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United States v. Chestnut

decided: March 8, 1976; As Amended May 11, 1976.


Appeal from a judgment of conviction of causing another to accept and receive an illegal corporate campaign contribution in violation of 18 U.S.C. §§ 610, 2, entered in the United States District Court for the Southern District of New York, Edward Weinfeld, Judge, after a jury trial. Affirmed.

Waterman, Oakes and Meskill, Circuit Judges.

Author: Meskill

MESKILL, Circuit Judge:

Jack L. Chestnut appeals from a judgment of conviction of causing another to accept and receive an illegal corporate campaign contribution in violation of 18 U.S.C. §§ 610, 2.*fn1 After a four day trial before Edward Weinfeld, District Judge, the jury returned a guilty verdict. On June 25, 1975, Chestnut was sentenced to four months in prison and fined $5,000.

Appellant Chestnut offers six arguments on this appeal: (1) that the language and circumstances of the indictment proved the prosecution to be ex post facto; (2) that the indictment failed to state an offense because the payment described was a lawful expenditure rather than a contribution; (3) that venue in the Southern District of New York was improper because every element of the questioned transaction except actual deposit of the checks occurred elsewhere; (4) that the evidence failed to prove beyond a reasonable doubt the willfulness element of the crime; (5) that allowing a government witness to offer an opinion as to the legality of a contribution was prejudicial error; (6), that, on its face and as applied, 18 U.S.C. § 610 was unconstitutionally vague and overbroad. Judge Weinfeld, thoroughly considering these contentions in his pretrial and post-trial opinions, United States v. Chestnut, 394 F. Supp. 581, 399 F. Supp. 1292 (S.D.N.Y.1975), concluded that they were without merit. We agree and affirm the judgment of conviction.

The Facts :

In mid-February, 1970, Jack L. Chestnut, a Minneapolis attorney, became manager of Hubert H. Humphrey's 1970 Senatorial campaign in Minnesota. At a meeting in that state, Chestnut sought the services of Campaign Planners, an entity created to handle the political advertising accounts of Lennen & Newell, Inc. ("L & N"), a now-defunct New York advertising agency. An agreement was reached several weeks later, after L & N mailed its written proposal to Chestnut. Payment was to be made to L & N in flat monthly fees which increased in size as the campaign progressed towards election day; in toto the Humphrey campaign planned to spend about $72,000 for L & N's services. Since L & N had no Minnesota offices, its representatives worked out of Chestnut's Minneapolis law office. Other campaign business was also conducted from the law firm's office, with Penny Miller, the law firm's office manager, and Jennifer Broome, secretary for the campaign, constituting the core of the campaign staff.

Associated Milk Producers, Inc. ("AMPI"), a cooperative organization of dairy farmers, collects from its members voluntary donations to a political fund, Trust Agricultural Political Education ("TAPE"), from which it lawfully can contribute to political campaigns. TAPE funds, totally segregated from AMPI funds, are dispensed from its own checking account. Representatives of AMPI had assured the Humphrey campaign of between $40,000 and $50,000 in contributions; Bob Lilly was the liaison between AMPI and the Humphrey campaign staff.

Lilly's testimony revealed the nature of AMPI's involvement in unlawful corporate political spending. After the 1968 presidential election, AMPI apparently became concerned about its standing with the new Republican administration. AMPI officials did not want the administration to be aware of contributions made to Democrats. Since TAPE's contributions had to be publicly reported, corporate officials decided to indirectly make donations by using corporate funds to reimburse AMPI employees who had made personal donations or by simply using corporate checks to make contributions.

With this background, we turn to the sequence of events which resulted in Chestnut's indictment. It appears that in the spring of 1970 AMPI's General Manager, Harold Nelson, asked Chestnut if there were any Humphrey campaign bills to be paid. The two men agreed that AMPI would pay $12,000 toward the Humphrey campaign's debt to L & N. Chestnut testified that it was his understanding that the contributions were to come from TAPE, AMPI's political arm. There was conflicting testimony as to how well financed the Humphrey forces were at this early stage of the campaign.

In accordance with Chestnut's instructions to bill AMPI, L & N sent one invoice charging AMPI $12,000 for "consulting fee[s] in Minnesota." In an episode never satisfactorally explained, Chestnut then called Lilly to inform him not to pay that invoice but to await a corrected bill which he, Chestnut, would forward; Chestnut confirmed these instructions by letter on May 7, 1970. Five days later AMPI received from Chestnut four L & N invoices, each in the amount of $3,000, made out to AMPI. Once again following Chestnut's written instructions, Lilly transmitted two AMPI checks to Chestnut's office; these checks clearly were drawn on the corporate account and payable to L & N. Although Chestnut's memory of subsequent events was unclear, he denied that he had ever seen the AMPI checks. Members of his office staff testified that, by their usual business procedures, they would have forwarded the checks to L & N without calling them to Chestnut's attention. Furthermore, the staff had been instructed that no corporate checks would be accepted as contributions. The checks from AMPI to L & N were deposited in L & N's New York bank and formed the basis of Chestnut's indictment.

At trial the government, over defense counsel's objection, introduced evidence of other suspect events for the limited purpose of showing similar conduct relevant to Chestnut's awareness of wrongdoing, i. e., the "willfulness" element of the crime. The government elicited testimony from Lilly, who appeared under a grant of immunity, that three other campaign contributions had been made: Lilly's personal check in the amount of $10,000 prior to the L & N payments; a remittance by Lilly of $1,450 by personal check pursuant to Chestnut's request; and $12,500 in cash which Lilly delivered to Chestnut late in the campaign. In addition, Chestnut's law firm received $5,000 indirectly from AMPI for legal services. AMPI paid this money to a third party on its payroll as a consultant, who then transferred it to Chestnut; the corporation later denied that Chestnut was one of its lawyers.

The government also questioned Penny Miller, Chestnut's office manager, about her testimony before the Grand Jury. At Chestnut's trial, there was evidence presented that Chestnut, after receiving legal advice that such action would be proper, authorized his staff to destroy financial records from the 1970 campaign. In her first appearance before the Grand Jury, Mrs. Miller refused to answer questions about this action. After receiving a grant of immunity the next day, Mrs. Miller testified about a conversation with Chestnut concerning the Senate Watergate investigation, in which conversation Chestnut had said that there was nothing damaging in the financial records, that they, meaning the Watergate Committee, could do him no harm via the records, but that his staff should get rid of them anyway. On the witness stand at Chestnut's trial, Mrs. Miller testified that the records were destroyed prior to the convening of the Watergate Committee.

The government also introduced handwriting exemplars taken by the F.B.I. in 1974 to compare with other samples of Chestnut's signature; a handwriting expert testified that although the two sets of signatures had been written by Chestnut, ...

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