decided as amended september 22 1981.: August 27, 1981.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA D.C. Criminal No. 78-00312-03
Before Hunter and Sloviter, Circuit Judges, and Meanor,*fn* District Judge.
The key issue in this case is whether there is sufficient evidence to support the conviction of appellee, John ("Jack") Dixon, for aiding and abetting the bribery of Stephen B. Elko, Administrative Assistant to United States Representative Daniel J. Flood. 18 U.S.C. §§ 2, 201(b)(2) (1976). The district court granted a post-verdict motion acquitting appellee because it believed there was insufficient evidence to support the jury's verdict. After studying the record, we come to a different conclusion. We will, therefore, reverse the lower court's judgment and reinstate the verdict against appellee.
In October, 1979, appellee, Jack Dixon, was charged with seventeen counts of mail fraud, 18 U.S.C. § 1341 (1976), one count of bribery, 18 U.S.C. § 201(b) (2), and with aiding and abetting both the seventeen counts of mail fraud and the bribery violations, 18 U.S.C. § 2. He was tried with co-defendants, George L. Guerra and E. Wharton Shober, for his alleged participation in a scheme to pay Congressional Aide Stephen B. Elko for his efforts to secure a profitable hospital construction contract for companies in which appellee held an interest.
The evidence at trial revealed the following scheme: In August, 1971, Hahnemann Medical College and Hospital of Philadelphia ("Hahnemann") sought financing for the construction of additions to and renovations of its facilities. This project, known as the "Tower Project", was led by the new President of Hahnemann, E. Wharton Shober. In 1974, Hahnemann sought federal financial assistance for its project. Shober contacted the office of United States Congressman Daniel J. Flood and the hospital filed a grant application for $11,450,000. During this time, and until June, 1976, Stephen B. Elko served as Administrative Assistant to Congressman Flood; Congressman Flood was a member of the Appropriations Committee and Chairman of the Appropriations Subcommittee for Labor, Health, Education and Welfare and Related Agencies.*fn1
In order to "inspire his imagination" and insure the interest and assistance of Congressman Flood in Hahnemann's efforts to obtain federal funding, Elko suggested that Shober gather together a $10,000 campaign contribution for Flood. Appendix at 464A. Shober delivered approximately $8,500 to Elko between April, 1974 and November, 1974. After some legislative jostling, Hahnemann received its funds.
Elko's interest in the Hahnemann project was inspired, however, by more than the $10,000 contribution to Congressman Flood's campaign. During July and August of 1974, Elko also arranged, in return for a substantial fee, for his friends to secure work on the Tower project. He contacted Shober and told him that he had some companies that he wanted Hahnemann to consider employing for its project.*fn2 One of these companies was Environmental Design Center, Inc. ("EDCI") an architectural and engineering business formed by Jack Dixon, his attorney, Richard Fox, and his associate, Richard Spang.*fn3
In mid-July, 1974, Elko met with Jack Dixon, and Dixon's brother, Ed, at Jack's home in Frackville, Pennsylvania. Elko told the Dixons at that time about the Hahnemann Project and said that he and Congressman Flood could arrange to get EDCI involved in the project. Elko wanted to know what the Dixons could do for both him and the Congressman. Specifically, they discussed the split of engineering fees. The parties agreed to the following arrangement: the Dixons would together take four percent of any proceeds received by EDCI from Hahnemann; Elko would take another four percent. Elko told the Dixons that he would set up an appointment for the company's representative, Spang, with Shober at the hospital.*fn4
In July, 1974, Spang met with Jack Dixon at his home. Dixon informed Spang that there was a possibility that EDCI could get work at Hahnemann through Elko in Congressman Flood's office. Appendix at 814A. Shortly thereafter, Jack Dixon and Richard Spang met with Shober at the hospital.*fn5 After several conversations, EDCI submitted a proposal to the Hospital for a contract fee in excess of $1,000,000.
Later that month, in August, 1974, Elko met with Jack and Ed Dixon to discuss EDCI's contract price. Appellee reported to Elko that the Hospital wanted to cut down the price of the contract and complained that EDCI could not do the job for less money. Elko responded that the initial contract was to get their "foot in the door" and additional money could be earned from change orders or supplemental contracts in the future.
Heeding Elko's advice, Jack Dixon told EDCI's representative, Spang, that the Hospital could only go along with a contract fee in the range of $500,000; Spang submitted another proposal to the Hospital for this lower amount in September, 1974. Hahnemann, however, never formally agreed to this offer and by March of 1975, EDCI still did not have a contract with Hahnemann.
By this time, EDCI was falling into severe financial difficulties. Spang, therefore, contacted George Guerra (appellee's co-defendant at trial) to discuss the possibility of having Guerra's company, Capital Investment Development Corporation ("CIDC"), assume EDCI's negotiations with the Hospital. Spang explained to Guerra his relationship with Jack Dixon and Dixon's arrangements with Stephen Elko. Guerra agreed to have Spang run CIDC, while Spang continued to maintain his ownership interest in the essentially inactive EDCI.*fn6
As soon as Spang entered into this business arrangement with Guerra, he reported to Jack Dixon what had occurred. Within days of his discussion with Guerra, Spang met with Jack Dixon and Dixon's attorney, Richard Fox, at appellee's home. At that time, Dixon told Spang that when CIDC received a contract at Hahnemann certain payments would have to be made from the proceeds of the contract. Those payments, as related by Jack Dixon to Spang in early April, 1975, were as follows: 9.6% would be applied to pay off a bank loan; Jack and Ed Dixon would split equally 5% of the contract payments and Elko would receive 3% of the contract payments. The payments to the Dixons, Fox and Elko would continue for the life of CIDC's contract with the Hospital.
Spang reported to Guerra the breakdown of payments demanded by the appellee. Although Guerra thought that the amounts of the required payments were quite high, he accepted the arrangement.
Thus, by the second week of April, 1975, Elko was aware that CIDC, not EDCI should receive the contract from Hahnemann. At Jack Dixon's request, Elko arranged with Shober to meet with Guerra at the hospital. Elko telephoned Shober and told him that friends of Congressman Flood from an architectural and engineering firm named CIDC would be contacting him for an interview.
On April 23, 1975, Spang and Guerra met with Shober and Spang explained his working relationship with CIDC and Guerra. It was agreed that CIDC would submit a proposal to Hahnemann for services to the Hospital. After reviewing the unexecuted contract submitted by EDCI to the Hospital, Guerra submitted a CIDC proposal to Hahnemann. The parties went through six months of negotiations. During this period, Jack Dixon put pressure continually on Elko "to put the hammer on Shober." Appendix at 877A. At one point, Elko reminded Shober that CIDC was "the annointed pigeon" and that arrangements should be worked out for the company to get the contract. Guerra also made it clear to the Hospital that CIDC would not even bill Hahnemann unless the Hospital received its $14.5 million government grant.
Finally, on December 8, 1975, the Hahnemann Board of Trustees approved the hiring of CIDC as project monitor on the Tower Project for a fee of $835,000. Just three weeks earlier, Community Services Administration, an agency over which Congressman Flood's Appropriations Subcommittee had control, approved the release of.$2.5 million of the grant program to Hahnemann. It was at that time, on November 15, 1975, that Elko received his first payment pursuant to his agreement with Jack and Ed Dixon. Appendix at 594A. Ed Dixon delivered $1,500 in cash to Elko at Ed Dixon's home in Gilberton, Pennsylvania. Ed Dixon made a second payment in January, 1976.
In the Spring of 1976, Hahnemann amended its agreement with CIDC. The amendment resulted in CIDC receiving reduced payments for its March and April services, with full payment being contingent upon the successful completion of the Tower project. The attorney who prepared the amendment, Robert Tuteur, informed Elko of the revised CIDC payment schedule. Soon thereafter, Elko met with the appellee and his brother, asking "Where is my money that we agreed to?" Appendix at 592A. Appellee then met with Fox, Guerra and Spang to discuss the manner in which the remaining payments would be made. It was agreed that all arrangements would remain the same five percent to the Dixons and three percent to Elko and all payments would be funneled from Guerra through Fox for distribution.
In total, eight payments were delivered by Ed Dixon to Elko. They ended in July, 1978, shortly after Elko was indicted for an offense unrelated to the Hahnemann agreement.
Appellee was indicted, with co-defendants Guerra and Shober, in October, 1978. Guerra and Dixon, were charged with offenses relating to the kickback scheme to secure EDCI and CIDC contracts with the hospital. Shober was charged with bribing Elko and Flood to secure Hahnemann's federal grant for the Towers project. Count 18 of the Indictment, reprinted in Appendix at 50A. Guerra and Dixon were charged with offenses relating to the scheme to secure the engineering firms' contracts with Hahnemann. Counts 1 through 17 & 19 of the Indictment, reprinted in Appendix at 39A-51A. Although the Government acknowledged that the charge against Shober was a "different" bribery offense than that with which defendants Dixon and Guerra had been charged in Count 19, it introduced at trial, over defendants' objections, evidence relating to this count. The court permitted the introduction of this evidence after the Government promised that it could "tie up" the information into an overall, unified scheme involving all of the defendants.
The Government failed to fulfill its promise. After the Government concluded its case, the trial judge granted Shober's motion for acquittal. It subsequently granted all three defendants' motions for acquittal on remaining mail fraud counts. The trial court refused, however, to grant Guerra and Dixon's motions for acquittal on Count 19, the Elko-CIDC bribery charge.
The jury returned a verdict of guilty against both Dixon and Guerra on Count 19 of the indictment. Defendants each filed Motions for Judgment of Acquittal pursuant to Federal Rule of Criminal Procedure 29(c) and, in the alternative, a new trial, Fed.R.Crim.P. 33. The district court granted appellee's motion for post-verdict acquittal because it found that there was insufficient evidence "to allow the jury to speculate that John Dixon had aided and abetted in or was otherwise responsible for the future payments of money to Stephen Elko." Appendix at 24A. The court, although disturbed by the possibility of prosecutorial misconduct,*fn7 did not grant appellee's motion for a new trial because it found that the issue had been mooted by its ruling on the Rule 29(c) motion. The court expressly stated, however, that absent this ruling it would have granted appellee's motion for a new trial.*fn8
The Government appeals from the district court's judgment on Dixon's ...