The opinion of the court was delivered by: HUYETT
This case presents the important question whether the Federal Government may prosecute an individual for crimes relating to a transaction which was the subject matter of his compelled testimony before a state grand jury under grant of full transactional immunity. Defendants Chenoweth, Schott, and Womack, indicted under 18 U.S.C. §§ 1341, 1342, 2, and 371, have moved to dismiss the indictments for two reasons. Initially they contend that their testimony before a state grand jury under grant of transactional immunity bars the Federal Government from pursuing the instant prosecution. Alternatively they suggest that even if the instant indictments are not barred by the state grant of immunity, they nevertheless must fail since the Federal Government has not met its burden of proving that it made neither direct nor indirect use of defendants' compelled state testimony as a foundation for these indictments.
On August 18, 1970, defendants Schott and Womack appeared before the Grand Jury of Hillsborough County, Florida, pursuant to subpoenas issued by the Circuit Court of Hillsborough County. When asked to testify concerning transactions between Hillsborough County and Shoup Voting Machine Corporation (Shoup) involving the purchase and sale of new and used voting machines, defendants invoked their privilege against self-incrimination. The State Attorney in charge of the investigation then advised defendants that they were granted immunity from prosecution under Florida Statute
and, therefore, compelled to testify. Defendants, thereafter, did so testify.
The Report of the Hillsborough County Grand Jury, Spring Term-1970, (Exhibit D-4) was filed on August 26, 1970 in the Minute Books in the Office of the Clerk of the Court of Hillsborough County. The report concluded that the voting machine transactions under investigation resulted in tremendous financial loss to Hillsborough County but that lack of specific evidence prevented a finding as to those persons directly responsible.
The report did not specifically mention Schott and Womack by name, but summarized testimony of the "Executive Vice President of Shoup" and the "President of Southern Municipal Sales, Inc." which is the "Florida Sales Representative of Shoup". Although the Tampa, Florida newspapers covered the Hillsborough County Grand Jury Investigation and the final report extensively, a transcript of the testimony was never made public.
At the evidentiary hearing held in connection with the instant motions on January 3 and 4, 1972, the Federal Government undertook to satisfy the Court that neither direct nor indirect usage was made of defendants' Hillsborough County Grand Jury testimony. To satisfy this burden the Government endeavored to trace the history of the federal investigation of Shoup to demonstrate that it used completely independent sources of evidence in obtaining these indictments.
Testimony elicited from Government witnesses at the hearing indicates that the federal investigation of Shoup evolved from a routine audit of Philadelphia labor unions by the Department of Labor under the auspices of the Department of Justice Strike Force sometime in 1970. One labor union was found to have made a loan initially of $300,000 and later raised to $400,000 to a certain woman. In the course of its investigation the Department of Labor found that this woman was periodically receiving large sums of money from Shoup, depositing them into a bank account, and simultaneously withdrawing approximately half to two-thirds of the money in cash. Since this circumstance suggested to the Strike Force the possibility of interstate bribery in connection with Shoup municipal sales, further investigation of Shoup was undertaken.
Thereafter, in January, 1971 a large volume of Shoup books and records was subpoenaed by the federal grand jury. These records included cancelled checks and records of contracts for commission work around the country. Special agents of the Strike Force assigned to work with the grand jury then constructed a list of between 150 and 200 payees of large amounts of money that did not seem satisfactorily explained. In April and May, 1971, personnel were dispatched around the country to interview the various payees concerning the circumstances of the payments.
John Conway, investigator for the Immigration Service, and Christopher Kelly, Compliance Officer for the Department of Labor, were the Philadelphia Strike Force personnel primarily responsible for the Florida portion of the investigation. On or about April 27, 1971, Kelly and Conway commenced their Florida investigation in Jacksonville. Their list of large payees compiled from the subpoenaed Shoup records included defendants Womack and Southern Municipal Sales, Inc. (Southern Municipal). On April 28 and 29 a check of state records revealed that Southern Municipal was a Florida corporation with a Daytona Beach address and defendant Womack was its president. When contacted by telephone, Womack advised that he desired to cooperate but that he wanted to have his attorney present. Since his attorney lived in Georgia and Kelly and Conway had limited time, an interview could not be arranged.
Kelly and Conway next spent several days investigating in the Miami area. Their reports, however, prepared shortly after the trip, do not indicate that anything was uncovered in Miami that would be relevant to defendants' instant motions.
Thereafter, Kelly and Conway were in Tampa, Hillsborough County, Florida from approximately May 3 to May 12, 1971. They admitted spending several hours reading articles about the Hillsborough County probe of Shoup in the clip files of the Tampa Tribune and Tampa Times.
The Tampa press apparently covered the Hillsborough County Shoup investigation rather extensively. Consequently, the newspaper articles discussing the defendants which may have come to the attention of Kelly and Conway have been scrutinized. That portion of the Report of the Hillsborough County ...