indictments against an aggregate of 91 defendants.
From the foregoing it appears to the Court that in the most literal sense the grand jury proceeding was one based upon or growing out of alleged violations of the Shipping Act. Possible violations of the Shipping Act were mentioned at many stages of the investigation.
However, the more important test, in view of the purpose of immunity provisions, is one of determining if the subject matter of the inquiry did in fact relate to Shipping Act violations. In an affidavit the special assistant to the Attorney General who was in charge of the proceeding states that he was concerned only with possible violations of 18 U.S.C. § 1001. The investigation may have indicated violations of Section 1001 more clearly than any Shipping Act provisions. However, I am satisfied that the subject matter of the inquiry was also closely related to possible violations of Sections 9, 40 and 41 of the Shipping Act, 46 U.S.C.A. §§ 808, 838 and 839.
The possible violations of Sections 9 and 41 can be considered together. Section 9 makes it a crime to transfer vessels to persons who are not American citizens, or to put such vessels under foreign registry or flag, without approval of the Commission. And Section 41 provides that whenever approval of the Commission is required by Section 9, it is a crime to make a false statement of a material fact in order to secure such approval.
The Government has taken the position here that Section 9 relates only to sales of vessels by private parties and not to misrepresentations in applications to purchase vessels from the Commission. However, as indicated above, the Government has consistently maintained in the libel actions that misrepresentations in an application to purchase vessels violated the provisions of Section 9. In those proceedings the Government has argued that Section 9 applies to a sale by the Commission to a private party, and that if misrepresentations were made in applications for the purchase of vessels, then the transaction must the deemed to have been made without the approval of the Commission and consequently the vessel is subject to forfeiture provisions of Section 9. This argument finds support in Meacham Corporation v. United States, 4 Cir., 1953, 207 F.2d 535, 537, 543, certiorari granted 1954, 347 U.S. 932, 74 S. Ct. 631. It is not necessary to consider the strength of the argument here. It is sufficient to realize that the subject matter of the inquiry related to possible violations of Sections 9 and 41.
Also, the subject matter of inquiry appears to be closely related to possible violations of Section 40, 46 U.S.C.A. § 838. Section 41 requires, among other things, that whenever certain documents are presented to the collector of customs to be recorded, the declarant shall file a statement setting forth facts relating to his citizenship status, and makes it a crime to make a false statement of a material fact in the statement. A bill of sale is one of the documents mentioned, and, as a matter of practice, the Commission gives a purchaser a bill of sale for each vessel at the time of the purchase, and the bill of sale is then taken to the collector of customs and the statement filled out. The statement, in the form prescribed by the Commission, requires the declarant to sign an affidavit that the purchaser of the vessels is a citizen of the United States. Certainly inquiry into alien control of purchasers and misrepresentations as to citizenship is quite as helpful for prosecution under Section 40 as it is for prosecution under 18 U.S.C. § 1001.
The Court is satisfied that the Government has acted in good faith and that the present indictment was not brought outside of the Shipping Act in order to sustain its argument that the immunity provision is not applicable. However, for the reasons stated, it is clear that the intentions of the prosecutor cannot be the test for the applicability of an immunity provision. Under the subject matter test the Court is satisfied that the immunity provision was applicable to the proceeding before which the defendants testified.
B. Are the Defendants Entitled to Immunity?
The question is whether the defendants, in the course of their testimony, made such disclosures as entitled them to immunity from the present prosecution.
Since the purpose of the immunity statutes is to make evidence available that otherwise could not be obtained, it is clear that the disclosures must be self-incriminatory. In effect the immunity is given in exchange for the self-incriminatory testimony. And since the scope for an immunity provision should be no broader than the protection afforded by the Fifth Amendment, the qualification has been added that the immunity extends only to prosecution for crimes substantially connected with the evidence given. Heike v. United States, 1913, 227 U.S. 131, 33 S. Ct. 226.
In the Heike case, Heike had been called before a grand jury investigating alleged violations of the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1-7, 15 note, in the sugar refining industry. The testimony did not earn him immunity, under the relevant immunity provision, on a subsequent indictment for a fraud on the revenue. The indictment charged a violation of the Internal Revenue Laws by the secret introduction of springs in scales to cause them to indicate less than the actual weight. Heike had given a table of annual sugar meltings at the monopoly investigation. The indictment was sustained and the conviction upheld on the ground that there was no substantial connection between the fraud and the testimony submitted to the grand jury. Mr. Justice Holmes noted that, the evidence 'did not tend to incriminate the witness. It neither led nor could have led to a discovery of his crime.' 227 U.S. at page 143, 33 S. Ct. at page 228.
The rule laid down by the Heike case was stated in the following language:
'When the statute speaks of testimony concerning a matter it means concerning it in a substantial way, just as the constitutional protection is confined to real danger, and does not extend to remote possibilities out of the ordinary course of law.' 227 U.S. at page 144, 33 S. Ct. at page 228.