The opinion of the court was delivered by: GREEN
A forty-four count indictment charged defendants Peter J. Camiel, Vincent J. Fumo, Thomas M. Nolan and Vincent F. Scarcelli with violating the federal mail fraud statute, 18 U.S.C. § 1341.
At times relevant to the indictment Mr. Camiel was Chairman of Philadelphia Democratic County Executive Committee ("City Committee"); Mr. Fumo was his assistant in charge of patronage; Mr. Nolan was Majority Leader of the Pennsylvania Senate and in charge of the Senate Special Leadership Account ("Senate Payroll") and Mr. Scarcelli was Chief Clerk of the Pennsylvania House of Representatives and in charge of the House Per Diem Account and the House Staff Salary Account ("House payrolls"). The indictment alleged that defendants, together with others known and unknown including Henry J. Cianfrani, then a state senator from Philadelphia, and Martin Weinberg,1a Mr. Camiel's successor as Chairman of City Committee, participated in a scheme to defraud the Commonwealth of Pennsylvania and its citizens by placing Democratic Party loyalists as "no show" employees on the Senate payroll and the House payrolls and paying them even though they did no work for the Pennsylvania legislature. After a four week trial, a jury convicted Mr. Nolan on thirty-two counts, Mr. Fumo on fifteen counts and Mr. Camiel on eleven counts but acquitted him on two counts.
At the conclusion of all the evidence, defendants moved, pursuant to Fed.R.Crim.P. 29, for a judgment of acquittal; I reserved decision on these motions. After the jury returned its verdict, the defendants filed post-trial motions, seeking alternatively judgment of acquittal, arrest of judgment or a new trial. Both sets of motions are now before me. For the reasons discussed below, I will enter judgments of acquittal on behalf of defendants Camiel, Fumo and Nolan.
In one motion or another, each of the defendants has argued that because there is a material variance between the allegations of the indictment and the proof at trial I must grant either a judgment of acquittal or a new trial.
All of the defendants have maintained throughout the proceedings in this case that they were not involved in any scheme to defraud, and that the government could not prove and in fact did not prove their participation in any fraudulent or unlawful scheme. However, the defendants have argued, in the alternative, that if the government proved any scheme it was not the scheme described in the indictment.
The indictment alleged that defendants and other unindicted co-schemers participated in a single mail fraud scheme existing from December, 1974 to December, 1978 and involving both the Senate payroll, supervised by Mr. Nolan, and the House payrolls, supervised by Mr. Scarcelli. In pre-trial motions for severance and for relief from prejudicial joinder, all of the defendants, except Mr. Fumo, challenged the government's contention of a single scheme. In subsequent motions, they have continued their attack on the single scheme theory.
From the outset, it has been the position of the defendants that political and personal differences existing among the alleged co-schemers made their participation in a single scheme unthinkable and impossible. It is undisputed that during the period covered by the indictment, 1974 to 1978, Mr. Camiel and his then protege, Vincent Fumo, were engaged in a bitter political feud with alleged co-schemers, Messrs. Cianfrani and Weinberg, who were partisans of former Philadelphia Mayor Frank Rizzo. In May, 1976, Martin Weinberg, the candidate of Mayor Rizzo, defeated Mr. Camiel in his bid for re-election as Chairman of City Committee. By June 30, 1976, Messrs. Camiel and Fumo, while remaining Democratic Ward Leaders, had lost their positions and their power at City Committee. Evidence produced at the trial also suggested that Mr. Nolan and Mr. Fumo were unlikely allies. When Nolan took over as Senate Majority Leader in 1975, he fired Mr. Fumo from a position he had held on the Majority Leader's staff.
Given these circumstances, defendants argue that a unitary scheme among these participants was impossible. In their view, if there were any scheme at all, and they deny that there was, there were at least two: a Camiel-era scheme, lasting from December, 1974 to June 30, 1976, and a Weinberg-era scheme, existing from June 30, 1976 to December 31, 1978. In addition, the defendants contend that since the government did not produce any evidence connecting the Senate payroll of Senator Nolan with the House payrolls of Chief Clerk Scarcelli, there were probably four schemes: A Camiel-era scheme in the Senate and one in the House as well as a Weinberg-era scheme in the Senate and one in the House.
It is the defendants' contention that the evidence produced at trial by the government in fact supported their theory of multiple schemes. Mr. Camiel has described this evidence as follows. By June 30, 1976, the five employees
on the Senate payroll recommended by City Committee during Camiel's tenure had been removed at the direction of Senator Cinfrani. For nearly two months, with the exception of Ann Moss, who was sponsored by Henry Cianfrani, City Committee did not recommend people to Senator Nolan for employment. On or about August 16, 1976, Mary Jane Starry, administrative aide to Senator Nolan, met with Messrs. Cianfrani and Weinberg to discuss people to be placed on the Senate payroll. Thereafter, four of the five people dropped from the payroll on June 30, 1976, were restored and a number of new people,
recommended by Weinberg and Cianfrani, were placed on the payroll. Mr. Camiel argues that this evidence confirmed the termination of one scheme and the commencement of another.
Defendants contend there is no evidence to support a finding of the scheme alleged and also that they have been prejudiced substantially because the variance between the single scheme alleged and the multiple schemes revealed by the evidence caused a "spill-over" of evidence.
That is, in attempting to prove the single scheme, the government presented overlapping evidence of several different but similar schemes. Such evidence, it is argued, confused the jury so that it could not separate out which evidence applied to which defendant. Mr. Camiel argues that the government's refusal to present the evidence in chronological order further exacerbated the problem.
In its response, the government does not address the issue of prejudice because it maintains that its evidence at trial proved the scheme alleged in the indictment. Drawing on principles of conspiracy law,
the government has compared this mail fraud scheme to a wheel conspiracy, with City Committee at its hub. It concedes that not all participants were in the scheme throughout its four year life nor were they necessarily aware of each other's participation. For example, by the government's own account unindicted co-schemers, Henry Cianfrani and Martin Weinberg, did not join the scheme until after Mr. Camiel was ousted from the Chairmanship of City Committee in May, 1976.
Similarly, there is no evidence that Mr. Nolan in the Pennsylvania Senate and Mr. Scarcelli in the House of Representatives were aware of one another's activities. Nonetheless, the United States argues that there was a single scheme with City Committee at the center and the various participants united by a common goal: the aggrandizement of their own political power by rewarding Democratic loyalists with "no show" jobs with the Pennsylvania General Assembly.
My analysis of the variance issue presented here properly begins with Kotteakos v. United States, 328 U.S. 750, 66 S. Ct. 1239, 90 L. Ed. 1557 (1946). In Kotteakos, the Supreme Court reversed the convictions of appellants for violations of the general federal conspiracy statute and certain provisions of the National Housing Act. The indictment alleged a single conspiracy involving thirty-six co-conspirators who shared a common purpose: to obtain loans from the Federal Housing Administration (FHA) by submitting loan applications containing false and fraudulent information. The only individual common to all the fraudulent transactions proved at trial was one Simon Brown. Mr. Brown acted as a broker to the others, assisting them in making false and fraudulent applications for FHA loans. By the time the case reached the Supreme Court on appeal, the United States was willing to concede that the evidence showed a number of distinct conspiracies rather than the single conspiracy charged. Nonetheless, it argued that the variance amounted to harmless error, not requiring a reversal of the defendants' convictions. The Supreme Court disagreed, finding that the variance prejudiced the "substantial rights" of the appellants "... not to be tried en masse for the conglomeration of distinct and separate offenses committed by others..." 66 S. Ct. at 1253. The Court was concerned with the "spillover" of evidence from one conspiracy to another and a jury's tendency to transfer the guilt of a person involved in one conspiracy to another involved in an unrelated conspiracy, the very issue raised by defendants in the instant case.
Kotteakos and the line of cases following it teach that analysis of a variance question requires a two step inquiry: (1) is there in fact a variance and (2) if so, did it prejudice a substantial right of the defendant. I find that there is a variance between the allegations of the indictment and the evidence produced at the trial in this case. The United States has likened this mail fraud scheme to a "hub" or wheel conspiracy. This type of conspiracy is based, as the name suggests, on a wheel metaphor. At the hub or core is a group or individual who has agreements or transactions with other groups or individuals, unrelated to each other, the so-called spokes of the wheel. A wheel conspiracy must have a "rim" which binds the "hub" and "spokes" into a single conspiracy. In the instant case, the government has identified City Committee as the hub of the mail fraud scheme and the payrolls in the Senate and House as well as the shifting leadership of City Committee as the spokes. The rim or binding force of the scheme, according to the United States, was the common goal of the co-schemers: to increase their political power by rewarding Democratic Party loyalists with "no show" jobs on Pennsylvania legislative payrolls.
Given the evidence of record, however, the government has failed to prove its theory of a single, multi-participant mail fraud scheme similar to a hub conspiracy. The first problem is the government's failure to identify a group or individual who served as the hub or core of the scheme. By the prosecution's own account, none of the major participants in the scheme were at the center of the scheme throughout its existence. Messrs. Cianfrani and Weinberg did not join the scheme until after the ouster of their political opponent, Peter J. Camiel, as Chairman of City Committee. According to the government, after being deposed as Chairman, Mr. Camiel remained in the scheme only as a "bit player" and because he failed to take affirmative steps to withdraw. Only defendants Nolan, Scarcelli and Fumo allegedly participated in the scheme throughout its four year existence; however, none of them could be described as the hub, and the government has never suggested any of them for this part. There is no evidence, and the government has never argued, that Mr. Nolan as Senate Majority Leader in charge of the Senate payroll and Mr. Scarcelli as Chief Clerk of the Pennsylvania House of Representatives in charge of the House payrolls were even aware of each other's participation in a common scheme to place "no show" employees on legislative payrolls. As for Mr. Fumo, while he was charged with participating in the scheme as it related to both the Pennsylvania House and Senate and both before and after June 30, 1976, the government has never suggested that he served as the hub of the scheme. Mr. Fumo was a political ally of Peter Camiel and acted as his patronage chief until Mr. Camiel lost his position as Chairman in May, 1976. After June, 1976, Mr. Fumo had no position or power at City Committee; he remained active in the scheme only in his role as Democratic Ward Leader of Philadelphia Ward 39A.
The government apparently recognizes that there is no one individual or group of individuals who can be said to have been the hub of this mail fraud scheme. Adopting some language I used during a hearing on one of the motions in this case, the United States contends that City Committee as an institution was the hub. In my view, however, this theory is seriously flawed. First, the government has not cited nor am I independently aware of any case which holds that an organization qua institution, rather than as a collection of particular individuals, can serve as the hub of a conspiracy. However, assuming arguendo that an organization such as City Committee could serve that function, the government has not produced sufficient evidence to prove an institutional conspiracy in this case. In my view, to establish a conspiracy centered not on an individual or group of individuals but on an organizational entity, a longstanding involvement by the organization in the conspiracy must be shown. Here, there has not been a showing, indeed it is not even alleged, that persisting over a number of years through a succession of chairmanships City Committee was the nucleus of a scheme to place "no show" employees on legislative payrolls. Rather, the scheme as alleged in the indictment was limited to a four year period and involved only part of the chairmanships of Peter Camiel and Martin Weinberg.
Accordingly, the supposed wheel conspiracy in this case lacks a hub.
Similarly, there is no "rim" binding the spokes together into one scheme. It is the government's contention that the common goal of the co-schemers of attempting to increase their political power by rewarding their supporters with "no show" jobs provided this conspiracy with a "rim."
Given the evidence of political and personal enmity existing among those who have been identified as the principal co-schemers, the claim that they shared a common goal and were involved in a common endeavor lacks supports. While it seems highly probable that as politicians each of these individuals was interested in increasing and consolidating his personal political power, it does not follow that their interests were congruent or even complementary. Indeed, the political ambitions and aims of Messrs. Camiel and Fumo on the one hand and Messrs. Cianfrani and Weinberg on the other were diametrically opposed. Mr. Camiel may have sought to consolidate his power by offering patronage jobs to his supporters. However, because he was engaged in a struggle with former Mayor Rizzo for control of the Democratic Party in Philadelphia, the undisputed evidence reveals that his goal was at cross purposes with the aims of Cianfrani and Weinberg, who were allies of Mayor Rizzo. That Camiel, Fumo, Nolan, Weinberg, Cianfrani and Scarcelli shared an interest in political power or even that each had used "no show" jobs with the Pennsylvania legislature as a means of increasing his power does not prove that they acted as co-schemers in the single scheme alleged.
Generally, the determination of the number of conspiracies involved is a fact question for the jury. United States v. Varelli, 407 F.2d 735, 746 (7th Cir. 1969), cert. denied 405 U.S. 1040, 92 S. Ct. 1311, 31 L. Ed. 2d 581 (1972). However, if, viewing the evidence in the light most favorable to the government, there is not substantial evidence of a single conspiracy, I cannot uphold the jury verdict. United States v. Palmeri, 630 F.2d 192, 203 (3d Cir. 1980). I instructed the jury that they could not find the defendants guilty unless they found the government had proven beyond a reasonable doubt the single scheme stated in the indictment. Apparently, the jury found the government had carried its burden. However, viewing the record in the light most favorable to the United States, I find that this determination is not supported by substantial evidence.
Having determined that there was a variance between the allegations of the indictment and the evidence produced at trial, I turn now to the question of whether any "substantial rights" of the defendants were prejudiced by this variance. Defendants contend that the prejudice in this case derived from the "spillover of evidence" from one scheme to another. It is their position that given the number of witnesses, the large amount of evidence, the similarities between the schemes and the government's claim of a unified scheme, the jury could not ...