Appeal from a judgment of conviction entered in the United States District Court for the Southern District of New York (Sweet, J.) for making a false material declaration under oath before a grand jury in violation of 18 U.S.C. § 1623. Reversed and remanded for a new trial.
Before: KAUFMAN, KEARSE, and PRATT, Circuit Judges.
Kenneth Valentine appeals from a judgment of conviction entered in the United States District Court for the Southern District of New York, Robert W. Sweet, Judge, for making a false material declaration under oath before a grand jury in violation of 18 U.S.C. § 1623, and from two orders denying post-trial motions for judgment of acquittal or, in the alternative, for a new trial. The principal issue on appeal is prosecutorial misconduct, specifically, whether the prosecutor presented his case in such an unfounded manner as to cause Valentine substantial prejudice and deprive him of a fair trial. Because our in camera review of the grand jury testimony of persons the government chose not to call as trial witnesses indicates that the prosecutor misrepresented, at least implicitly, the substance of the testimony of several grand jury witnesses, we reverse the judgment of conviction and remand for a new trial.
This case was a by-product of the government's grand jury investigation into possible violations of federal law arising from political contributions made by brokers employed by First Jersey Securities, Inc. ("First Jersey"), to Jeffrey Bell's 1982 campaign for the republican party nomination for United States senator from New Jersey. Because fifteen $1000 checks drawn on the account of Jamie Spangler, then manager of First Jersey's Rochester and Buffalo branch offices, were made payable to contributing brokers, including Valentine, the government suspected that the contributions were actually paid for with company funds as part of a conspiracy to defraud the United States.
At his first grand jury appearance on January 16, 1986, Valentine, then no longer employed by First Jersey, produced the check he wrote to the Bell campaign and his 1982 federal tax return, but denied that First Jersey had reimbursed him for his contribution. Valentine also testified that soon after making the contribution he received a form letter from Robert Brennan, then president of First Jersey and Bell's finance chairman, thanking Valentine for making the contribution and asking him to sign an acknowledgment appearing at the bottom of the letter. Valentine signed the acknowledgment, which stated that he had made the contribution voluntarily and from personal funds, and he testified to its veracity before the grand jury.
On April 17, 1986, Valentine again appeared before the grand jury and testified that his political contribution came from personal funds, that he had not been reimbursed for his contribution, and that he had received neither a gift nor a loan from Spangler with which to make the $1000 contribution.
Soon thereafter Valentine was charged with perjury in a two-count indictment. Count one, relating to Valentine's April 17 grand jury testimony, charged that he had made a false material declaration in stating that his campaign contribution was made from personal funds and in denying that Spangler had given him the $1000 with which to make the contribution. Count two, relating to his January 16 grand jury appearance, charged Valentine with perjury for denying the falsity of the acknowledgment he had signed on Brennan's form letter.
A superseding indictment was filed on June 11, 1986. Count one of that indictment, again relating to Valentine's April 17 appearance before the grand jury, set forth three specifications: specification one referred to the personal funds acknowledgment; specification two referred to Valentine's denial of having received a gift from Spangler (the "gift theory"); and specification three referred to his denial of having received a loan from Spangler (the "loan theory"). Count two was unchanged.
At the two-day trial, the government apparently chose a strategy of pursuing a conviction under the loan theory to the exclusion of the gift theory. The government introduced into evidence fifteen nearly sequentially numbered $1000 checks drawn on Spangler's personal account and made payable to brokers employed by First Jersey, and a chart listing the number, payee, date, and amount of each check. Moreover, the government called five of the fifteen check recipients as trial witnesses and elicited testimony describing how Spangler had called the brokers into his office one by one to solicit contributions for the Bell campaign. Supported by this evidence, the government contended there was a consistent pattern of loans made by Spangler to finance the contributions, and argued that because the five brokers who had been called as trial witnesses could recall the circumstances surrounding their loans from Spangler, Valentine, in testifying before the grand jury, also must have remembered receiving a $1000 loan from Spangler.
Valentine objected strenuously to the admission into evidence of nine of the checks because they were made payable to brokers whom the government would not call to testify at trial. Valentine argued that the government should not be permitted to imply that those nine checks also represented loans from Spangler without calling the payees as trial witnesses, particularly when the government might well know, through the brokers' grand jury testimony, precisely how they would characterize Spangler's payment. The basis of Valentine's argument was that those transcripts might constitute material, exculpatory evidence under Brady v. Maryland, 373 U.S. 83, 10 L. Ed. 2d 215, 83 S. Ct. 1194 (1963), and might therefore show that the government had no good faith basis to opt exclusively for the consistent-pattern-of-loans theory of culpability.
Although Judge Sweet admitted all the checks into evidence after weighing their probative value against the danger of unfair prejudice under Fed. R. Evid. 403, Valentine did succeed in persuading Judge Sweet to order, in light of the government's trial strategy, that transcripts of the grand jury testimony of brokers who had not been called as trial witnesses be filed under seal with the district court. For some reasons those transcripts were not actually filed below; however, after a request by this panel during oral argument, the government has filed them with this court and we have reviewed them.
The only evidence admitted at trial that related directly to Valentine was his grand jury testimony, Spangler's check to him, his check to the Bell campaign, the form letter from Brennan containing Valentine's signed acknowledgment, and a Bell campaign record showing receipt of Valentine's contribution.
At the close of the government's case, Valentine moved to dismiss both the loan and gift theory specifications, arguing that they were inherently inconsistent and that the government had presented contradictory evidence. In response to this motion, the government attempted to reconcile the two specifications by arguing that the term "give" as used in the grand jury testimony and the superseding indictment meant "convey" or "transfer" as opposed to "gift". Rejecting this argument as being contrary to the context in which the term was used in the grand jury, Judge Sweet ruled there was insufficient evidence to support ...