting that the pirated tapes had crossed state lines and had a value in excess of $5000, and then identified those two counts of interstate transportation of stolen property as the RICO predicate acts. Id. at 1519-20; see also United States v. Elliot, 571 F.2d 880, 899 (5th Cir. 1978) (affirming RICO conviction while describing the RICO enterprise as "loosely connected . . . myriapod criminal network"). The Eleventh Circuit had little difficulty approving the prosecution's bootstrapping. Id.; but cf. United States v. Guiliano, 644 F.2d 85, 87 (2d Cir. 1981). ("We doubt that Congress expected the [RICO] statute to be used in circumstances where an embezzlement can be escalated into a federal bankruptcy fraud, and then joined with another bankruptcy fraud to form an alleged pattern of racketeering activity.")

The reach of RICO is particularly expansive when mail fraud, 18 U.S.C. 1341, or wire fraud, 18 U.S.C. 1343, serve as the predicate acts for a prosecution. Like RICO itself, mail fraud is an elastic concept that can be stretched, in this age of global communications, to criminalize just about anything. The Fourth Circuit defines mail fraud as any scheme "that is contrary to public policy and conflicts with accepted standards of moral uprightness, fundamental honesty, fair play, and right dealing." United States v. Mandel, 591 F.2d 1347, 1361 (4th Cir.), aff'd in relevant part, 602 F.2d 653 (4th Cir. 1979) (en banc).

Moreover, courts have repeatedly held that mail fraud can be a RICO predicate even though the defendant's conduct violated another, more specific, statute that is not a RICO predicate. See, e.g., United States v. Zang, 703 F.2d 1186 (10th Cir. 1982) (holding that Emergency Petroleum Allocation Act does not preempt mail and wire fraud statutes); United States v. Computer Sciences Corp., 689 F.2d 1181 (4th Cir. 1982) (holding that mail and wire fraud charges could be brought even though defendant's conduct was also charged under the False Claims Act); United States v. Weatherspoon, 581 F.2d 595 (7th Cir. 1978) (holding that defendant could be charged under mail fraud statute for the same acts that supported her conviction under the false-statement statutes); United States v. Busher, 817 F.2d 1409 (9th Cir. 1987) (holding that criminal provisions of the Internal Revenue Code concerning tax evasion do not preempt mail-fraud statute); but cf. United States v. Henderson, 386 F. Supp. 1048 (S.D.N.Y. 1974) (holding that mail-fraud statute is preempted by the criminal provisions of the Internal Revenue Code concerning tax evasion).

Despite these cases, however, defense attorneys have had some success in arguing that, for purposes of RICO, the mail fraud statute is, in fact, preempted by a more specific statute. In a recent case out of Chicago, for example, Robert Tarun, a partner at legal powerhouse Winston & Strawn, convinced a thoughtful federal district judge, Elaine Bucklo, to dismiss 31 counts in a RICO indictment spanning approximately two decades on the ground that those counts were preempted by the Labor and Management Relations Act ("LMRA"). United States v. Palumbo Brothers, Inc., No. 96-C-613.

Palumbo Brothers centers upon wages and benefits paid by the corporate defendants in the case, PBI and Monarch, to their unionized employees and to their employees' unions, the Teamsters Union and the Laborers Union. The prosecution's indictment alleges that the defendants engaged in a pattern of racketeering activity spanning from approximately 1973 to 1996. Count 1 of the indictment, the RICO count, alleges that the defendants executed a scheme to defraud their employees and labor unions by systematically under-reporting the number of hours worked by the union employees, thereby reducing the defendants' contributions to the pension and health and welfare funds established, in violation of the collective bargaining agreements (CBA) between the defendants and the unions. As predicate acts for that scheme to defraud, the prosecution alleges that, to conceal their scheme, the defendants sent numerous false statements and compliance documents through the mail to the Teamsters Union, Laborers Union, and the Illinois Department of Transportation.

Counts 8-30 allege acts of mail fraud connected to the scheme to defraud. These acts are charged as separate violations of the mail fraud statute, as opposed to their use in Count 1 as predicate acts for the RICO violation. Similarly, Counts 35-42 are based on the alleged submission of false statements by the defendants in connection with required ERISA filings.

In his motion to dismiss, Tarun argued that all of the counts discussed above were pre-empted by the National Labor Relations Act (NLRA), 29 U.S.C. 151, et seq., and/or Section 301 of the LMRA, 29 U.S.C. 185, because the acts underlying those counts were wrongful only by virtue of the collective bargaining agreements (CBAs) between the defendants and the unions. The government, by contrast, argued that the acts alleged in the indictment were proscribed by laws other than the federal labor laws, and that the relevant counts of the indictment were thus not preempted by the NLRA or the LMRA.

In a well-reasoned opinion, Judge Bucklo agreed with Tarun. She began by noting that both the NLRA and LMRA contain provisions expressly preempting state and/or federal jurisdiction over conduct within their purview. Order at 5; In order "to remedy conduct that is arguably protected or prohibited" by sections 7 or 8 of the NLRA, the NLRA "pre-empts state and federal court jurisdiction" in favor of the National Labor Relations Board ("NLRB"). See Amalgamated Ass'n of Street Employees v. Lockridge, 403 U.S. 274, 276 (1971). Similarly, although the LMRA allows for federal court jurisdiction over disputes involving breaches of CBAs, Section 301 of the LMRA pre-empts claims that are "founded directly on rights created by collective bargaining agreements . . . [or] substantially dependent on analysis of a collective bargaining agreement." Caterpillar, Inc. v. Williams, 482 U.S. 386, 394 (1987).

Judge Bucklo then analyzed the language of the indictment, concluding that the acts underlying the various counts of the indictment were wrongful only because of the CBAs between the defendants and the unions. Order at 7; see, e.g., Trans World Airlines, Inc. v. Sincropi, 887 F. Supp. 595, 606 (S.D.N.Y. 1995) ("The right to be paid [a particular] wage does not exist in any source of law, and [comes] into existence solely through the terms of the collective bargaining agreement. The employee would have no right to it if the collective bargaining agreement did not exist."), aff'd, 84 F.3d 116 (2d Cir. 1996); Chicago District Council of Carpenters Pension Fund v. Ceiling Wall Sys., Inc., 915 F. Supp 939, 944 (N.D. Ill. 1996) (concluding that right to proper amount of fringe benefit contributions is based in a CBA).

As Judge Bucklo noted, all of the misconduct alleged in the indictment concerned CBA determined wages and benefit payments. With regard to wages, the indictment alleged that, in violation of the CBAs, the defendants failed to pay overtime, failed to pay a full eight hours of wages to employees who worked more than four hours but less than eight hours through no fault of their own, and failed to pay show-up time. With regard to benefit payments, the indictment alleged that the defendants reduced the amount that they had to pay to the unions by submitting reports to the unions that under-reported the number of hours worked by union employees, data used to calculate how much, under the CBAs, the defendants owed to the unions' pension and health and welfare plans.

Having concluded that the acts underlying the various counts of the indictment were wrongful only because of the CBAs between the defendants and the unions, Judge Bucklo then addressed the central question in the case: whether the defendants' alleged breaches of the CBA, "consistent with the LMRA statutory scheme, also may serve as the basis for predicate acts of mail fraud under RICO," that is, whether "Congress intended for the LMRA to preempt RICO claims." Order at 8. Yet again, Judge Bucklo ruled in favor of Tarun and against the prosecution.

Initially, Judge Bucklo noted that Congress has not expressly stated an intent to remove RICO claims stemming from breaches of CBAs from the pre-emptive effect of the LMRA. Indeed, she pointed out that Congress's designation of only one violation of the federal labor laws, Section 186 of Title 20, as a predicate act under RICO has led courts to conclude that "Congress was being selective as to what activities were being removed from the ambit of the exclusive jurisdiction over the labor law. The violation of no other labor statute constitutes a RICO predicate act." Butchers Union, Local No. 498 v. SDC Inv. Inc., 631 F. Supp. 1001, 1009 (E.D. Cal. 1986).

Judge Bucklo then turned to the "two step analysis for determining when Congress intended to pre-empt a claim" under Section 310 of the LMRA:

The first step asks whether the claim seeks to vindicate a substantive right derived from some source other than the collective-bargaining agreement.... If a claim survives the first inquiry, the second step asks whether adjudication of the claim requires interpretation of the CBA. When such interpretation is required, it impermissibly interferes with the federal scheme for labor dispute resolution.

Underwood v. Vengango River Corp., 995 F.2d 677, 684 (7th Cir. 1993), overruled on other grounds by Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246 (1994).

Judge Bucklo did not reach the second step of the Underwood inquiry, because she found that the indictment failed to satisfy the first step. Noting that the first step of the test is satisfied only "if the predicate acts for the RICO claim are wrongful by virtue of something other than the obligations in the CBA," Order at 10, she reiterated her earlier conclusion that "[o]nly the CBAs guarantee the defendants' unionized employees the right to a double-time wage, show-up pay, or any other wage and benefit provisions that are part of their CBA," Order at 11. As a result, Judge Bucklo held, "[a]ny remedy for these alleged violations must be pursued under federal labor law which 'was intended to provide the exclusive remedy for generic fraud claims relating to rights under a CBA.'" Order at 12 (quoting Hubbard v. United Airlines, Inc., 927 F.2d 1094, 1099 (9th Cir. 1991), overruled on other grounds by Hawaiian Airlines, 512 U.S. at 246); but cf. United States v. Boffa, 688 F.2d 919, 930 (3d Cir. 1982) (holding that a scheme by an employer to defraud unionized employees of seniority rights guaranteed in a CBA "lies squarely within the ambit of the mail fraud statute," and thus refusing to preempt a RICO claim based on the employer's mail fraud).

In addition, Judge Bucklo also dismissed the counts of the indictment that charged the defendants with making false statements in connection with required ERISA filings. 18 U.S.C. 1027. Noting that "[t]he truth or falsity of the defendants' statements . . . cannot be determined without reference to the underlying CBAs which created the ERISA obligations," Judge Bucklo concluded that the ERISA counts, like the mail-fraud counts, were preempted by the LMRA, because they owed their existence solely to the terms of the CBAs. Order at 14.

Robert Tarun's exceptional result for his clients in Palumbo Brothers serves as a necessary reminder of the power of imaginative lawyering. As a federal district judge in Texas once commented while dismissing a RICO indictment, "RICO was designed to keep racketeering out of business, not to make racketeers out of businessmen." Palumbo Brothers is one a vivid example of the truth of this principle.

Readers are a vital source of information without which this column could not be supplied with current information on RICO developments. Information regarding developments in pending cases, decisions and interesting briefs and motions should be sent to:

RICO Report
Barry Tarlow
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Los Angeles CA 90069
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