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UNITED STATES v. MCCARTHY

June 4, 1969

UNITED STATES of America, Plaintiff,
v.
John P. McCARTHY, a/k/a, Jack McCarthy, Defendant



The opinion of the court was delivered by: FRANKEL

FRANKEL, District Judge.

 Defendant John P. McCarthy has been found guilty by a jury of failing to disclose in a required report to the Secretary of Labor payments he received from a corporate "labor relations consultant" at a time when he was an officer or employee of a labor organization. The charge leading to this conviction was laid under Sections 202(a) and 209(b) of the Labor Management Reporting and Disclosure Act of 1959, 29 U.S.C. §§ 432(a) and 439(b). *fn1"

 Two problems must now be resolved in order to determine whether the verdict may stand. First, pressing a subject partially explored before trial but left for completion (in case of need) until now, defendant has renewed and expanded in a further evidentiary hearing the charge that evidence obtained by unlawful wiretaps or bugs - evidence which should have been, and should now be, suppressed - was used against him, vitiating the conviction. Second, moving in arrest of judgment or for a new trial, McCarthy makes a cluster of arguments which variously (a) renew attacks, heretofore rejected, upon the validity of Count 38 and its statutory foundation, (b) assert that the reporting requirements in question, properly construed, did not require disclosure of the unreported payments underlying the conviction, and (c) assail the charge to the jury for omission of the statutory provision, 29 U.S.C. § 186(c), listing the exceptions from the reporting requirements.

 The various arguments thus tendered, not always clearly or with perfect consistency, have been studied with care. None can justify nullification of the jury's verdict.

 I.

 The motion to suppress evidence assertedly gotten as a result of unlawful eavesdropping has been the subject of evidentiary hearings preceding the trial and resumed after the jury's verdict. It was shown that two men who did business with McCarthy (Basis and Kapilow) had had their telephones tapped by state investigators for two or three months around the autumn of 1961, and that conversations including or relating to McCarthy had been overheard in this way. It was also shown that McCarthy's office had been bugged (at his desk or in its vicinity) by the Federal Bureau of Investigation during the period from April 12, 1962, to October 14, 1962. Questions of standing were resolved in McCarthy's favor. The F.B.I. "logs" of conversations in McCarthy's office were delivered to him for inspection by the court's order. *fn2" Cf. Mancusi v. DiForte, 392 U.S. 364, 88 S. Ct. 2120, 20 L. Ed. 2d 1154 (1968). The subject was explored, I believe, in more than ample detail. *fn3"

 The upshot is that McCarthy has failed to show any "taint" of the kind that might be thought helpful to him now. As a threshold matter (probably enough in itself to reveal the insubstantiality of the eavesdropping claim), it may be observed that McCarthy's papers are notably vague and sweeping in their purported answer to the court's question as to exactly what evidence is asserted to have been suppressible. When a measure of specificity is finally reached, it becomes slightly absurd; defendant's post-trial memorandum on this subject concludes (p. 24) with this sentence:

 
"The motion to suppress should be granted, the LM-30 report should be suppressed and the indictment dismissed."

 The "LM-30 report" is the document voluntarily delivered by McCarthy to the Secretary of Labor, and it is for omissions from this document that he stands convicted. There is no explanation (unless it be the apparent, and untenable, premise that a man subjected to unlawful eavesdropping acquires from this an immunity from prosecution) why such a document may or should be suppressed. But that, as has been mentioned, is about as close as defendant comes to specifying what things ought properly to be suppressed.

 The reason for this basic flaw is obvious from the record. The facts upon which McCarthy has been prosecuted and convicted were widely known, easily obtainable, and voluntarily conceded by him both in his discussions with Labor Department officials and upon the trial of this case. Rightly or wrongly, the record shows, McCarthy was for a long time suspected of corrupt and conflicted activities on both sides of the labor-management relationship. As matters stood in the last analysis, the single area of dispute in the present case was whether his failure to report the payments in issue could be justified by good-faith reliance upon the advice of counsel. There was no need to ferret out the kinds of secrets obtainable by illegal eavesdropping.

 And so, having seen the F.B.I. logs and having refrained from seeking the state materials, defendant is not able even to suggest with any plausible specificity what it is he wants suppressed. Having looked at the logs, I can understand this inability. But that is far less important than the fact that defendant himself has been shown to lack any target for his suppression theory.

 Beyond that, however, the record refutes the argument in its entirety. It is undisputed that McCarthy was the subject of illegal state wiretapping. I find, however, with no trace of doubt, that none of the information thus obtained, and none of the fruits thereof, ever came into the hands of the federal officers who conducted the investigation and prosecution of the instant case. *fn4" Similarly, having ruled in defendant's favor on preliminary issues of standing, and having found as a result that he met the initial burden of showing that the F.B.I. bug comprised an illegal intrusion of which he could complain, I am persuaded beyond a reasonable doubt *fn5" that no evidence here involved "'has been come at by exploitation of that illegality' * * *." Wong Sun v. United States, 371 U.S. 471, 488, 83 S. Ct. 407, 417, 9 L. Ed. 2d 441 (1963), quoting Maguire, Evidence of Guilt 221 (1959). It is again pertinent, of course, that defendant is unable to identify what evidence he claims to be suppressible. But apart from that, the record shows that the Labor Department investigation which "made" the present case was wholly independent of the F.B.I. eavesdropping; that the products of such eavesdropping were never given to the Labor investigators; and that fairly standard sources - mainly bank records, routine union reports, tax returns and volunteered information - were enough to account for the evidence upon which the conviction rests.

 II.

 A subject of lengthy study and discussion for counsel and the court was the question of whether, and to what extent, it might be a defense that McCarthy had relied upon the advice of counsel in the omissions from his report (payments from National Consultants Associated, Ltd.) which became the cause of his indictment and conviction. Over the strenuous, and not insubstantial, objections of the prosecution, the court concluded that such reliance - if generated and acted upon in good faith - would be a defense. Since the subject is no longer disputed, it is enough to recall that the conclusion turned upon the point that 29 U.S.C. § 439(b), in relevant part, punishes one who "knowingly fails to disclose a material fact;" that the notion ...


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