Justia Federal District Court Opinions

The case involves the activities of a tax-fixing ring in Washington and New York generally, and especially in connection with the taxpayers Pattullo Modes, Gotham Beef Company and at least one other. The indictment was filed on October 25, 1954, against appellants Henry W. Grunewald, Daniel A. Bolich and Max Halperin and others: in Count 1 all defendants are charged with conspiracy to defraud the United States in the exercise of its governmental functions of administering the internal revenue laws and of detecting and prosecuting violations of the internal revenue laws free from improper influence, dishonesty, fraud and corruption, and in the right and interest of the government in the conscientious, honest and faithful services, judgments, determinations, and actions of the defendants who were members of the Bureau of Internal Revenue, and to conceal the acts of the conspirators, in violation of the general conspiracy statute, 18 U.S.C. § 371; in Count 2 substantially the same charge is made against Bolich, Steinberg and Scherm, as employees of the Bureau of Internal Revenue, in violation of 26 U.S.C. § 4047(e)(4); and in Counts 5, 6 and 7 appellant Halperin is charged with having corruptly endeavored to influence witnesses before the Grand Jury in the Eastern District of New York to give false testimony concerning certain of the transactions involved in the tax-fixing scheme alleged in Count 1, in violation of 18 U.S.C. § 1503 and § 1505. The general, continuing conspiracy is alleged to have been in operation from January 1, 1946 to the return date of the indictment; and the activities of Halperin, charged in Counts 5, 6 and 7, are alleged to have taken place in March, 1952. Counts 3 and 4 were dismissed and are not involved on this appeal.

Steinberg and Scherm were acquitted; the appellants were found guilty as charged. Grunewald was sentenced to five years imprisonment and $10,000 fine on the conspiracy charge; Bolich was sentenced to five years imprisonment and $10,000 fine on the general conspiracy charge and to three years imprisonment and $5,000 fine on the charge of conspiring while an employee of the Bureau of Internal Revenue, the prison sentences to run concurrently; and Halperin was sentenced to five years imprisonment and $5,000 fine on the conspiracy charge and two years imprisonment and $1,000 fine on each of the three charges of corruptly endeavoring to influence witnesses, the prison sentences to run concurrently. Halperin testified in his own defense; the others did not.

Each of the appellants contends that the evidence is not sufficient to support a finding that he was a party to the conspiracy as charged; that the charge of conspiracy to conceal, coupled with the fact that overt acts were alleged to have taken place in 1951 and 1952, constituted a mere device to avoid the running of the Statute of Limitations which is said to be a bar to prosecution of the conspiracy charges; and that each of the appellants was deprived of a fair trial by reason of numerous allegedly erroneous rulings.

Sufficiency of Proof

The proof of the existence of a single, over-all conspiracy is simply overwhelming. The complicity of Halperin, as well as Davis, Hoffman and others, is established beyond peradventure of a doubt. The evidence is no less convincing against Grunewald and Bolich, and the jury were warranted in drawing the conclusion that all the circumstances taken together established beyond reasonable doubt that Grunewald and Bolich were not only members of the conspiracy, but that they were 'the fixers.'

The first reference in the proofs to the Pattullo Modes case is to a time in 1947. Bolich was then Special Agent in charge of the Intelligence Unit of the Bureau of Internal Revenue in New York City. In the fall of 1948, he became Assistant Commissioner of Internal Revenue, with his office in Washington and his living quarters in part of a suite, in the Hotel Washington, maintained as an office by Grunewald and at his expense. The intimacy between Bolich and Grunewald during the time of the events relevant to this case is amply proved. Scherm was a Civil Audit Agent in New York and Steinberg was his superior. These two play a minor role.

Schopick, Davis and Hoffman were named as defendants and as co-conspirators, but the case as to them was severed. The first two, partners in the law firm of Schopick & Davis, were not adverse to letting it get around that they could do a good job in income tax fraud cases, irrespective of the merits. Hoffman was employed by them as a business chaser, receiving a split of the fees on the business brought in by him. Occupying office space with the firm, was appellant Halperin, who happened to be an old friend of Grunewald. Schwaeber & Saver, another law firm, was brought into the Pattullo Modes case by Schopick & Davis under circumstances which will again be briefly referred to, and they played an innocent but nonetheless effective role in the operation of the conspiracy.

Pattullo Modes was a New York dress manufacturing concern controlled by family stockholders. From 1942 through 1946 Pattullo Modes had defrauded the government of corporate and individual income and other taxes by the simple expedient of making off-the-record sales and 'jacking up the travel and entertainment accounts,' putting the cash proceeds of over $300,000 in a safe deposit box.

Louis M. Berman and his brother as partners were the owners of Gotham Beef Co., ship chandlers. Monroe Tobias, associated with H. Merdinger & Co., was the Gotham Beef Co. accountant. Gotham Beef Co. had failed to report income from sales of meat at above ceiling prices on their partnership and individual income tax returns, claiming that this income was offset by unreported purchases at over ceiling prices. The off-the-record sales were in the neighborhood of $100,000, and the documentary proof of the cash premium payments over the ceiling prices amounted to only between 10 and 20 per cent of the over ceiling sales.

In the spring of 1947 Scherm who had been making an audit of Pattullo Modes told Smith, the Pattullo Modes accountant, that an examination of a customer of Pattullo Modes had revealed that 'there were certain sales or certain income that was missing' and that a Form 917 disclosing such information was out against them. The effect of this on the Pattullo Modes' people need not be described. It was in June, 1947, that the Gotham Beef Co. case reached a critical stage.

The sordid details of how both cases found their way to the law offices of Schopick & Davis were related at the trial. The upshot of the testimony of the taxpayers and of Davis and Hoffman, all of whom turned state's evidence, was that, after a number of preliminary moves to obtain assurances of no criminal prosecution had proved futile, Davis told Halperin that they needed some 'real help.' Halperin suggested that such help might be obtained from Grunewald in Washington, an old friend of his and, far more important, 'a close personal friend' of Bolich, the Agent in Charge in New York. In due course Pattullo Modes produced $100,000 in cash and Gotham Beef Co. produced $60,000 in cash, for 'the man in Washington,' to be paid over to him when the assurances of no criminal prosecution were officially given.

Another case, that of 'the Glovers,' comes in only incidentally because it ended in an impasse over price. Davis testified that Halperin told him that Grunewald wanted 'something in the neighborhood of $175,000 or $200,000,' and that he and his associates withdrew from the case when 'the Glovers' said $100,000 was as high as they would go.

There is abundant and convincing evidence of how the taxpayers raised the huge amounts of cash said to have been demanded by Grunewald, without disposing of assets, cashing checks or leaving other traces of their having done so; of the details of counting the money and putting it in various safe deposit boxes with safeguards that delivery to Grunewald should not be made until official announcement was made that there would be no criminal prosecution of the taxpayers. There was no direct proof that any part of these sums reached the hands of Bolich; nor did any witness testify to the delivery of either sum to Grunewald. However, in October, 1948, after the Gotham Beef case was closed out 'on a no prosecution basis,' Tobias called Greenstein, co-escrowee with Halperin, and told him he could release the money to Halperin. A few days later Greenstein told Tobias that he had done so; and Halperin informed Davis that he had taken the money to Washington and delivered it to Grunewald. Hoffman testified that, after the official decision not to prosecute Pattullo Modes was made, he went with Halperin to Halperin's safe deposit box in the Chemical Bank and Trust Company. Together they counted the $100,000, placed it in two brief cases, and took it by train to Washington, where Grunewald met them at the Union Station. Halperin, carrying the two brief cases containing the money, and Grunewald walked off together.

Grunewald's status as a co-conspirator is established by direct evidence. Hoffman testified that, on one of his trips to Washington with Halperin, he went up to the suite in the Washington Hotel, remaining in the living room where he was joined later by Grunewald and Halperin, who introduced him to Grunewald. Davis further testified that in late September or October of 1948 there was a conversation between Halperin, Grunewald and Davis, in Brunewald's office in the Munsey Building, to the effect that Grunewald had agreed to accept $100,000 in the Pattullo Modes' case, that he, Davis, thanked Grunewald for this, to which Grunewald replied 'O.K., O.K.'

Grunewald is reported to have discussed the Gotham Beef case with Halperin in the early summer of 1948 at the Hotel Washington, at which time Grunewald, identifying himself as 'Captain Henry,' telephoned an order to 'put a red flag * * * on the Gotham Beef case.' There was testimony both by Bolich's secretary and by Grunewald's secretary that Bolich received repeated telephone calls from 'Captain Henry' and that, when calling Bolich, Grunewald was identified only as 'Captain Henry.'

In March of 1948, and long before Grunewald's connection with the Pattullo Modes case, Bolich as Agent in Charge in New York flatly rejected a perjurious voluntary disclosure claim submitted by Davis. But no sooner had Grunewald agreed to look into the Pattullo Modes case than we find Bolich in New York asking the Special Agent assigned to that investigation for a status report. When it was learned in July, 1948, that the investigators were about to circularize the firm's customers, as a result of the issuance of the Form 917, Davis asked Halperin to see Grunewald; and, shortly thereafter, Bolich issued an order that the field examination be terminated at once.

Indeed, it was Bolich who, without the knowledge of the men working in the Pattullo Modes case in the Bureau of Internal Revenue, gave the investigation the coup de grace by agreeing that if the taxpayer cooperated there would be no criminal prosecution. This proved a veritable open sesame and there was a scramble on the part of the Pattullo Modes' people to make every possible scrap of evidence of their wrongdoing promptly available to the government investigators, even to the extent of signing detailed confessions. No wonder the honest men in the Bureau, who had been anticipating a criminal prosecution, were taken aback by such surprising developments.

Even in the much less open-and-shut case of Gotham Beef Co., Mullenbach, the government agent, had made a final report in April, 1948, recommending that the individuals involved be criminally prosecuted. The case was assigned to Kuehl, the Assistant Special Adviser in Intelligence Division in New York who had arranged with Ronayne, the taxpayer's attorney, for a conference on August 3, 1948. At this stage, his own efforts to see Bolich having proved unavailing, Davis had Halperin telephone Grunewald who said that Bolich would see Davis. Thereafter Davis conferred with Bolich and Bolich passed the Gotham Beef Co. contentions along to Kuehl. Huehl, after contentions along to Kuehl. Kuehl, after the attorney of record, decided the case was too weak for prosecution. Kuehl also testified that although Bolich had been his superior for three years prior to this, he had never previously received any communication from him, by telephone or otherwise.

The malefactors slipped seriously when Bolich received in November, 1949, the report of his former subordinate, Joseph R. Baradel, head of the Conference and Review Section in the Special Agent's office in New York. Baradel was the man who reluctantly announced to the Pattullo Modes' people on January 10, 1949, that, in view of Bolich's commitment, there would be no criminal prosecution of the taxpayers. It having occurred to Baradel that some explanation of Bolich's commitment was called for in the file, he sent the report to Bolich with a little scratch pad note reading 'Any comments? JRB.' Bolich then telephoned Baradel at his home and asked him to write an explanatory memorandum 'to take a little heat off the situation,' which Bolich said 'left him on a hot spot.' Certain changes were made but the substance remained.

Many of the important details have been omitted for the sake of brevity and others, bearing on concealment, will be sketched below where they have special relevancy. But even thus abbreviated, the foregoing outline summary of the evidence taken in the course of a seven weeks' trial refutes the contention of appellants Grunewald and Bolich that the record is insufficient to establish their membership in any unlawful conspiracy.

Much of the evidence was admitted 'subject to connection.' Grunewald protests that this worked an injustice as to him because it gave a 'fatal aura' to the case, the inevitable effect of which was so to condition the minds of the jurors that they were incapable of viewing the facts in true perspective. Grunewald concedes, however, that such qualified admission is common practice, as indeed he must. 1 Wigmore, Evidence 14 (3rd ed.). This is not to deny the possibility of a case in which it is so abused as to demand reversal, but this is not such a case. Indeed, there was an abundance of direct proof of statements and conduct of Grunewald and, against this background, the protestations of innocence made by his counsel are far from convincing.

Neither accountant nor lawyer, but the intimate of such highly placed persons as Assistant Commissioner of Internal Revenue Bolich, Grunewald successfully demanded $100,000 as the price of his participation in the Pattullo Modes matter. His suggestion that this might be due to a philosophy of 'ask and ye shall receive' could persuade only a person of rare naivete. And while 'fixing' broken chairs, windows and so forth is commonly understood to mean restoring the objects to good condition, this is not the common understanding of 'fix' when used, as by Grunewald, in conversation with his secretary, Nancy Hain, with reference to tax cases. Thus the jury could reasonably have understood 'fix' in this context to mean 'to dispose in one's favor by bribery or similar means; to procure the favor of; as, to fix a jury.' Funk and Wagnall's New Standard Dictionary of the English Language, p. 933, col. 2 (1946). On the basis of this and other evidence against Grunewald the jury's finding of his membership in a criminal conspiracy cannot be said to be unwarranted.

Appellant Bolich summarizes the case against him as amounting only to proof of his 'friendly acquaintanceship with Grunewald.' He claims that there was nothing unlawful about any of the steps taken by him as an officer of the government charged with the administration of the Internal Revenue Laws. And he relies upon the presumption of innocence and the oft-repeated statement that in a case of circumstantial evidence 'the facts must exclude every other reasonable theory or hypothesis except that of guilt.' What this boils down to, however, is a contention that, as the jury might have found that the association of Bolich and Grunewald was merely one of friendship, and that the relationship between his various rulings, conversations and telephone calls, and the acts of the other participants in the conspiracy, was purely coincidental and wholly innocent, therefore the question of his guilt or innocence should not have been submitted to the jury. But this confusion of the functions of judge and jury merely befogs the issue. It was for the jury to draw the inferences to be deduced from the proofs taken as a whole, after they had, in accordance with the instructions of the trial judge, determined questions of credibility, culled the wheat from the chaff, and reached a conclusion as to what the facts were. In this connection the usual instructions on the presumption of innocence and the rules applicable to circumstantial evidence are given to aid the jury in its deliberations. And see, Holland v. United States, 348 U.S. 121, 139-140, 75 S.Ct. 127, 99 L.Ed. 150. If the law were as contended by appellant Bolich, the court would be required to assume that of conflicting possible inferences those favorable to a defendant must be taken as matter of law; and thus the conviction of the ring leaders and real brains behind illegal conspiracies of the most vicious and harmful character would become impossible, as they often have a front of apparent respectability and keep well concealed their contacts with those who do their bidding and who are more likely to be discovered. United States v. Valenti, 2 Cir., 134 F.2d 362.

The function of the trial judge and that of this court is to examine the record and decide whether or not there was sufficient evidence to justify a finding that appellants, including Bolich, were participants in the conspiracy. It is not our function to decide questions of credibility or to choose between conflicting possible inferences, whether taken piecemeal or otherwise. On the record as a whole it is clear to us that the question of the guilt or innocence of Bolich was for the jury.

What we have just said applies with equal force to the rules to be followed in appraising the sufficiency of the evidence against Halperin with respect to Counts 5, 6 and 7, which will be discussed more fully below.

Statute of Limitations

Each of appellants argues that, even if a conspiracy is proved, prosecution is barred by the Statute of Limitations. This is an interesting and important question, seemingly one of first impression. As all parties agree that the three-year period prescribed by 18 U.S.C. § 3282 is applicable, the crucial date is October 25, 1951. Bolich, Grunewald and Halperin earnestly press their view that the Statute of Limitations began to run no later than January 10, 1949, when the official ruling was made that there would be no criminal prosecution in the Pattullo Modes case.

The instructions of the trial judge on the subject were:

'To determine whether certain of the alleged overt acts were in furtherance of the object of the conspiracy, you have to determine the duration of the conspiracy. Did it end when the Pattullo Modes people and the Gotham Beef people received an assurance of no prosecution from the Bureau of Internal Revenue, or was a part of the conspiracy a continuing agreement to conceal the acts done pursuant thereto? In determining whether a part of the conspiracy was an agreement to continue to conceal the illegal acts after their consummation, you may not imply that such an agreement was part of the conspiracy. You would have to find from the evidence of the acts and declarations of the co-conspirators that there was an understanding or agreement to conceal the conspiracy. If you find that such an agreement or understanding to conceal the conspiracy was not a part of the conspiracy to defraud the government, but no more than an afterthought brought to the surface when the co-conspirators were confronted with the Grand Jury and King Committee investigations, then you must find, as a matter of law, that the defendants are not guilty of the crime charged in the first count of the indictment. If you find that the evidence shows, beyond a reasonable doubt, that as a part of a conspiracy to defraud the government, there was an agreement or understanding to conceal the illegal acts and that this too was an objective or part of the conspiracy, then you may find that such understanding was a part of the conspiracy. However, you must additionally determine whether this objective of the conspiracy was known to the defendants. If this objective was known originally by only part of the conspirators but thereafter during the existence of the conspiracy, the scope of the conspiracy was extended so as to include such an agreement to conceal, and if you find that some of the defendants did not know of the expansion to include the agreement to conceal, you may not impute to them the knowledge of their co-conspirators and they could not be found guilty of the crime charged in Count One.'

The overt acts relied upon were alleged to have taken place in 1951 and 1952, within the three-year period thus referred to. Accordingly, if there was insufficient evidence to support the above quoted portion of the judge's charge, we must reverse.

That there was ample evidence of a single, continuing conspiracy by members of a tax-fixing ring is, we think, too plain for reasonable debate. United States v. Ganey, 2 Cir., 187 F.2d 541; United States v. Manton, 2 Cir., 107 F.2d 834; United States v. Witt, 2 Cir., 215 F.2d 580; United States v. Johnson, 3 Cir., 165 F.2d 42. The partners in the law firm of Schopick & Davis, with their business chaser Hoffman and their associate Halperin, were operating regularly with Grunewald and Bolich, and the specialty of this combination of wrongdoers was fixing tax cases. There is no evidence whatever that the ring ceased operations, nor that any of the appellants withdrew from the conspiracy. The unsuccessful attempt to get the Glover case was made in 1950; and there was evidence that in the post-1951 period appellants maintained a continuing relationship and communication, partly under cover of an alias, and that Grunewald had more than once made statements to the effect that he was in the business of handling tax cases and 'would get them fixed.' Moreover, there was a considerable quantum of evidence of statements and acts, both before and after the refusal of 'the Glovers' to meet the terms suggested by the conspirators, which tended to show that one of the terms of the conspiracy was that the participants would take whatever steps were necessary to cover up their tracks and prevent disclosure of their activities.

It must be borne in mind that what these tax fixers did was carried on under the very noses of some of the most experienced and intelligent investigators in the government service. What the fixers had to sell was freedom from criminal prosecution for tax frauds. What the taxpayers bargained for was protection from a tax evasion prosecution.

The various steps taken by Bolich were necessarily reflected in numerous official reports of others in the Internal Revenue Bureau. It required no unusual acumen to appreciate the fact that the possibility, indeed the likelihood of an investigation of some sort hung over the conspirators like a sword of Damocles. Indeed, the preliminary steps at avoidance of detection were proved to have been taken while the Pattullo Modes and Gotham Beef cases were being processed. The telephone call to Baradel at his home is one instance. Another is the insistence, at Grunewald's suggestion, that the law firm of Schwaeber & Saver be continued as lawyers for Pattullo Modes and made to believe that the happy outcome, which was the result of the 'fix,' was due to their honest efforts in behalf of their client. This could have served no other purpose than that of forestalling suspicion.

This conspiracy is wholly unlike the ordinary illegal scheme in that the jury may well have inferred that the official announcement that there would be no criminal prosecution of the taxpayers was merely the delivery of a substantial installment of what appellants agreed to deliver for the huge sums paid. The six-year Statute of Limitations, 26 U.S.C. (1940 Ed.) § 3748, did not run in favor of the taxpayers until some time after the commission of the overt acts relied upon. In the interval there was no assurance, other than continuing efforts by Grunewald, Bolich and the others, that the whole nefarious business might not be brought to light, followed by the revocation of the decision not to criminally prosecute the taxpayers. This is a significant element in the proofs adduced by the government, as concealment of the conspiratorial acts was necessary not only to protect the conspirators from a conspiracy prosecution but also to protect the taxpayers from a tax evasion prosecution. And the indictment in paragraph 1 specifically charges that the conspirators agreed upon a scheme to defraud the United States in the exercise of its governmental functions of '* * * prosecuting violations of the internal revenue laws.'

The civil audit of the books and accounts continued for a long period of time and the conspirators, including the taxpayers, knew this would be so. This was another factor which the jury might consider in determining the scope of the general conspiracy charged.

The record contains ample proof of efforts by the conspirators to forestall suspicion and wipe out traces of their operations and these efforts developed later and in 1951 and 1952 into an intensified campaign of concealment, the details of which will be referred to briefly in connection with the charges against Halperin in Counts 5, 6 and 7.

Appellants lean heavily upon Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 93 L.Ed. 790 and Lutwak v. United States, 344 U.S. 604, 73 S.Ct. 481, 97 L.Ed. 919; but these cases, properly construed, support the contentions of the government. In Krulewitch the conspiracy was definitely over when the alleged concealment took place. The contention which the court rejected was that conspirators must be deemed to have agreed 'to collaborate with each other to conceal facts in order to prevent detection, conviction and punishment' and that this was a sort of implied 'subsidiary phase of the conspiracy.' Indeed, no such 'subsidiary' agreement was even alleged in the indictment. In the case before us now it was charged in the indictment that one of the terms of the illegal agreement was that continuing efforts would be made 'to avoid detection and prosecution by any governmental body' and much of the proof adduced at the trial was admitted in support of this charge. The jury were instructed that no such term of the agreement could be implied but that they must make a finding based upon the evidence before them, and that if the efforts to conceal were 'no more than an afterthought' they must find defendants not guilty.

In Lutwak, despite the fact that the indictment charged an agreement to conceal, there was no evidence to support it. The clear implication is that, if the allegation had been supported by evidence, the court would have arrived at a different conclusion, for it is stated in the opinion, 344 U.S. at page 616, 73 S.Ct. at page 488: 'But there is no statement in the indictment of a single overt act of concealment that was committed after December 5, 1947, and no substantial evidence of any. Such acts as were set forth and proved were acts that revealed and did not conceal the fraud.' Here the record is replete with evidence of acts of concealment.

It is argued that the charge is absurd, as no one could have known in 1948 and 1949 that there would be a congressional investigation in 1951 and a grand jury inquiry in 1952. But these appellants must have known from the outset that the success of their enterprise was in real danger at all times, especially while the files of the taxpayers remained open, cf. United States v. Kissel, 218 U.S. 601, 31 S.Ct. 124, 54 L.Ed. 1168; Fiswick v. United States, 329 U.S. 211, 67 S.Ct. 224, 91 L.Ed. 196, and that any suspicious entry or report found by one of the men in the government intelligence service might touch off an investigation. It was not necessary that the conspirators should know in advance precisely what contingencies would arise, in order to agree as to how they would deal with all possible contingencies which appeared likely to have the results which the conspirators sought to avoid. Cf. United States v. Perlstein, 3 Cir., 126 F.2d 789, certiorari denied 316 U.S. 678, 62 S.Ct. 1106, 86 L.Ed. 1752; United States v. Siebricht, 2 Cir., 59 F.2d 976.

Admission on Redirect of Prior Consistent Statements by Davis

Another error urged in common by the three appellants relates to testimony by Davis on his redirect examination that in March of 1952 he had told his attorney the facts concerning the $100,000 and $60,000 payments to Grunewald and had authorized his attorney to communicate the statement hypothetically to the United States Attorney.

The cross-examination of Davis had covered a wide field. Perhaps the most effective impeachment had to do with his indictment in April 1954 for tax evasion based upon an alleged failure to report $160,000 as taxable income in 1948 and 1949. This exposed a motive to fabricate his testimony concerning the payments to Grunewald, as a means of shielding himself from conviction of a tax fraud in connection with these same moneys. It was also brought out that he had pleaded guilty to an indictment for conspiracy, was awaiting sentence and was hopeful that he would receive consideration for his cooperation with the government and for his testimony. Much was made of the conspiracy plea also, on the theory that Davis might have entered such a plea to avoid automatic disbarment under New York law. And finally, the tax evasion feature was made more probable when he admitted that in 1953 his wife had sued him claiming that he held $125,000 in cash as a joint tenant with her. As no indictments had been found against Davis in 1952 and the suit by his wife had not yet been brought, the testimony of his statement to his attorney, to which objection was made, was proffered and received on the theory that the jury might find that it was made at a time when the motive to falsify did not exist, and give it such weight as it might be entitled to receive on the question of his credibility.

The argument is made that this was no more than an attempt by Davis to make some sort of a bargain with the government in 1952 and that his motive to falsify was no less operative at that time than on the trial. But this is mere contention, appropriate enough in summation to a jury, but insufficient to form a basis for the rejection of the testimony as matter of law. Otherwise, it would never be proper to rehabilitate a witness by proof of prior consistent statements in cases where numerous impeaching circumstances were shown to exist at the time of the trial but where there may be found a theoretical possibility that the witness might have been motivated by one of them at the time of making the prior consistent statement. It is well established law in this circuit that in such cases the prior consistent statements may be received. Di Carlo v. United States, 2 Cir., 6 F.2d 364; Gelbin v. New York, N.H. & H.R. Co., 2 Cir., 62 F.2d 500.

It is theoretically possible that in 1952 Davis might have seen breakers ahead and felt it in his interest to sound out the government reaction to his hypothetical statement. But it is scarcely probable that he foresaw his wife's suit for her alleged share of $125,000 in cash or his own indictment for tax evasion of $160,000, or the effect on his possible disbarment of a plea to an indictment which had not yet been found against him.

The principle involved is that where the circumstances are such as to leave it reasonably possible for the jury to say that the prior consistent statements did in fact antedate the motive disclosed on the cross-examination, the court should not exclude them. Di Carlo v. United States, supra. Here we think there was ample basis for such a finding.

On the oral argument particular stress was laid upon the fact that Davis' lawyer was only authorized to repeat the statement hypothetically. We were told that this differs widely from a prior statement of fact to the same effect as his testimony given on direct examination. But we need not pass on this as the statement made to his attorney was not hypothetical in form but a plain statement of actual fact. This was admissible, nor does it become any the less so because the authority to repeat it was confined to mere hypothesis.

Bolich's Appeal

Bolich's appeal raises certain additional questions which do not affect the other two appellants. The first of these is whether the acts alleged and proved constituted two offenses, as charged, or one, as the appellant contends. The point was raised at the trial by motion to compel an election, which was denied.

The government, in support of the conviction, argues that proof of official employment, an element of the crime charged in Count 2, is not an element of that charged in Count 1. Both statutes under which Bolich was indicted, tried, and convicted make it a crime to 'conspire * * * to defraud the United States.' One of these statutes, 18 U.S.C. § 371, applies to all persons; the other, 26 U.S.C. § 4047(e)(4), applies specifically to 'every officer or agent appointed and acting under the authority of any revenue law of the United States * * *.' This question has been considered by the Supreme Court in Albrecht v. United States, 273 U.S. 1, 47 S.Ct. 250, 71 L.Ed. 505 and again in Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct. 180, 76 L.Ed. 306. In both cases the test applied to determine whether the defendant was being subjected to double punishment was 'whether each provision requires proof of an additional fact which the other does not.' Blockburger v. United States, supra, 284 U.S. at page 304, 52 S.Ct. at page 182. In the case at bar, it is true, as the government contends, that proof of a violation of 371 of Title 18 of U.S.C., charged in Count 1, will not prove a violation of § 4047(e)(4) of Title 26 of U.S.C., charged in Count 2, which requires proof of the additional fact of official employment. But it is no less true that guilt under Count 2 of necessity means that guilt under Count 1 has been proved, and, consequently, the test laid down by the Supreme Court has not been met.

The function of this test, however, is not to create a harmonious body of penal law, desirable though that is, but to protect defendants from being punished twice for having committed a single crime. Hence the rule is that a defendant may not be heard to complain because he has been convicted and sentenced to prison under two separate statutes for having committed a single offense, if the prison terms are to run concurrently. Hirabayashi v. United States, 320 U.S. 81, 85, 63 S.Ct. 1375, 87 L.Ed. 1774; Brooks v. United States, 267 U.S. 432, 441, 45 S.Ct. 345, 69 L.Ed. 699. Since the prison terms to which Bolich has been sentenced are to run concurrently, they may stand. This does not completely answer the double punishment argument, however, because Bolich was also fined under both statutes. On the foregoing reasoning, only one of these may be permitted to stand, and the question now becomes which one.

In this situation, the problem of which statute governs can sometimes be resolved by reference to legislative intent. For example, Congress having enacted legislation dealing specifically with atomic espionage after careful weighing of relevant considerations may conceivably be thought to have intended its new pronouncement to supersede, to the extent of overlap, its previous, more general enactment relating to espionage. See Note, 54 Col.L.Rev. 219, 252 (1954).

This approach is not feasible in the instant case because here the specific provision antedates the general one and imposes the lighter sanction of the two. It may be that persons who have undertaken the trust and responsibility of enforcing a particular law should not because of that undertaking be subjected to a severer punishment for an infraction of that law than any one of the public at large who is, of course, under a duty to obey the laws of the land. But surely no justification or reason can be found for treating the infraction of the public official more leniently than an otherwise identical infraction by a non-official. Moreover, any invocation of legislative intent can only be the grossest sort of fiction where, as here, we have no legislative history to guide us.

There is then no rational basis for determining that one of the two statutes in question applies to the defendant's conduct and the other does not. Both are undoubtedly valid and subsisting. All that we can and do determine is that both statutes can not validly apply in so far as their application operates to produce cumulative punishment. Since both fines, therefore, cannot stand, the smaller of the two is set aside.

Bolich's brief makes two other points, one relating to evidence and the other to the instructions to the jury, neither of which has any merit and which may, therefore, be disposed of briefly. The testimony of both Everett Harding and Daniel Olsen, relating respectively to hotel records of charges to Bolich and to carpentry work done in Bolich's home, was properly admitted since the testimony of these witnesses, together with the other proofs referred to supra, tended to support the allegation that a continuing agreement to conceal was part of the single, integrated conspiracy entered into by appellants and their co-conspirators.

The court was correct in charging that the propriety of the decisions not to prosecute the taxpayers criminally were not in issue. United States v. Manton, 2 Cir., 107 F.2d 834, 845-846. Nor was it error to instruct the jury that they might, if they chose, believe the testimony of the co-conspirators or accomplices. Bosselman v. United States, 2 Cir., 239 F. 82; United States v. Rosenberg, 2 Cir., 195 F.2d 583, certiorari denied Sobell v. United States, 344 U.S. 838, 73 S.Ct. 21, 97 L.Ed. 652. The charge upheld in the Rosenberg case, supra, also contained the statement-- to which appellants here take particular exception-- that without such testimony many cases could not be proved. If perhaps this last was unnecessary, it was certainly not prejudicial error, for we can find no basis for the supposition that the jury might have interpreted it as a limitation on their freedom to reject the testimony in the instant case if they thought it unworthy of belief nor, indeed, as anything but the statement of fact that it is.

Halperin's Appeal

On cross-examination, the prosecutor was permitted to ask Halperin, over his objection, whether he had invoked his constitutional privilege against self incrimination before the Grand Jury in response to the same or similar questions in response to which he had testified fully on the trial. Raffel v. United States, 271 U.S. 494, 46 S.Ct. 566, 70 L.Ed. 1054, resolved the issue thus raised in favor of permitting such questioning and we have nothing to add to what has already been written on the subject by this court in United States v. Gottfried, 2 Cir., 165 F.2d 360, 367, and note 18, and the cases there cited.

As a corollary to the plea for reversal because of the cross-examination on the subject of Halperin's assertion of his constitutional privilege against self incrimination before the Grand Jury, counsel for Halperin contends that it was serious and clearly prejudicial error for the trial judge to refuse to instruct the jury that 'an innocent man may honestly claim that his answers may tend to incriminate him.'

There is no doubt that this statement is true enough standing by itself; and counsel claim that it has a peculiar relevancy here, because Halperin in his testimony at the trial denied any guilty conduct whatever. When he refused to answer certain questions propounded to him before the Grand Jury, he told the Grand Jurors that he was innocent of any wrongdoing, and explained at one time that he did so because he had no right to cross-examine witnesses before the Grand Jury, and later that he had been advised by his counsel to refuse to answer questions. Against this background, we are told, it was the duty of the trial court, when requested to do so, to explain to the jury that 'an innocent man may honestly claim that his answers may tend to incriminate him.'

But a scrutiny of the instructions to the jury, when considered as a whole, makes it perfectly plain that the argument is based not upon the substance of Halperin's rights, but upon the colorful and appealing phraseology of the request as submitted. And this is more or less of a commonplace occurrence, especially in criminal cases, where emotional appeals and a certain amount of old-fashioned oratory are legitimate. There is necessarily a wide range of discretion vested in the trial judge, who must clearly and accurately state the rules of law by which the jury is to be guided in its deliberations, whilst at the same time avoiding confusion and the distraction of matters likely to lead the jury away from the issues they are called upon to decide. Quotations from law books and from the opinions of appellate courts frequently cause a certain amount of confusion and distraction, despite their accuracy in the context in which they are written. Accordingly, it is well settled that it is not error to refuse to instruct in the language submitted by counsel, if the charge correctly states the law applicable to the case. Sugarman v. United States, 249 U.S. 182, 185, 39 S.Ct. 191, 63 L.Ed. 550; United States v. International Fur Workers Union, 2 Cir., 100 F.2d 541, 546, certiorari denied 306 U.S. 653, 59 S.Ct. 642, 83 L.Ed. 1051.

What the trial judge was called upon to do under the circumstances of this case was to instruct the jury that Halperin had a right to refuse to answer the questions propounded to him before the Grand Jury, that his having done so could not be considered as any proof of guilt of the crimes charged against him, and that such evidence had been received and was to be considered by the jury only for the purpose of ascertaining the weight the jury chose to give to his testimony in his own defense at the trial. And this is precisely what the trial judge did, in clear and unmistakable terms.¹ The request to charge as submitted added nothing to this, and was properly denied. Moreover, Halperin was in no way restricted or circumscribed in his explanation, given on his redirect examination, of why he had previously claimed his privilege.

Counts 5, 6 and 7

From the time in June, 1950, when 'the Glovers' refused to accede to Grunewald's 'fee' of $175,000 to $200,000 the conspirators were in constant touch with one another. In September, 1950, Bolich employed a carpenter to construct a hiding place in his home for secret Washington papers. In December, 1951, when the Sub-Committee of the House Ways and Means Committee, known as the King Committee, subpoenaed the Washington Hotel records, which would show Bolich's occupancy with Grunewald, under the name of Harry Woodring, Bolich falsely denied to Harding, the hotel manager, that he had ever taken those records. Halperin made repeated trips to Washington to see Grunewald during 1950, 1951 and 1952; and time and again from 1948 through 1952 Halperin refused to divulge Grunewald's name to any of the taxpayers or their accountants.

For a time, despite prolonged questioning of the taxpayers and various members of the conspiracy it looked as though a combination of equivocation and silence might succeed in covering up the operations of the conspirators. But the break came when an inadvertent statement by Mrs. Marjorie Segel, one of the Pattullo Modes stockholders, led to the discovery of the false affidavit by their accountant Smith, which had been submitted in support of the voluntary disclosure claim. This led to Smith's arrest on August 30, 1951.

In February, 1952, a Grand Jury was empaneled in Brooklyn to investigate violations of the Internal Revenue Laws and their administration and enforcement. We need not pursue the details as the investigators followed the scent.

Count 5 of the indictment charges Halperin with having, on March 15, 1952, aided and abetted Davis, Hoffman and Schopick in corruptly endeavoring to induce Morton Marks, another of the Pattullo Modes stockholders, to give false testimony or to withhold the truth from the Brooklyn Grand Jury. Counts 6 and 7 make similar charges against Halperin with reference to attempts on March 15 and March 18, 1952, to induce Louis M. Berman and Monroe Tobias, connected with Gotham Beef Co., to falsify or withhold information from the same Grand Jury.

Halperin claims that the evidence is insufficient to sustain the verdict against him on each of Counts 5, 6 and 7.

In the early part of March, 1952, the Pattullo Modes taxpayers consulted new counsel and, after some difficulty, Davis succeeded in obtaining an interview with Morton Marks, who was about to testify before the Grand Jury. The conversation was:

'Davis: Morton, what are you going to do? * * * Are you going to talk?

'Marks: I am going to do what my counsel advises us.

'Davis: Well, you can't talk. You would be crazy to talk. * * * Morton, are you going to turn me in?'

Davis gives a slightly different version and fixes the date at about March 8, or 9 or thereabouts.

This was a plain obstruction of the Grand Jury proceedings and an improper tampering with the witness. And there is sufficient connection with Halperin to justify his conviction under Count 2.

Davis testified to a prior conversation in February, 1952, at which Halperin, Schopick and Hoffman were present, where the subject of the testimony of the taxpayers before the Grand Jury came up. The substance of the talk was, 'All of us felt that the clients would not talk and would plead their constitutional privilege.'

The conversation apparently relied upon by the prosecution, which can only be understood in the light of what had previously taken place, was in March and immediately prior to the visit of Davis to Marks, as above described. With the same persons present Davis testified that he reported to the others that he felt that the taxpayers 'were going their own way, their separate ways,' and 'they (Halperin, Hoffman and Schopick) said that I should nevertheless try to communicate with Mr. Marks.'In the welter of corruption with which this record is replete, we think the jury was justified in drawing the inference that what Davis did when he saw Marks was precisely what Halperin and the others intended him to do, when they all agreed that Davis should try to see Marks.

The evidence adduced in support of Counts 6 and 7 describes attempts by Halperin himself to influence both Berman and Tobias. The substance of what Halperin said to both is reflected in the testimony of Berman that Halperin told him 'he felt he was going to stand on his constitutional rights and not do any talking. He wanted me to take the same stand, that I should not talk and stand on my constitutional rights. He mentioned the fact that he had done me a good turn and that was the least I could do for him.'

It is immaterial that Halperin did not ask these witnesses to tell deliberate falsehoods. The whole tenor of the conversations, which took place after the Pattullo Modes taxpayers had talked freely with government investigators, was that of impeding justice and maintaining secrecy with respect to the operations of the conspirators. Moreover, it is nothing short of fantastic to suggest that this is no more than legitimate advice by a lawyer to a client, for the client's own protection.

As there was ample proof that Halperin knew these witnesses were expected to testify before the Grand Jury the trial judge correctly charged the jury that tampering with potential witnesses was within the meaning of the statute, which makes it a crime to 'corruptly * * * (endeavor) to influence, intimidate, or impede any witness, in any court of the United States * * *.' 18 U.S.C. § 1503.

It is now and has long been established that the law protects the integrity of the entire judicial process, of grand jury proceedings, as well as trials. Davey v. United States, 7 Cir., 208 F. 237, certiorari denied231 U.S. 747, 34 S.Ct. 320, 58 L.Ed. 464. The connotation of 'witness' is similarly determined with a view to substance, rather than form and hence any one who 'knows or is supposed to know material facts, and is expected to testify to them, or be called on to testify * * * is a witness.' Odom v. United States, 5 Cir., 116 F.2d 996, 998, reversed on other grounds 313 U.S. 544, 61 S.Ct. 957, 85 L.Ed. 1511; Walker v. United States, 8 Cir., 93 F.2d 792.

Accordingly, the convictions of Halperin under Counts 5, 6 and 7 must stand.

We have also considered the claim of variance and miscellaneous other points raised by the several appellants with respect to allegedly erroneous rulings. There is no merit in any of these contentions and we think it unnecessary to discuss them.

Affirmed except as to the $5,000 fine against Bolich.

FRANK, Circuit Judge, dissenting (solely as to the defendant Halperin).

Except as to Halperin, I concur. I would grant him a new trial. His plight presents a most important problem of principle relative to the constitutional privilege against compelling an accused person to be a witness against himself. I disagree with my colleagues' solution of that problem.

Before a grand jury,1 Halperin had refused to answer questions, on the basis of his anti-self-incrimination privilege. No one doubts that he then properly asserted the privilege. At his subsequent trial, he took the stand and, on direct examination, answered the same or similar questions put to him by his lawyer. The prosecutor, on cross-examination, then asked Halperin whether, at the grand jury hearing, he had not refused to reply to such questions. Over Halperin's objections, the trial judge required Halperin to admit that he had. Later the trial judge instructed the jury that that refusal before the grand jury must not be considered as proof of his guilt, but that the jury might properly consider it as affecting the credibility of his other testimony at the trial. Judge Medina's opinion-- citing Raffel v. United States, 1926, 271 U.S. 494, 46 S.Ct. 566, 70 L.Ed. 1054, and decisions of this court based on Raffel-- holds that the trial judge did not err in over-ruling those objections and in giving this charge. I cannot agree.

At first glance, Raffel may seem to sustain my colleagues' ruling. But I disagree with that ruling, because I think (1) Raffel was wrong and that the Supreme Court has over-ruled it, (2) Raffel does not apply to the facts here, and (3) in any event, the very recent trend of Supreme Court decisions concerning the privilege requires our court no longer to follow Raffel.

1. In Raffel, on a first trial, a government agent testified to an admission by the accused, who relying on his privilege, did not offer himself as a witness. The jury did not reach a verdict. On a second trial, the government agent gave similar testimony. The accused now took the stand and denied making the admission. Over objection, he was compelled to testify that, on advice of counsel, he had not testified at the first trial. The Supreme Court held this was not error, despite the statute (now 18 U.S.C.A. § 3481) which provides that an accused, at his own request, may be a witness at his trial but that 'his failure to make such a request shall not create any presumption against him.' The Court said that Raffel's previous silence constituted some evidence of inconsistency with his denial, at the second trial, of the admission to the agent, and therefore bore on the credibility of that denial. The Court concluded that to require Raffel to tell the jury of his silence at the first trial did not violate his privilege against self-incrimination, since, by electing to testify at the second trial, he completely waived the privilege.²

In 1926, soon after the Raffel decision, Hinton, a noted and sagacious commentator, severely criticized it as follows:³ 'It may be easy enough as a matter of theory to distinguish between the prohibited use of the defendant's former silence as an implied admission to prove guilt and the negative use of the same fact for the sole purpose of discrediting his testimony, but is it possible to make it work in practice? In the case of a mere witness it is undoubtedly permissible to cross-examine as to any inconsistency between his present testimony and his former statements or conduct. His former silence may discredit his present testimony, and it is assumed that a jury can be made to understand that reasons for doubting or refusing to credit his testimony are not to be taken as proof of a contrary state of fact, just as prior contradictory statements may be used to discredit without violating the hearsay rule. In such a case the prior statement is not received to prove the truth of the facts therein asserted, but merely to detract from the credit of the later statement. But where the defendant is the witness such a refinement seems impracticable, if not impossible. In the ordinary case where a defendant has made express or implied admissions and later testifies, such admissions may be used both to prove his guilt and to disprove his testimony, and hence no difficulty arises. The jury are entitled to make all logical uses of the evidence. In the actual case (i.e. Raffel's case) the silence of the defendant at the first trial must be taken as an implied admission of the truth of the adverse testimony, otherwise there would be no inconsistency with his present testimony and no discredit. But the federal statute, which certainly applied when he failed to testify, clearly prohibits its use to sustain the charge. It is doubtful whether a trained judge could actually make a purely negative use of such an implied admission. If he thought the inconsistency sufficient to refuse credit to the testimony, it is unlikely that he could avoid being influenced by it in his final conclusion. Certainly it is inconceivable that the average untrained jury could successfully perform such a feat of mental gymnastics. If it is practically impossible to limit the effect of the evidence, then it would seem that the policy of the statute ought to exclude it altogether.'

Hinton's analysis may be restated thus: (a) Impeachment of a witness' testimony by proof of an earlier statement is justified only where there is 'self-contradiction,' 'a real inconsistency' between that earlier statement and that testimony. 3 Wigmore, Evidence, Section 1040. (b) An earlier inconsistent statement may be implied, i.e. derived from the witness' earlier silence: His 'failure to assert a fact when it would have been natural to assert it, amounts, in effect, to an assertion of the non-existence of the fact.' 3 Wigmore, Section 1042. (c) The earlier silence of the accused may, then, properly be used to impeach his sworn statement, at the trial, of his innocence, only if the earlier silence amounted to an implied admission of his guilt. (d) But the Fifth Amendment and the federal statute (now 18 U.S.C. § 3481) forbid the proof of such silence, as inferred evidence of guilt, when that silence rested on the exercise of the constitutional privilege.

Hinton was surely correct in saying that a jury will not be able to heed the judge's cautionary charge that such evidence must be given effect solely in its bearing on the credibility of the accused. Like many other sorts of cautionary instructions, it asks the jury to do the well-nigh impossible. In Nash v. United States, 2 Cir., 54 F.2d 1006, 1007, Judge Learned Hand wrote of 'the recommendation to the jury of a mental gymnastic which is beyond, not only their powers, but anybody's else'; in United States v. Gottfried, 2 Cir., 165 F.2d 360, 367, he said, 'nobody can indeed fail to doubt whether the caution is effective * * *'; see also his remarks in United States v. Delli Paoli, 2 Cir., 229 F.2d 319. In United States v. Antonelli Fireworks Co., 2 Cir., 155 F.2d 631, 656, dissenting opinion, it was noted that a cautionary instruction may emphasize the very matter the jury is told to forget, 'as in the story, by Mark Twain, of the boy told to stand in a corner and not think of a white elephant.' Mr. Justice Jackson, concurring in Krulewitch v. United States, 336 U.S. 440, 453, 69 S.Ct. 716, 723, 93 L.Ed. 790, observed: 'The naive assumption that prejudicial effects can be overcome by instructions to the jury * * *, all practicing lawyers know to be unmitigated fiction.' It 'is well enough,' said Wigmore (8 Wigmore, p. 416), 'to contrive artificial fictions for use by lawyers, but to attempt to enlist the layman in the process of nullifying his own reasoning powers is merely futile, and tends towards confusion and disrespect for the law's reasonableness.' In United States v. Paoli, supra, Judge Hand referred to such an instruction as a 'placebo.' Fletcher, Morals and Medicine (1952) 51-52, calls a 'placebo' or 'bread pill' a 'medicinal lie' which undermines 'a truly moral relationship between physician and patient'; it 'encourages the idea * * * that drugs will cure most ailments and this serves to extend the patent-medicine evil.' Similarly, such a cautionary instruction is a kind of 'judicial lie': It undermines a moral relationship between the courts, the jurors, and the public; like any other judicial deception, it damages the decent judicial administration of justice.

Hinton's criticism of Raffel, made in 1926, has even greater pertinence today. For in recent years the public, from which jurors are drawn, has 'been told in every headline, on the authority of prominent legislators, that silence (based on the constitutional privilege) means guilt';⁴ in Emspak v. United States, 349 U.S. 190, 75 S.Ct. 687, 690, 99 L.Ed. 997, the Court noted that 'in these times a stigma may somehow result from a witness' reliance on the Self-Incrimination Clause * * *.' Several state courts have disagreed sharply with the reasoning on which Raffel rests and with its conclusion, see e.g., State v. Conway, 348 Mo. 580, 585-589, 154 S.W.2d 128.

2. In 1943, some seventeen years after Raffel, the Supreme Court, in deciding Johnson v. United States, 318 U.S. 189, 63 S.Ct. 549, 553, 87 L.Ed. 704, pretty obviously took cognizance of the criticisms levelled at Raffel. In Johnson, the defendant, indicted for wilful evasion of payment of income taxes for the years 1936 and 1937, at his trial testified on his own behalf. When the prosecutor, on cross-examination, asked a question about defendant's income, from illegal sources, in 1938, the defendant asserted his Constitutional privilege; the trial judge ruled that defendant need not answer that particular question, and defendant then refused to do so. The prosecutor, in his summation, commented on this refusal to answer concerning the 1938 income as showing the falsity of defendant's testimony about his 1936 and 1937 income. The trial judge charged the jury that defendant's refusal to answer the particular question concerning 1938, 'may only be considered by you in testing his credibility.' The Supreme Court said that, although the attempted inquiry as to 1938 called for evidence which was undeniably relevant, yet it was error for the prosecutor or the trial judge to refer to defendant's refusal to answer the question, even for the limited purpose of impeaching his credibility. The Court said: 'The ruling of the court gave the petitioner the choice between testifying and refusing to testify as to his 1938 income. An accused having the assurance of the court that his claim of privilege would be granted might well be entrapped if his assertion of the privilege could then be used against him. His real choice might then be quite different from his apparent one. In this case it would lie between protection against an indictment for 1938 and the use of his claim of privilege as evidence that he did in fact receive the income during the last two months of 1937. Elementary fairness requires that an accused should not be misled on that score. If advised by the court that his claim of privilege though granted would be employed against him, he well might never claim it. If he receives assurance that it will be granted if claimed, or if it is claimed and granted outright, he has every right to expect that the ruling is made in good faith and that the rule against comment will be observed. * * * The problem here is * * * whether a procedure will be approved which deprives an accused on facts such as these of an intelligent choice between claiming or waiving his privilege. Knowledge that a failure to testify though permitted by the court would be submitted to a jury might seriously affect that choice. If the accused makes the choice without that knowledge, he may well be misled on one of the most important decisions in his defense.'⁵

In so ruling, the Supreme Court, in effect, I think, overruled Raffel. The sole difference between the Raffel and Johnson cases is this: In Raffel, the privilege had been successfully asserted in a previous trial; in Johnson, the successful assertion of the privilege occurred in the same trial. This difference seems to me so impalpable that we cannot reasonably say, I think, that the Johnson case kept the Raffel decision alive. Significantly, the government in its brief in the instant case does not refer to the Johnson case, although defendant had made much of it in his brief.

3. In United States v. Klinger, 2 Cir., 136 F.2d 677, this court held the Johnson case rationale inapplicable to facts like those here; and it is true that Halperin's case, like Klinger's, differs from both Johnson and Raffel in this respect: Halperin (like Klinger) asserted his privilege not at a previous trial or at the same trial but pre-trial, i.e. before indictment, in the grand jury's presence. However, the rationale of the Johnson decision becomes stronger, not weaker, in such circumstances. For a man in a grand jury hearing may have far better reasons for preserving silence: There he is not confronted with the adverse witnesses, has no opportunity to cross-examine them, cannot object to the reception of evidence which would be incompetent at a trial,⁶ is unable to call witnesses on his behalf, has no counsel to advise him, must submit to a secret and ex parte examination 'without the presence and control of a judge or any other impartial official, to * * * intervene * * * to protect' him.⁷ As Judge Learned Hand said in 1953, 'Save for torture, it would be hard to find a more effective tool of tyranny than (this) power of unlimited and unchecked ex parte examination.'⁸

Accordingly, even apart from the effect of the Johnson case, the Raffel doctrine is inapposite here: In Raffel, the defendant at his first trial had the same opportunity as at his second trial to confront and cross-examine the adverse witnesses, to be assisted by counsel, to object to incompetent evidence, to summon witnesses on his behalf, etc., etc. Nor should we forget that the constitutional privilege had its English origin in protests against questioning persons, ex parte and in secret, before they had been formally charged with any crime.⁹ It is noteworthy that the Supreme Court has never applied the Raffel doctrine to a case where the previous exercise of the privilege occurred in a grand jury hearing.

If it be urged that the foregoing lacks significance here because Halperin is himself a lawyer, the short answer is the wise old adage that a lawyer who acts for himself has a fool for a client. Moreover, Halperin, on redirect, explained as follows why he had availed himself of the privilege in the Grand Jury hearing: Schopick, Davis and Hoffman had told him they intended to 'make a deal for immunity' and would then testify at the Grand Jury hearing that he was implicated; they threatened that, if he testified otherwise, they would see that he was indicted for perjury. On advice of his lawyer, he relied on his privilege because of these threats, and because before the grand jury, he was not represented by counsel, and also would have no opportunity to cross-examine those who had threatened him in order to show they were lying.

By requiring Halperin to tell the jury that he had previously exercised his privilege, the trial judge put him in a predicament where he was virtually compelled to give such an explanation, since, if unexplained, it would count heavily against him. It will not do, then, to say that his opportunity to give the jury such an explanation cured the error. On the contrary, the need to explain served to illuminate the error; for the consequence of the error was that, in effect, the propriety of the previous exercise of his privilege turned on the jury's belief in his explanation. No one who legitimately exercises the constitutional privilege ought to be so placed that he must subsequently justify it to a jury.

In Klinger, 2 Cir., 136 F.2d 677, this court reasoned thus: (1) In Johnson, the Supreme Court said that it would be error to receive evidence of the defendant's assertion of his privilege at the same trial, unless the trial judge, when ruling that the defendant could remain silent in answer to a particular question, warned him that his silence could be used to impeach his credibility. (2) But, said this court, it would be irrational to require such a specific warning to a man asserting the privilege in a grand jury inquiry, since a witness before a grand jury need not even be warned that he has the anti-self-incrimination privilege.¹⁰ A sufficient answer is that, in Johnson, the Supreme Court did not rule that the defendant must be warned that his successful assertion of the privilege might be used against him, but that, absent such a specific warning, the exercise of the privilege could not later be used against him. So, in the instant case, the vice is that, absent such a warning at the time when he exercised his privilege at the grand jury hearing, the defendant was compelled at the trial to testify that he had thus previously exercised it.

Were this an ordinary civil case, involving no constitutional issue, I would, although disagreeing with them, feel constrained to follow our fairly recent Klinger decision, and our subsequent decision in United States v. Gottfried, 2 Cir., 165 F.2d 360, 367-- which cited and relied on Klinger-- as binding precedents in this circuit. But-- for reasons I have stated in detail in United States v. Scully, 2 Cir., 225 F.2d 113, 118-119-- I do not feel similarly constrained by our circuit's precedents, favorable to the government, in a criminal case, when I think them unjust or unreasonable.¹¹ Consequently, I would not here follow Klinger or Gottfried.

4. Even if I thought the Supreme Court had not in Johnson over-ruled Raffel, and even if I thought Raffel applied here, nevertheless I would disregard Raffel. For as this court has heretofore said, an inferior court like ours should follow, not resist, a new pronounced doctrinal trend in Supreme Court decisions when considering the precedential force of older Supreme Court decisions. See Perkins v. Endicott Johnson Corp., 2 Cir., 128 F.2d 208, 217-218; Judge Learned Hand in Picard v. United Aircraft Corp., 2 Cir., 128 F.2d 632, 636; Judge Parker in Barnette v. West Virginia State Board of Education, D.C., 47 F.Supp. 251, 252-253.

When the Supreme Court decided Raffel, that Court, some other courts, and many commentators-- following Bentham who decried all the privileges against testifying-- were manifesting a marked hostility to the constitutional privilege and were severely modifying its scope. See, e.g., A.L.I. Model Code of Evidence (1942) p. 130; 12 Cornell L.Q. (1927) 216; United States v. St. Pierre, 2 Cir., 132 F.2d 837, at page 847, 147 A.L.R. 240, dissenting opinion. But on May 23, 1955, the Supreme Court far more generously construed the pertinent part of the Fifth Amendment. See Quinn v. United States, 349 U.S. 155, 75 S.Ct. 668, 99 L.Ed. 964; Emspak v. United States, 349 U.S. 190, 75 S.Ct. 687, 99 L.Ed. 997; Bart v. United States, 349 U.S. 219, 75 S.Ct. 712, 99 L.Ed. 1016. In Quinn (349 U.S. 155, 75 S.Ct. 673), the Court said that the privilege, incorporated in the federal Bill of Rights in 1791, was as the Court had said in Twining v. State of New Jersey, 211 U.S. 78, 91, 29 S.Ct. 14, 53 L.Ed. 97 "generally regarded then, as now, as a privilege of great value, a protection to the innocent though a shelter to the guilty, and a safeguard against heedless, unfounded, or tyrannical prosecutions." The Court added, 'to apply the privilege narrowly or begrudgingly-- to treat it as an historical relic, at most merely to be tolerated-- is to ignore its development and purpose.' In Emspak (349 U.S. 190, 75 S.Ct. 690) the court, referring to the 'Self-Incrimination Clause,' spoke of the 'great right which the Clause was intended to secure * * *.'¹²

Another manifestation of a more generous treatment of the privilege appears in a recent opinion by Mr. Justice Harlan: In United States v. Noto, 2 Cir., 226 F.2d 953, 954, a majority of this court, in an opinion by Judge Medina, refused to modify a district court order fixing at $30,000 the bail of a defendant pending decision before trial under the Smith Act, 18 U.S.C. § 2385 on an indictment charging that the defendant had been a member of the Communist Party since 1946. One reason the trial judge had assigned for exacting the large amount of bail was that, on defendant's motion to reduce bail, he would not disclose his whereabouts or the nature of his employment from 1946 to 1951. The defendant contended that to penalize him for not revealing these facts was to infringe his privilege against self-incrimination. Judge Medina wrote: 'The claim of some infringement of defendant's constitutional rights under the Fifth Amendment is wholly without merit. It was defendant's choice to withhold information as to his background, which is always of significance in fixing bail.' Judge Clark dissented, saying in part that Judge Medina's opinion 'underestimates the force of (the defendant's) constitutional objection, which is that, while he may be allowed in form the benefit of the Fifth Amendment against self-incrimination, yet all the force of that great privilege is derogated by his facing confinement for resort to it.' Justice Harlan, as Circuit Justice, reversed and granted reduction of bail; see United States v. Noto, 76 S.Ct. 255, 257. Although he had dissented in Emspak, in his opinion in Noto's case he stated: 'No doubt a defendant's past history and activities are relevant circumstances to be considered in fixing proper bail. But it would seem that in fixing bail, as in a criminal trial, an unfavorable inference should not be drawn from the mere fact that the Fifth Amendment privilege has been invoked. Assuming that a court when fixing bail can consider the absence of information concerning a defendant's history, even though the absence results from a valid claim of the privilege, that should be a permissible consideration only to the extent that it bears upon the risk that the defendant will not be available for trial. * * * I think it not sufficient to argue that the burden of proof was on petitioner, for in the setting of this case that seems to me but another way of saying that petitioner could only escape high bail under pain of waiving his Fifth Amendment privilege.'

5. It may perhaps be suggested that the error here is 'harmless.' That suggestion cannot stand up, for two reasons: (a) The evidence against Halperin is not overwhelming. The jury could reasonably have acquitted him. (b) More important, if what I have said above is sound, the error here consisted of an invasion of a constitutional right. Such an error cannot be deemed harmless. See, e.g., United States v. Morgan, 2 Cir., 222 F.2d 673; Helton v. United States, 5 Cir., 221 F.2d 338, 342; Wrightson v. United States, 95 U.S.App.D.C. 390, 222 F.2d 556, 561.

6. In the background of cases like this, lies a question which I believe the Supreme Court has never squarely considered:¹³ The Fifth Amendment provides that the accused shall not be compelled to testify against himself. At the time of the adoption of that Amendment, it was well settled that, in a felony trial, the accused could not testify even if he desired to do so. Consequently, at that time and until 1878, a federal jury could not in fact, and would not, infer that the defendant's silence in any way indicated his guilt. In 1878, however, Congress enacted the statute (now 18 U.S.C. § 3481) giving the accused an election to testify. It has been generally assumed that such statutes embody a wise policy favorable to accused persons who are innocent. But we should note that, in many European countries (other than England), countries surely no less civilized than ours, the inability of the accused to testify still maintains, and that there the policy behind that rule has wide approval as protective of the innocent (See discussion in point II of the Appendix to this opinion). It is notable, too, that shortly after the enactment of the federal statute of 1878, Maury, a learned American lawyer, published an article which reasoned plausibly that this statute unconstitutionally invaded the Constitutional privilege.¹⁴

Perhaps the Supreme Court will not soon so hold. But I suggest that-- as Maury anticipated and as many experienced lawyers and judges have explained-- such a statute often has the effect of coercing a defendant into abandoning his privilege and thus frequently forces an innocent defendant to give testimony, on cross-examination, gravely damaging to his defense.¹⁵

For if he does not use his statutory option to testify, the jury will usually infer his guilt from his silence. In United States v. Bruno, 2 Cir., 105 F.2d 921, 923, 924, this court (per Judge Learned Hand)-- in holding that it was not error for the trial judge to refuse to charge the jury that they must make no such inference-- said that the advantage to the accused of such a charge is 'wholly illusory; and only serves to put before (the jury) what will generally harm the accused. * * *' Although reversing us, the Supreme Court-- Bruno v. United States, 308 U.S. 287, 60 S.Ct. 198, 200, 84 L.Ed. 257-- acknowledged, in effect, that such an admonition to the jury is 'psychologically futile,' since it is 'psychologically impossible not to have a presumption arise against an accused who fails to testify.' A New York Commission on the Administration of Justice said in 1930: 'It is undoubtedly the fact that juries do consider a defendant's silence as a circumstance against him, despite the limited admonitions of the trial judge.' An English commentator wrote in 1901, 'There can be no doubt that now almost everyone called to serve on a jury knows that a person can give evidence if he chooses, and every day, probably, juries look with growing suspicion upon accused persons who refuse to do so.'¹⁶ 'The number of defendants who fail to testify and who are yet acquitted must be almost negligible,' writes McCormick, Evidence (1954) 280.

Yet an innocent man may have good reason for not testifying. 'It is not everyone', said the Supreme Court in Wilson v. United States, 149 U.S. 60, 66, 13 S.Ct. 765, 766, 37 L.Ed. 650, 'who can safely venture on the witness stand though entirely innocent of the charge against him. Excessive timidity, nervousness when facing others and attempting to explain transactions of a suspicious character, and offenses charged against him, will often confuse and embarrass him to such a degree as to increase rather than remove prejudices against him. It is not everyone, however honest, who would therefore willingly be placed on the witness stand.' On that account, it was said, in State v. Cameron, 40 Vt. 555, 565-566: 'In the great body of cases no wise practitioner would permit his client, whether he believed him guilty or innocent, to testify when upon trial on a criminal charge. The very fact that he testifies as if with a halter about his neck, that he is under such inducement to make a fair story for himself, his character and his liberty if not his fortune and his life being at stake, is enough to usually deprive his testimony of all weight in his favor, whether it be true or false. This is the case even when his manner upon the stand is unexceptionable, while his critical condition often creates such apprehension and excitement that his manner is open to great criticism, and if he does make a misstep after voluntarily assuming the responsibility of testifying, it will naturally be construed strongly against him. In short, his testimony is far more likely to injure him seriously than to help him a little. It is true that a clear intellect and perfect self-possession may enable an unscrupulous rogue to run the gauntlet of a cross-examination and make something out of this privilege, and the same qualities will be still more likely to help an innocent man to some advantage from it, but the true application of the statute is only to those rare cases, when a word from the prisoner, and him only, will manifestly dispose of what otherwise seems conclusive against him.'

If an innocent man, coerced by the inference that will be drawn from his silence, does testify, he finds himself in a serious plight. For instance, the Supreme Court has held-- Reagan v. United States, 157 U.S. 301, 15 S.Ct. 610, 613, 39 L.Ed. 790-- that the trial judge may properly (and often indeed should) tell the jury that 'interest creates a motive for false testimony; that the greater the interest the stronger is the temptation; and that the interest of the defendant in the result of the trial is of a character possessed by no other witness, and is therefore a matter which may seriously affect the credence that shall be given to his testimony.'¹⁷

Wherefore, in Ruloff v. People, 45 N.Y. 213, 221-222, the court said: 'By statute (ch. 678 of the Laws of 1869) persons upon trial for crime may, at their own request, but not otherwise, be deemed competent witnesses. The act may be regarded as of doubtful propriety, and many regard it as unwise, and as subjecting a person on trial to a severe if not cruel test. If sworn, his testimony will be treated as of but little value, will be subjected to those tests which detract from the weight of evidence given under peculiar inducements to pervert the truth when the truth would be unfavorable, and he will, under the law as now understood and interpreted, be subjected to the cross-examination of the prosecuting officer, and made to testify to any and all matters relevant to the issue, or his own credibility and character, and under pretence of impeaching him as a witness, all the incidents of his life brought to bear with great force against him. He will be examined under the embarrassments incident to his position, depriving him of his self-possession and necessarily greatly interfering with his capacity to do himself and the truth justice, if he is really desirous to speak the truth. These embarrassments will more seriously affect the innocent than the guilty and hardened in crime. Discreet counsel will hesitate before advising a client charged with high crimes to be a witness for himself, under all the disadvantages surrounding him. If, with this statute in force, the fact that he is not sworn can be used against him, and suspicion be made to assume the form and have the force of evidence, and circumstances, however slightly tending to prove guilt, be made conclusive evidence of the fact, then the individual is morally coerced, although not actually compelled to be a witness against himself.'

It follows that, thanks to the statutory option, the accused is often confronted with this dilemma: He will be gravely disadvantaged if he does testify or if he does not. So much the more reason, then, for not making a further extensive inroad on the privilege, by augmenting the dilemma, in a case like Halperin's. For, if my colleagues' ruling stands, the accused, virtually coerced by the statutory option into testifying at his trial, will discover that, as an added result of so choosing, he must tell the jury that he had previously exercised his privilege as a witness before the grand jury.

7. There are those who assert that the Supreme Court's recent generous interpretation of the privilege does not accord with the history of its origin in England or in the American Colonies.¹⁸ It might be argued that these critics are in part correct: The English Puritans who fought against the oath ex officio were criminals (i.e., heretics); they feared that, were they compelled to tell the truth under oath, they would suffer at the hands of the High Commission.¹⁹ The leading American colonists who strenuously objected to general warrants were also criminals, i.e., engaged in smuggling violative of valid legislation. In all likelihood, the provision of the Fifth Amendment, which prohibits a man's compulsion to testify against himself, arose, like the Fourth Amendment's prohibition of unreasonable searches and seizures, from the experiences of those smugglers²⁰ (who regarded their smuggling as a 'natural right' justified by 'the Great Law of Nature and Reason,' as among 'the rights of man').²¹ The critics of the Supreme Court, however, in their over-emphasis on the history of the Fifth Amendment privilege, overlook the fact that a noble principle often transcends its origins, that creative misunderstandings account for some of our most cherished values and institutions; such a misunderstanding may be the mother of invention.²² Thus religious intolerance constituted a major factor in the development of modern doctrines of liberty.²³ 'The insane ages,' writes Gilbert Murray, 'have often done service for the sane, the harsh and suffering ages for the gentle and well-to-do.'²⁴ The Supreme Court's critics are guilty of the fallacy of 'reduction' (the 'nothing but' fallacy), akin to the evaluation of anything solely in terms of its ingredients (as in the case of the critic who described a Beethoven symphony as nothing but horses hair over cats' guts). 'If,' wrote Holmes, 'truth were not often suggested by error, if old implements could not be adjusted to new uses, human progress would be slow.'²⁵ So the Supreme Court in Weiler v. United States, 323 U.S. 606, 65 S.Ct. 548, 89 L.Ed. 495, adhered to the two-witness rule in perjury prosecutions for a rational reason while discarding the old irrational reason which originally supported it.²⁶

8. The foes of the privilege-- beginning with Bentham-- have mistakenly viewed it solely from a procedural angle; so considered, it seems to them an unjustifiable obstacle to the judicial ascertainment of the truth. They ignore the fact that the privilege-- like the constitutional barrier to unreasonable searches, or the client's privilege against disclosure of his confidential disclosures to his lawyer²⁷ -- has, inter alia, an important 'substantive' value, as a safeguard of the individual's 'substantive' right of privacy, a right to a private enclave where he may lead a private life.²⁸ That right is the hallmark of our democracy.²⁹ The totalitarian regimes scornfully reject that right.³⁰ They regard privacy as an offense against the state. Their goal is utter depersonalization. They seek to convert all that is private into the totally public, t