Seitz, Chief Judge; Gibbons and Rosenn, Circuit Judges. Rosenn, concurring and dissenting.
Harry P. Jannotti and George X. Schwartz appeal sentences imposed after their convictions for conspiring to violate the Hobbs Act, 18 U.S.C. § 1951(a) (1976), and, in the case of defendant Schwartz, the Racketeer Influenced and Corrupt Organization Act ("RICO Act"), 18 U.S.C. § 1962(d) (1976). This court has jurisdiction under 28 U.S.C. § 1291.
Defendants are former members of the Philadelphia City Council. They were tried together on charges of conspiring to interfere with interstate commerce, in violation of the Hobbs Act, 18 U.S.C. § 1951(a), and conspiring to conduct an enterprise through racketeering activities, in violation of the RICO Act, 18 U.S.C. § 1962(d). The indictment charged that the conspiracies existed for approximately three weeks, from about January 11, 1980, to about February 2, 1980. The jury found that Schwartz was guilty on both counts, and that Jannotti was guilty on the Hobbs Act count and innocent on the RICO count.
The district court, however, granted defendants' motions to set aside the guilty verdicts in their entirety, dismissed the Hobbs Act counts for lack of jurisdiction, and entered judgments of acquittal. 501 F. Supp. 1182. The government appealed these orders and judgments, and this court, sitting in banc, reversed and ordered reinstatement of the jury's verdicts. 673 F.2d 578, (3d Cir. 1982) cert. denied, 457 U.S. 1106, 102 S. Ct. 2906, 73 L. Ed. 2d 1315 (1982). The district court reinstated the verdicts and imposed sentences.
A brief statement of the facts of this case will assist in understanding the issues presented in this appeal. A more complete statement of the facts is found in this court's in banc decision. See 673 F.2d 578, cert. denied, 457 U.S. 1106, 102 S. Ct. 2906, 73 L. Ed. 2d 1315 (1982). Schwartz's and Jannotti's indictments resulted from the FBI's so-called "ABSCAM" investigation of political corruption. The central device in this "sting" investigation was the creation of an elaborate scheme in which FBI undercover agents pretended to represent the interests of a fictitious Arab sheik seeking to immigrate to this country and to construct a large hotel in Philadelphia.
Undercover FBI agents, posing as representatives of the sheik, came to Philadelphia in January 1980 to seek out city officials who would promise political favors in exchange for cash. Specifically, the agents sought help from some members of the Philadelphia City Council on such matters as zoning and building permits. The agents had previously met with Howard Criden, a Philadelphia lawyer, and through Criden they met in January with Schwartz, Jannotti, and Louis Johanson, all members of the City Council.*fn1 At these meetings the defendants and Johanson accepted cash payments and made promises of political assistance to the sheik on matters before the city council. All of these meetings took place at the Barclay Hotel in Philadelphia, where the agents had set up audio and video tape equipment to record the conversations surreptitiously. Telephone conversations were also recorded. These audio and video tapes played a crucial role in the prosecutions of Schwartz and Jannotti.
III. JURISDICTION UNDER THE HOBBS ACT
Defendants raise numerous objections to their convictions. They first argue that this court, in its earlier decision in banc, announced the standard for jurisdiction under the Hobbs Act but ignored a secondary contention, that the evidence failed to meet that standard. Defendants therefore renew in this appeal their argument that the evidence was insufficient. We disagree that the issue of the sufficiency of the evidence was not considered in the earlier opinion. After a thorough examination of the record, this court held as follows:
In this case the jury found that the defendants conspired to violate the Hobbs Act by their acceptance of payments in return for their promises to expedite completion of an elaborate hotel project which, had it been constructed, would have entailed at least a $30 million expenditure. Had the project actually been planned as represented, defendants' actions would have violated the Hobbs Act even if unforeseen difficulties, such as the overthrow of the "sheik", prevented any further action on the project. The federal interest in protecting interstate commerce is no less under the factual situation presented in this case. The threat posed by defendants' actions is just as great. Since Congress has exercised the full scope of its commerce power in the Hobbs Act, we conclude that there was Hobbs Act jurisdiction.
673 F.2d at 594. It is clear from this passage that the court in its earlier opinion not only articulated a standard for jurisdiction under the Hobbs Act but also held that jurisdiction existed on the basis of evidence presented by the government.
Both defendants argue that the district court improperly admitted various pieces of important hearsay evidence. Unless otherwise noted, defendants entered timely objections to the admission of this evidence at trial.
All of the evidence at issue was admitted under the "coconspirator exception" to the rule against hearsay, Fed. R. Evid. 801(d)(2)(E). Under that exception, the out-of-court statements of the defendants' coconspirators will not be excluded as hearsay. The rule is a source of considerable confusion, but its requirements, as construed in this circuit, may be summarized as follows. There must be "independent evidence" of the conspiracy, i.e., evidence independent of the proffered hearsay itself. This evidence must establish by a "clear preponderance" that the conspiracy existed and that both the defendants and the declarant were members of the conspiracy. The "preponderance" test "simply requires the prosecution to present sufficient proof leading the trial judge to find 'that the existence of the contested fact is more probable than its nonexistence. '" United States v. Ammar, 714 F.2d 238, 250 (3d Cir.), cert. denied, 464 U.S. 936, 104 S. Ct. 344, 78 L. Ed. 2d 311 (1983). Finally, the out-of-court statement must have been made during the course of, and in furtherance of, the conspiracy. Id. at 245. Where the district court has admitted such statements under Rule 801(d)(2)(E), our review is limited to the question whether, viewing the evidence in a light most favorable to the proponent (in this case the government), the district court had "reasonable grounds" to support its ruling. Id. at 249.
A. Proof of the Schwartz-Jannotti Conspiracy
In order to assess the defendants' objections to the admission of certain out-of-court statements, it is necessary to review first their challenge to the district court's finding that there was a preponderance of independent evidence establishing a conspiracy to which the defendants belonged. If we conclude that the district court had reasonable grounds for its finding, we must then inquire whether the out-of-court statements challenged by the defendants satisfied the other requirements of Rule 801(d)(2)(E).
We have no doubt whatsoever that the district court had reasonable grounds for finding that a preponderance of the independent evidence established a conspiracy in which Schwartz, Jannotti, and Criden were members. The goal of this conspiracy was illegally to assist the fictitious sheik in matters before the Philadelphia City Council relating to the hotel project, in exchange for cash. In the videotape of a meeting between Schwartz, Criden, and the undercover agents on January 23, 1980, Schwartz told the agents that "we got uh five or six now [new?] members [of the City Council] that came in. Uh, you tell me your birth date. I'll give them to you for your birthday. (Laughter)." (App. 696a) This statement was independently admissible as an admission under Rule 801(d)(2)(A). Schwartz also made statements that evidenced Criden's complicity in the conspiracy. For example, Schwartz told the agents that "there are certain protocol that should be worked out in advance and that's where the law firm, Howard [Criden], will become involved. To put it together so that it doesn't boomerang." (App. 756a) At the conclusion of the meeting, Schwartz examined and accepted an envelope containing $30,000 in cash.
In the videotape of the meeting between Criden, Jannotti, and the agents, also admissible under Rule 801(d)(2)(A), Jannotti stated the following:
JANNOTTI: We'll go in there [the City Council] and battle, we'll go in and battle.
JANNOTTI: Certainly, we'll go in and battle.
(App. 867a) Jannotti also explained to the agents that Schwartz had told him about the proposed scheme:
AGENT: Okay, ah, are you aware of my position and ah, ah.
JANNOTTI: George [Schwartz] has told me.
(App. 848a) At the conclusion of this meeting, the agents gave Jannotti an envelope containing $10,000 in cash.
Because we are convinced that the district court had reasonable grounds for finding that a conspiracy was established by a preponderance of the evidence, we must now consider the defendants' challenges to the admission of particular out-of-court statements under the coconspirator rule.
The defendants first challenge the admission of audio tapes of three phone conversations on January 11 and January 18, 1980, between Howard Criden and an undercover FBI informant. Defendants argue that the conspiracy discussed above had not yet begun at the time of these conversations, and that the tapes therefore should not have been admitted under Rule 801(d)(2)(E). The indictment charged both defendants with belonging to a conspiracy starting January 11, the date of the earliest of the conversations at issue. The government, however, does not challenge in its brief the defendants' assertion that no conspiracy existed at the time of these conversations. Instead, the government seems to argue that the tapes were admissible because they were merely "background" and nonprejudicial. The government, however, has cited no authority for a "background" exception to the hearsay rule, and we will therefore assume that these tapes should have been excluded from evidence at trial.
We reject defendants' contention, however, that admission of the evidence constitutes reversible error. Neither Schwartz nor Jannotti is mentioned in the conversations. The January 18 conversations simply concern the arrangements for the meeting between Criden and the undercover agents and do not hint at illegality. We agree that certain remarks during the January 11 conversation suggest a general atmosphere of corruption. Criden refers to a law partner who is a city councilman, suggesting a deal in the making that might involve political favors. This reference, however, is harmless in view of admissible evidence, considered later, that the partner, Johanson, was indeed a member of the defendants' conspiracy. There are also remarks in the conversation about arrangements being made with Philadelphia-area congressmen who were later indicted and convicted for involvement in ABSCAM. The possibility that the defendants were prejudiced by this indirect association with the congressmen is insignificant in view of other proof of the defendants' guilt, including the statements of Schwartz and Jannotti quoted above. We therefore conclude that it is "highly probable" that these tapes "did not contribute to the jury's judgment of conviction." Government of Virgin Islands v. Toto, 529 F.2d 278, 284 (3d Cir. 1976).*fn2
Defendants also challenge the admission of these particular tapes on the ground that the admission violated their rights under the sixth amendment to confront witnesses. This issue is raised for the first time on appeal, no objection having been entered in the district court. We will assume without deciding that questions of alleged constitutional error under the sixth amendment are generally cognizable under the doctrine of "plain error", Fed. R. Crim. P. 52(b), and that the admission of this hearsay evidence failed to satisfy the requirements of the confrontation clause. We conclude, however, that the admission of these tapes, if erroneous, was harmless beyond a reasonable doubt. Brown v. United States, 411 U.S. 223, 36 L. Ed. 2d 208, 93 S. Ct. 1565 (1973); Chapman v. California, 386 U.S. 18, 24, 17 L. Ed. 2d 705, 87 S. Ct. 824 (1967).
C. The Meetings on January 18, 1980
The defendants next challenge the admissibility of videotapes of meetings between Criden and the FBI undercover agents, and between Criden, the agents, and Louis Johanson, a partner in Criden's law firm and a member of the Philadelphia City Council. Defendants challenge this evidence on various grounds. The first meeting, they assert, took place before the conspiracy began. As explained above, we are willing to assume that this is true and that the evidence should have been excluded at trial. We believe, however, that this evidence was merely cumulative. At the meeting, the agents explained the fictitious hotel project in greater detail to Criden. The agents told Criden they needed help with the many problems that would arise during such a project, and the discussion turned to Johanson and Schwartz. Criden agreed to help enlist them, and the agents promised him $10,000 in return. In view of the very persuasive and damning evidence noted elsewhere in this ...