decided: December 11, 1974.
Appeal from order of Court of Common Pleas, Trial Division, of Philadelphia, Jan. T., 1972, Nos. 1371 and 1372, in case of Commonwealth of Pennsylvania v. Patrick McLaughlin.
Steven H. Goldblatt, Assistant District Attorney, with him Esther R. Sylvester and Deborah E. Glass, Assistant District Attorneys, and F. Emmett Fitzpatrick, District Attorney, for Commonwealth, appellant.
John Rogers Carroll, with him Robert E. Gabriel, for appellee.
Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Cercone, J. Jacobs, J., dissents. Dissenting Opinion by Price, J.
[ 231 Pa. Super. Page 130]
Appellee, Patrick McLaughlin, worked under contract with the City of Philadelphia as a lobbyist in Washington, D. C. The contract specified a yearly salary of $20,000 plus expenses not to exceed $5,000. Pursuant to this arrangement, appellee submitted expense vouchers to the City for reimbursement. These vouchers were reviewed and, if deemed proper, paid by the City Controller's Office.
[ 231 Pa. Super. Page 131]
In his capacity as first Deputy Controller, Gilbert Stein, initiated an investigation into certain allegedly false expense statements that had been submitted to the City by appellee in 1971. As a result of this investigation, a report was prepared and submitted to the City Controller. This report summarized Mr. Stein's investigation activities and detailed his belief that certain expense statements and vouchers submitted by Mr. McLaughlin were false. The report recommended that Mr. McLaughlin be "subpoenaed" and questioned under oath "to get an explanation, if any, for all findings," and "unless satisfactorily explained, [to] turn the findings over to District Attorney with a recommendation for prosecution."
Subsequently, appellee was subpoenaed by the City Controller, pursuant to the subpoena power granted to the Controller under the City Charter. This administrative subpoena, so called, in fact carried little clout. The only penalty provided for non-appearance was disallowance of submitted expenses for reimbursement by the city. Insofar as the Controller's Office was concerned, a failure to appear under subpoena constituted a failure of a condition precedent to the contractor's right to receive reimbursement for expenditures made in furtherance of the city's business. Thus, when McLaughlin was subpoenaed to appear and explain the allegedly falsified vouchers, he could have ignored the request and suffered only the loss of bona fide expenditures made on the city's behalf.*fn1
McLaughlin appeared, however, and answered questions put to him by Mr. Stein and recorded by a
[ 231 Pa. Super. Page 132]
stenographer. His attempted explanation was both ambiguous and contradictory and, therefore, wholly unsatisfactory. Thereafter the entire matter was referred to the District Attorney's office which initiated prosecution. A preliminary hearing was held following which McLaughlin was indicted for numerous offenses of fraud against the City of Philadelphia.
McLaughlin subsequently filed a motion with the Philadelphia County Court of Common Pleas to suppress his statements made to Mr. Stein because Mr. Stein had not provided Miranda warnings. Following a hearing and submission of briefs, this motion was granted. In granting the motion, the trial judge found that appellee did not "knowingly and willingly waive his constitutional rights." The Commonwealth appeals from this decision.*fn2
The Commonwealth urges that the lower court erred in suppressing McLaughlin's statements because Mr. Stein did not give him Miranda warnings prior to interrogating him. In its well-written brief the Commonwealth refers us to an impressive array of federal cases which have held, with the exception of the Seventh Circuit,*fn3 that under similar circumstances Miranda warnings were not required.
In United States v. Jaskiewicz,*fn4 for example, the Third Circuit confronted a situation where a known,
[ 231 Pa. Super. Page 133]
professional gambler raised the Miranda issue with regard to interrogations by the Internal Revenue Service. In particular, the appellant therein argued that he was entitled to Miranda warnings once he had become the focus of a criminal investigation. In holding that Miranda warnings were not required, the Third Circuit stated: "The issue is not whether or not the Fifth Amendment applies in a non-custodial setting. It is whether or not the affirmative duties imposed upon governmental agencies by Miranda arise by virtue of the defendant's being a potential target of an indictment, or arise by virtue of the fact that a governmental agency has in some meaningful way subjected him to physical, or perhaps psychological, restraint.
"Undoubtedly there is some degree of compulsion upon a taxpayer to cooperate with the Internal Revenue Service merely from the fact that civil remedies exist for the enforcement and collection of taxes. Undoubtedly that psychological compulsion increases somewhat when a taxpayer is made aware of possible criminal sanctions. But the compulsion to attempt to avoid criminal sanctions by testimony is not such as to violate the Fifth Amendment . . . and in any event the standards for weighing such non-custodial compulsions are not those of Miranda. Rather, they are those discussed in United States v. Kordel, 397 U.S. 1, 90 S. Ct. 763, 25 L. Ed. 2d 1 (1970), and De Vita v. Sills, 422 F.2d 1172 (3d Cir. 1970).
"In short, [ Miranda ] does not require that this court in this case depart from its pre- Miranda rule that the sole test for admissibility of a taxpayer's statements to agents of the Treasury Department is the voluntariness of the statements. United States v. Frank, 245 F.2d 284 (3d Cir.), cert. denied, 355 U.S. 819, 78 S. Ct. 25, 2 L. Ed. 2d 35 (1957); United States v. Burdick, 214 F.2d 768, 773 (3d Cir. 1954), cert. denied, 350
[ 231 Pa. Super. Page 134]
U.S. 831, 76 S. Ct. 65, 100 L. Ed. 742 (1955)." Id. at 419-20.
Thus, in nine of the federal circuit courts,*fn5 the mere fact that a criminal investigation has focused on an individual does not require that the interrogating government officials give him Miranda warnings. In those circuits the policy underlying that conclusion is eminently clear: "We cannot agree that every administrative official who confronts a citizen with a request for information that might disclose criminal conduct, thereby exerts a compulsion on the citizen that must be dispelled by the Miranda placebo. In today's vast and complex network of widespread daily administrative contacts between citizens and government officials, such a holding would open a veritable Pandora's box." United States v. Prudden, 424 F.2d at 1028. Furthermore, the courts' conclusions are not altered by the fact that the inquiry was part of an investigation which "was one with dominant criminal overtones. . . ." United States v. Prudden, 424 F.2d at 1031. Thus, the general rule is that interrogations by federal officers do not require the provision of Miranda warnings, absent custody or some other form of compulsion.*fn6 This rule obtains even though the interrogation
[ 231 Pa. Super. Page 135]
was conducted at the offices of a government agent after the accused became the focus of a criminal investigation. See Annotation, 31 A.L.R.3d 565 (1970).
If this were the law in Pennsylvania, at this point we would now turn to the facts of the instant case and determine whether the necessary incidents of custody or coercion were present in Stein's interrogation of McLaughlin.*fn7 However, the Supreme Court of Pennsylvania has not read Miranda to require a custodial interrogation as a condition precedent to its application. Instead in Commonwealth v. Feldman, 432 Pa. 428, 432 (1968), Justice Roberts stated in an opinion joined by two other justices*fn8 that: "From reading Escobedo and Miranda together it becomes clear that whenever an individual is questioned while in custody or while the object of an investigation of which he is the focus, before any questioning begins the individual must be given the warnings established in Miranda." Because of the equal division of the participating justices concerning the proper ratio decidendi in Feldman, doubt existed concerning the vitality of the rationale propounded by Justice Roberts. This doubt cleared when the Court next had the opportunity to consider whether Miranda appertains to non-custodial interrogations. In Commonwealth v. D'Nicuola, 448 Pa. 54 (1972), the Court considered the admissibility of statements made by a suspect while he was hospitalized after an apparent suicide attempt. Therein, the Court
[ 231 Pa. Super. Page 136]
stated, per Justice Nix: "When previously confronted with this issue of whether a 'custodial interrogation' had taken place, we conclusively established that 'whenever an individual is questioned while in custody or while the object of an investigation of which he is the focus, before any questioning begins the individual must be given the warnings established in Miranda." Id. at 57. See also Commonwealth v. Yount, 455 Pa. 303, 308 (1974). Although the Court did not decide in D'Nicuola that the hospital interrogation was non-custodial, its determination that questioning took place without Miranda warnings after a criminal investigation had focused on the accused, rendered unnecessary any conclusion concerning the custodial nature of the interrogation.
Hence, under the law espoused by the Supreme Court of this Commonwealth, there need be no custodial interrogation so long as the interrogation takes place adjunctive to a criminal investigation of which the accused is the focus.*fn9
[ 231 Pa. Super. Page 137]
Since the investigation clearly had focused on McLaughlin, we turn to the question of whether the interrogation of McLaughlin herein was part of a criminal investigation. First, it is certainly true that the City Controller's Office is not a branch of the government ordinarily engaged in investigating criminal conduct. However, the policy of the Controller's Office did require that, in a proper case, evidence that it gathered which indicated that the city had been victimized by criminal acts should be turned over to the District Attorney's office for prosecution. In fact, prior to becoming Deputy Controller, Mr. Stein had worked in the District Attorney's office. Combined with Mr. Stein's stated intention of recommending prosecution by the District Attorney's office unless McLaughlin somehow satisfactorily explained the inconsistencies in his vouchers, the facts compel the conclusion that McLaughlin was the focus of at least an incipient criminal investigation. As the United States Supreme Court stated in the Mathis Case, supra note 6: "It is true that a 'routine tax investigation' may be initiated for the purpose of a civil action rather than criminal prosecution. To this extent tax investigations differ from investigations of murder, robbery, and other crimes. But tax investigations frequently lead to criminal prosecutions, just as the one here did. In fact, the last visit of the revenue agent to the jail to question petitioner took place only eight days before the full-fledged criminal investigation concededly began. And as the investigating revenue agent was compelled to admit, there was always the possibility during his investigation that his work would end up in a criminal prosecution. We reject the contention that tax investigations are immune from the Miranda
[ 231 Pa. Super. Page 138]
requirements for warnings to be given a person in custody." 391 U.S. at 4. Therefore, even though an investigation begins with only the potential to develop into a criminal prosecution, and is conducted by agents not directly involved in criminal prosecutions, Miranda warnings may be required.*fn10
The extensive questioning of McLaughlin by Mr. Stein was certainly police conduct, insofar as it was indisputably likely to evoke admissions which would be included with the other evidence against McLaughlin when it was delivered to the District Attorney's office. It was, therefore, an interrogation of McLaughlin as part of a criminal investigation of which he was the focus despite the fact that it was conducted by a government agency not ordinarily involved in criminal investigations. The questioning therefore fell within the purview of Miranda and Escobedo as they have been interpreted by our Supreme Court.*fn11
The conclusion we reach will not negatively affect the Controller's Office in performing their duty of ferreting out falsified expense vouchers. Nor do we see that the Controller's Office will be required to give Miranda warnings in the vast majority of their investigations. Indeed, so long as they only use statements so taken to determine the propriety of paying particular, claimed expenses, no warnings need be given. The warnings are only necessary when the statements are to be offered in a criminal prosecution of a city
[ 231 Pa. Super. Page 139]
contractor or employee -- a task not within the ambit of the City Controller's duties.*fn12
Dissenting Opinion by Price, J.:
I agree with the majority opinion in all but its conclusion that this investigation is a part of a criminal investigation. Since I would conclude the investigation here discussed to be non-criminal in its scope and purpose, I would not require the Miranda warnings.
Accordingly, I would reverse the order of the lower court.