On Appeal from the United States District Court for the Middle District of Pennsylvania, D.C. Criminal No. 84-00156-04.
Sloviter and Becker, Circuit Judges, and Cowen, District Judge.*fn* Becker, Circuit Judge, concurring in part; dissenting in part.
This appeal grows out of a bribery conspiracy that, in the words of the district court judge who sat through the many days of trials and hearings, "struck at the very heart of state government." App. at 151. William T. Smith, Jr., a federal prisoner, appeals from an order of the district court denying his motion to reduce his sentence imposed following his conviction for his part in that scheme.
As more fully set forth in our earlier opinion affirming Smith's conviction, the charges arose out of a scheme in which Smith, an attorney and the then Republican County Chairman of Dauphin County, and John R. Torquato, the son of a former Democratic County Chairman of Cambria County, agreed to make political contributions to certain Pennsylvania state officials, including the Republican State Chairman, Robert Asher, and the State Treasurer, R. Budd Dwyer, in order to obtain lucrative contracts for CTA, Ltd., a small California company. Smith and Torquato were to be substantially remunerated for their efforts. Indeed, had the scheme succeeded, Smith stood to gain two million dollars. Instead, Smith as well as four other individuals and two corporations were charged in a thirty-nine count indictment on a variety of federal crimes. See United States v. Smith, 789 F.2d 196 (3d Cir.), cert. denied, 479 U.S. 1017, 107 S. Ct. 668, 93 L. Ed. 2d 720 (1986).
Smith and the government engaged in post-indictment negotiations which ended when the government refused to give Smith total immunity from prosecution. Smith's co-conspirator Torquato did reach an agreement with the government whereby, in return for his cooperation, he pled guilty to only one count of the indictment. Torquato was thereafter sentenced to four years' imprisonment and a fine of $10,000.
Two other individual defendants also pled guilty, but Smith and co-defendant Alan R. Stoneman proceeded to trial. After a three-month trial, a jury convicted both. Smith was found guilty of one count of conspiracy, 18 U.S.C. § 371 (1982), five counts of interstate transportation in aid of racketeering, 18 U.S.C. § 1952 (1982), and three counts of mail fraud, 18 U.S.C. § 1341 (1982). The court thereafter sentenced Smith to twelve years of imprisonment and imposed a $63,000 fine.*fn1 This court affirmed the conviction, and the Supreme Court denied certiorari.
After his conviction and sentencing, Smith entered into an agreement with the government whereby, in exchange for his cooperation in the future prosecution of cases arising out of the bribery scheme, the government agreed not to prosecute Smith's wife and to join Smith in a Rule 35 motion for reduction of sentence. Any evidence or testimony provided by Smith was to be subject to an immunity order previously entered by the district court in accordance with 18 U.S.C. §§ 6002 and 6003 (1982), the federal witness immunity statute. That order, mirroring the language of section 6002, provided, in relevant part, that "no testimony or other information compelled under this Order (or any information directly or indirectly derived from such testimony or other information), may be used against the witness in any criminal case, except a prosecution for perjury, giving false statement, contempt, or otherwise failing to comply with this Order." App. at 61.
Thereafter, Smith provided what the government agreed was "substantial cooperation." App. at 81. That cooperation culminated in Smith's trial testimony against Dwyer and Asher, which contradicted Smith's earlier testimony at his own trial. After testifying, Smith suffered a serious heart attack. Dwyer and Asher were convicted; the government believes that Smith "was a crucial and outcome determinative witness insofar as the prosecution of Dwyer and Asher were concerned." App. at 85.
Smith filed a motion for reduction of sentence pursuant to Rule 35 of the Federal Rules of Criminal Procedure, in which the government joined. The district court denied the motion. The court stated that Smith "should have testified truthfully in the first place or not at all," and further explained that "to reduce Smith's sentence to Torquato's would enable Smith to take his chances at trial, be convicted, recant his testimony, testify against others, and then be treated just like Torquato who admitted his guilt initially. We decline to be a party to such a device." App. at 152, 153.
On appeal, Smith argues that the district court improperly used immunized testimony against him; that the court abused its discretion in light of Smith's substantial post-conviction cooperation, his disproportionate sentence compared to that of his co-defendants, and the deterioration of his health and his finances; and that the court relied on misinformation regarding Smith's eligibility for parole in ruling on the motion. In his reply brief, Smith contends that the case should be remanded to the district court for consideration of the effect of the Supreme Court's decision in McNally v. United States, 483 U.S. 350, 107 S. Ct. 2875, 97 L. Ed. 2d 292 (1987), which was announced after this appeal was filed.
Use of Immunized Testimony
We consider first Smith's contention that the district court improperly relied on his post-conviction immunized testimony. Smith's agreement with the government adopted the court's previously entered immunity order, which in turn incorporated certain provisions of the federal witness immunity statute, including 18 U.S.C. § 6002.
Section 6002 provides that "no testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case. . . ." 18 U.S.C. § 6002. Although Smith's testimony in the Asher/Dwyer trial was not compelled, we construe the agreement incorporating the immunity order to mean that Smith is entitled to the same protection under the order as if his testimony had been compelled.
Smith contends that the district court used his immunized testimony against him when it concluded that he had lied at his own trial, which was one of the factors the court mentioned in denying Smith's motion to reduce his sentence. Smith's argument is based on a number of fallacies. First, there is no factual basis for Smith's supposition that his perjury in his own trial became evident to the court only as a result of his retraction of that testimony under immunity. On the contrary, the jury verdict against Smith demonstrated conclusively that his protestations of innocence from the witness stand were false. Furthermore, the government, relying on the holding in United States v. Grayson, 438 U.S. 41, 57 L. Ed. 2d 582, 98 S. Ct. 2610 (1978), that perjured testimony may be a basis for an enhanced penalty, had emphasized Smith's perjured testimony when it filed its sentencing memorandum after Smith's conviction. Because, therefore, the record in this case discloses a firm independent basis for the district court's knowledge of Smith's perjury at his own trial, we cannot conclude that the district court used Smith's immunized testimony at all. Cf. Kastigar v. United States, 406 U.S. 441, 460, 32 L. Ed. 2d 212, 92 S. Ct. 1653 (1972) (prosecution may be brought subsequent to defendant's immunized testimony when evidence used is derived from a source independent of the compelled testimony).
Second, Smith himself asked the court to consider his immunized testimony by basing his Rule 35 motion for reduction on the fact of his cooperation. Once Smith urged the district court to grant him leniency on the basis of his cooperation in testifying, Smith cannot now complain that the court erred because it took that testimony into account. In an analogous situation, the Court of Appeals for the Seventh Circuit held that the district court could consider defendant's immunized grand jury testimony in imposing a sentence when the defendant himself had offered a transcript of that testimony into evidence during the trial. United States v. Patrick, 542 F.2d 381, 392 (7th Cir. 1976), cert. denied, 430 U.S. 931, 51 L. Ed. 2d 775, 97 S. Ct. 1551 (1977). The court explained that the defendant "should not be allowed to complain about the Judge's exposure to his grand jury testimony in light of his own use of portions thereof as part of his defense." Id. The same analysis is applicable here.
Finally, it is difficult to find incrimination in the context of the procedural setting here. At the time of his immunized testimony, Smith had already been convicted and sentenced. He could not be subjected to further criminal penalty on those crimes. The proceeding before the district court on the motion to reduce sentence was not one to impose a criminal penalty, but to relieve him from one. The failure to reduce a sentence is not equivalent to the imposition of a criminal penalty; if there can be no criminal penalty, there can be no incrimination. See Allen v. Illinois, 478 U.S. ...