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United States v. Biaggi

decided: August 1, 1988.

UNITED STATES OF AMERICA, APPELLEE,
v.
MARIO BIAGGI AND MEADE ESPOSITO, DEFENDANTS-APPELLANTS



Appeals from judgments of the United States District Court for the Eastern District of New York, Jack B. Weinstein, then-Chief Judge, convicting defendant Biaggi of accepting unlawful gratuities, violating the Travel Act, and obstructing justice, and convicting defendant Esposito of giving unlawful gratuties and of aiding and abetting violation of the Travel Act, see 673 F. Supp. 96 (1987); 674 F. Supp. 86 (1987). Affirmed.

Timbers, Kearse, and Friedman,*fn* Circuit Judges.

Author: Kearse

Before: TIMBERS, KEARSE, and FRIEDMAN,*fn* Circuit Judges.

KEARSE, Circuit Judge:

Defendants Mario Biaggi and Meade Esposito appeal from judgments of conviction entered after a jury trial in the United States District Court for the Eastern District of New York before Jack B. Weinstein, then- Chief Judge. Biaggi was convicted on one count of accepting gratuities for official acts, in violation of 18 U.S.C. § 201(g) (1982) (current version at 18 U.S.C. § 201(c)(1)(B) (Supp. IV 1986)); one count of use of interstate facilities with intent to carry on an unlawful activity, in violation of 18 U.S.C. § 1952 (1982) (the "Travel Act") (since amended by Pub. L. No. 99-570, 100 Stat. 3207-35 (1986)); and one count of obstruction of justice, in violation of 18 U.S.C. § 1503 (1982). Esposito was convicted on one count of giving gratuities, in violation of 18 U.S.C. § 201(f) (1982) (current version at 18 U.S.C. § 201(c)(1)(A) (Supp. IV 1986)); and one count of aiding and abetting Biaggi's violation of the Travel Act, 18 U.S.C. §§ 1952 and 2 (1982). Biaggi was sentenced to concurrent prison terms of 2-1/2 years on the obstruction of justice count and a year and a day on the gratuity and Travel Act counts, and was required to pay fines totaling $500,000. Esposito was sentenced to two years' probation, with 500 hours of community service, and was ordered to pay fines totaling $500,000. On appeal, defendants contend that there was insufficient probable cause for the electronic surveillance of Esposito, which led to much of the evidence against the defendants; that the government improperly excluded Italian-Americans from the jury; that Biaggi's acts were not "official act[s]" within the meaning of § 201; that the Travel Act convictions should be overturned on statutory and constitutional grounds; and that the evidence was insufficient to support Biaggi's conviction of obstruction of justice. They also challenge certain of the court's evidentiary rulings. For the reasons below, we reject all of defendants' contentions and affirm the judgments of conviction.

I. BACKGROUND

Biaggi is a 10-term congressman from New York's 19th Congressional District, which includes parts of Bronx and Westchester Counties. Esposito, former chairman of the executive committee of the Kings County, New York Democratic Committee, was, during the relevant period, a principal in an insurance brokerage firm, Serres, Visone and Rice, Inc. ("SVR"), and a director or affiliate of a printing company, Beaumont Offset Corporation ("Beaumont"). Biaggi and Esposito were indicted in a seven-count indictment focusing on Biaggi's efforts in 1984-1986 on behalf of Coastal Dry Dock and Repair Corporation ("Coastal"), a major client of SVR, and on Esposito's arrangement of payments of expenses for vacations in 1984-1986 for Biaggi and Biaggi's friend. The indictment charged, inter alia, that defendants conspired to arrange these vacations in furtherance of a fraud on the United States (count 1); that the vacations constituted bribes demanded by Biaggi and paid by Esposito (counts 2 and 3); that the vacations constituted unlawful gratuities paid by Esposito and received by Biaggi in return for official acts performed by Biaggi (counts 4 and 5); that Biaggi's use of interstate facilities in furtherance of his receipt of the bribes or gratuities violated the Travel Act and that Esposito's funding arrangements aided and abetted that violation (count 6); and that after being questioned by agents of the Federal Bureau of Investigation ("FBI") with regard to two of his vacation trips, Biaggi sought to obstruct the grand jury investigation into these matters (count 7). Both defendants were acquitted on counts 1, 2, and 3. Biaggi was convicted on counts 5, 6, and 7; Esposito was convicted on counts 4 and 6. The evidence at trial, taken in the light most favorable to the government, revealed the following events.

A. Biaggi's Actions on Behalf of Coastal; the Vacations

Coastal, whose operations were located in the Brooklyn Navy Yard ("Yard") owned by New York City (the "City"), was in the business of repairing and refurbishing vessels of the United States Navy and other departments of the federal government. During the pertinent period, Coastal was SVR's second or third largest client, usually paying SVR more than $200,000 per year in insurance commissions. In general, the more work Coastal had, the larger its insurance premiums and thus the higher the commissions paid to SVR.

In the early 1980s, Coastal began to experience financial difficulties resulting largely from high fixed costs. It paid substantial rent to the Brooklyn Navy Yard Development Corporation ("BNYDC"), a not-for-profit corporation chartered by the City to run the Yard. Coastal also was required to purchase its electricity, steam, and water from BNYDC at rates higher than those it would have been charged had it purchased directly from the utility companies. In 1983, Coastal's utility rates rose, it lost three bids on Navy contracts, and important rent credits expired. Beginning in March of that year, Esposito met with the chairman of BNYDC several times and with the City's deputy mayor to express concern about Coastal's situation; by September 1983, Coastal was a half-million dollars behind in its payments to BNYDC, and the BNYDC chairman threatened to complain to the Navy.

In March 1984, Esposito provided Biaggi with a round-trip airline ticket and a four-day vacation at a villa owned by Beaumont on the island of St. Maarten. Also present on the trip were Esposito and Esposito's partners in SVR and Beaumont. On May 9, 1984, Coastal's executive vice-president Vincent Montanti wrote Biaggi, urging him to assist Coastal in its dispute with BNYDC.

Shortly thereafter, Biaggi called Deputy Mayor Kenneth Lipper to express concern about Coastal's difficulties. In addition, in June 1984, Biaggi wrote Mayor Edward Koch a letter, on House of Representatives ("House") stationery, "on behalf of Coastal," urging the City "to work out some accommodations [sic]" with regard to Coastal's dispute with BNYDC. Actions by Biaggi's staff on behalf of Coastal were supervised by his congressional administrative assistant.

Biaggi wrote Mayor Koch again in September 1984, this time on the stationery of the House Committee on Merchant Marine and Fisheries. He noted that high utility costs were causing Coastal to lose Navy contracts and stated that he was "eager to be of any assistance in dealing with the Navy." He also suggested, as he had been asked to do by Coastal, that "my presence or the presence of a member of my staff during meetings between the City and Navy might be helpful in demonstrating Congressional interest."

Despite these efforts, Coastal's problems persisted. In October 1984, SVR had to lend Coastal $110,000 to pay overdue insurance premiums.

In mid-1984, Barbara Barlow, Biaggi's friend, had expressed a wish that she and Biaggi spend a Christmas holiday vacation at the Bonaventure Spa, a health resort near Fort Lauderdale, Florida. The couple planned to stay at the apartment of another friend of Biaggi, and Barlow informed Biaggi that they would need a sponsor to enable them to sue the spa's facilities. Biaggi arranged through Esposito have sponsorship provided by James LaRossa, an attorney who represented Esposito and Beaumont. Biaggi and Barlow participated in the spa's programs, she from December 232, 1984 through January 2, 1985, and he from December 27, 1984 through January 2. Their spa bill totaled $3,228, which was charged to the LaRossa account. LaRossa's law firm paid the bill and was reimbursed by Beaumont. Biaggi's air fare to Florida was paid by the House Committee on Aging.

In July 1985, Deputy Mayor Alair Townsend, Lipper's successor, warned Coastal that she would "shut off" its lights if it did not begin to pay its rent and utility arrears to BNYDC. A few days later, Biaggi called her to express concern about Coastal's situation. Biaggi called Townsend again in September 1985 to repeat his concerns and to urge the City to help Coastal.

While Coastal's difficulties with BNYDC continued through late 1985, a new problem arose. The FBI began investigating the company, causing the Navy to scrutinize claims for compensation more closely and to disallow many such claims. This led to a cash flow problem which in turn made Coastal even less competitive for new Navy contracts. In November 1985, these hardships forced Coastal to cancel substantial amounts of insurance previously purchased through SVR.

On the day Coastal canceled those policies, Esposito, who sought to help Coastal by "working all angles," met with Biaggi and Costal's Vincent Montanti. Within days, Biaggi sought to assist Coastal with the Navy. He called Alphonse D'Amato, United States Senator from New York, told him that Coastal was being treated unfairly, and asked him to meet with Coastal officials.

On December 2, 1985, Biaggi met with Esposito and Coastal's chairman Charles Montaniti. The next day, he attended a meeting at Senator D'Amato's office with the Senator and Vincent Montanti, during which the Senator attempted to call Secretary of the Navy John Lehman. In the following weeks, Biaggi had many conversations with Senator D'Amato, in which he encouraged the Senator to help lobby Deputy Mayor Townsend and asked the Senator about any progress with Secretary Lehman.

Throughout 1985, Barbara Barlow had pressed Biaggi for a repeat of their previous year's winter vacation at the Bonaventure Spa. Biaggi asked Esposito to make the arrangements. On December 17, he telephoned Esposito, providing him with Barlow's name and indciating that she would be at the spa from December 22, 1985, through January 3, 1986, and that Biaggi would arrive on December 27. Immediately after the vacation details were dealt with, Esposito asked, "What else is doin'?" and Biaggi said, "By the way, we've been doin' wonders for Montanti." Biaggi reported that, "on the city side, we've been workin' very hard with them and on the . . . federal side, uh . . . we've been getting them money." He said, "I've been bird-dogging it right along." Esposito replied, "Okay. That's all I want to know."

Esposito immediately made arrangements with LaRossa for Biaggi and Barlow to stay at the spa and for the expense to be passed on to Beaumont. Esposito then telephoned Charles Montanti and assured him, "Mario's doin' his best." Later that day, Biaggi made additional calls to both Senator D'Amato and Deputy Mayor Townsend about Coastal.

On December 19, 1985, Esposito informed Biaggi that the spa arrangements were set, saying, "I got it all confirmed for you . . . . . Relax." (As in 1984, Biaggi's air fare was to be paid by the House Committee on Aging.) On December 20, Esposito spoke with his SVR partner Joseph Martuscello and told him that Biaggi was going to be a guest at the spa, saying, "hey, that's good money invested." Martuscello said, "That's good"; Esposito replied, "Yeah, I did it last year too."

After Biaggi returned from this second Florida trip, he continued his efforts on behalf of Coastal. He told Esposito he planned to introduce a bill in Congress to spend $800 million on smaller craft, "stuff [Coastal] can handle." He also met with Senator D'Amato and Charles Montanti to prepare the Senator for a meeting with the Secretary of the Navy. He promised to, and did, call the Commandant of the Coast Guard in an attempt to get more work for Coastal. Biaggi continued his efforts until, in May 1986, Coastal went bankrupt.

B. The Federal Investigation

In October 1985, the federal government had begun an investigation of Esposito unrelated to the matters involving Coastal. In the course of this investigation, it obtained authorization to conduct electronic surveillance of Esposito's home and the offices of Beaumont and SVR. During the surveillance, the agents overheard conversations concerning Biaggi's efforts on behalf of Coastal and the vacations provided him by Esposito and his business partners.

On June 2, 1986, FBI agents visited Biaggi and questioned him about his relationship with Esposito and his actions on behalf of Coastal. Minutes after the FBI interview concluded, Biaggi telephoned Esposito. As set forth in greater detail in Part II.E. below, Biaggi informed Esposito that he had just been questioned by the FBI and prompted Esposito to take the positions, inter alia, that Esposito had arranged the vacations because he was concerned for Biaggi's health, not because Biaggi was a member of Congress; and that Esposito's first approach to Biaggi with respect to Coastal had occurred only four or five months earlier. Biaggi also stated that, since he had told the FBI agents only about the two trips to Florida, Esposito should not mention the trip to St. Maarten.

C. The Verdicts

The jury acquitted Biaggi and Esposito of the charges that they had conspired to defraud the United States in violation of 18 U.S.C. § 371 (1982), and that they had, respectively, solicited and paid bribes in violation of 18 U.S.C. §§ 201(c) and (b) (1982) (current versions at 18 U.S.C. §§ 201(b)(2) and (b)(1) (Supp. IV 1986)). It convicted Biaggi of accepting gratuities in return for performing official acts, in violation of 18 U.S.C. § 201(g) (1982), of traveling in or using facilities in interstate commerce with the intent to carry out unlawful acts, in violation of 18 U.S.C. § 1952(1982), and of obstructing justice, in violation of 18 U.S.C. § 1503. It convicted Esposito of paying gratuities to Biaggi in exchange for his official acts, in violation of 18 U.S.C. § 201(f) (1982), and of aiding and abetting Biaggi's Travel Act violation, in violation of 18 U.S.C. §§ 1952 and 2. Defendants were sentenced as indicated above.

II. DISCUSSION

On appeal, each defendant mounts a variety of challenges to his conviction. Esposito contends that there was insufficient probable cause to justify electronic surveillance of his home and offices and that the information thereby seized should have been suppressed. Biaggi contends that the evidence was insufficient to support his conviction for obstruction of justice. Both defendants, in addition to making certain evidentiary arguments, contend that the government improperly exercised its peremptory challenges to exclude jurors of Italian descent; that Biaggi's intercessions on behalf of Coastal were not "official act[s]" within the meaning of § 201; that the solicitation or receipt of unlawful gratuities is not a proper predicate for a charge of violation of the Travel Act; and that the court should have dismissed the Travel Act count as violative of the Speech or Debate Clause of Article I of the Constitution. We have considered all of defendants' arguments on these appeals and have found in them no basis for reversal.

A. Probable Cause for Electronic Surveillance

Much of the government's evidence in the present case was obtained through electronic surveillance of the home of Esposito and the offices of SVR and Beaumont pursuant to a series of court orders commencing in October 1985, pursuant to 18 U.S.C. § 2518 (1982 & Supp. II 1984) (amended by Pub. L. No. 99-508, 100 Stat. 1851-53, 1856, 1857 (1986)). Prior to trial, Esposito moved unsuccessfully to suppress the information derived from the surveillances on the ground that there was insufficient probable cause for the issuance of the first such order. This contention, renewed here, lacks merit and does not require extended discussion.

To the extent pertinent here, § 2518 allowed a federal court to authorize interception of oral or wire communications if it determined, on the basis of the facts submitted by the applicant, that there was probable cause to believe (a) that an individual was committing, had committed, or was about to commit an offense enumerated in 18 U.S.C. § 2516 (1982 & Supp. II 1984) (amended by Pub. L. No. 99-508, 100 Stat. 1851, 1855 (1986) and Pub. L. No. 99-570, 100 Stat. 3207-35 (1986)), (b) that particular communications concerning that offense would be obtained through such interception, and (c) that the facilities to be surveilled were being used or were about to be used in connection with the commission of such an offense. 18 U.S.C. §§ 25l8(3)(a), (b), and (d). The standard of probable cause applicable to § 2518 is "the same as the standard for a regular search warrant," United States v. Fury, 554 F.2d 522, 530 (2d Cir.), cert. denied, 433 U.S. 910, 97 S. Ct. 2978, 53 L. Ed. 2d 1095 (1977), and a reviewing court will defer to the issuing court's determination that there was probable cause "as long as there existed a substantial basis for a magistrate or judge to conclude that a search would uncover evidence of wrongdoing," United States v. Nersesian, 824 F.2d 1294, 1306 (2d Cir.), cert. denied, 484 U.S. 958, 108 S. Ct. 357, 98 L. Ed. 2d 382 (1987). There was no lack of probable cause in the present case.

The original surveillance order was entered on the basis of lengthy and detailed affidavits of an FBI agent setting forth, inter alia, information obtained through physical surveillances of certain individuals by law enforcement agents and information provided by a number of confidential informants whose reliability had been proven over a span of 2-15 years. The details set forth in the affidavits, which remain under seal, furnished a substantial basis for believing that the individuals identified were using or were about to use the targeted premises for the commission of acts in violation of the racketeering statute, 18 U.S.C. § 1963 (1982), which is one of the offenses enumerated in § 2516. The facts that the anticipated offenses were unrelated to the subject matter of the present prosecution and that Biaggi was not mentioned in the application does not impair the conclusion that the information presented in the application provided probable cause for the issuance of the surveillance authorization. The motion to suppress was properly denied.

B. The Peremptory Challenges

Defendants contend that they are entitled to a new trial because the government purposely used its peremptory challenges to exclude Italian-Americans from the jury, in violation of defendants' rights under the Equal Protection Clause, see Batson v. Kentucky, 476 U.S. 79, 90 L. Ed. 2d 69, 106 S. Ct. 1712 (1986), and the Sixth Amendment, see Roman v. Abrams, 822 F.2d 214, 224-25 (2d Cir. 1987). We reject this contention.

During the voir dire, defendants pointed out to the court that the government had used its first five peremptory challenges to exclude members of the venire whose last names ended in vowels. They contended that this evinced the deliberate exclusion of Italian-Americans from the jury. Thereafter, the government also peremptorily challenged two alternate jurors whose last names ended in vowels. At the close of the voir dire, defendants moved to have the jurors dismissed and to select a jury from a new panel. In order to permit full briefing of the matter without delaying the trial -- for which a jury had been selected that did include Italian-Americans -- the court postponed consideration of the matter until the trial had been concluded.

After trial, defendants renewed their motion and requested a new trial. The government submitted an affidavit setting forth the reasons of the lead prosecutor for the government's challenges. Both prosecutors who had participated in the voir dire testified at an evidentiary hearing and were subject to what the district court characterized as "vigorous and dogged" cross-examination by defense counsel.

In an opinion reported at 673 F. Supp. 96 (1987), the court denied defendants' motion. The court noted that defendants had made out a prima facie case of impermissibly discriminatory use of the government's peremptories. Thus, it observed that Americans of Italian descent share a common experience and culture, often share the same religious and culinary practices, often have commonly identifiable surnames, and have been subject to stereotyping, invidious ethnic humor, and discrimination, and it concluded that Italian-Americans are a cognizable racial group within the meaning of Batson v. Kentucky, 476 U.S. at 96; and Castaneda v. Partida, 430 U.S. 482, 494, 51 L. Ed. ...


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