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UNITED STATES v. STONE

September 15, 1969

UNITED STATES of America
v.
Andrew L. STONE, Francis N. Rosenbaum, Evelyn R. Price, Robert B. Bregman, Chromcraft Corp., ALSCO, Inc.



The opinion of the court was delivered by: GASCH

 GASCH, District Judge.

 The question before the Court is whether the Government must disclose records of intercepted telephone conversations in which one of the defendants in this case participated. *fn1" The exclusionary rule originating in Weeks v. United States, 232 U.S. 383, 34 S. Ct. 341, 58 L. Ed. 652 (1914), and applied to the states in Mapp v. Ohio, 367 U.S. 643, 81 S. Ct. 1684, 6 L. Ed. 2d 1081 (1961), excludes from a criminal trial any evidence seized from a defendant in violation of his Fourth Amendment rights. Fruits of such evidence may be excluded as well. Silverthorne Lumber Co. v. United States, 251 U.S. 385, 391-392, 40 S. Ct. 182, 64 L. Ed. 319 (1920). "Because the Amendment now affords protection against the uninvited ear, oral statements, if illegally overheard, and their fruits are also subject to suppression. Silverman v. United States, 365 U.S. 505, 81 S. Ct. 679, 5 L. Ed. 2d 734 (1961); Katz v. United States, 389 U.S. 347, 88 S. Ct. 507, 19 L. Ed. 2d 576 (1967)." *fn2" The exclusionary rule applies as well to violations of Section 605 of the Communications Act of 1934, *fn3" which prohibits the interception and divulgence of telephone conversations without the authorization of the "sender." *fn4"

 Hence whenever a defendant's conversations are illegally overheard, a suppression hearing must be held in order to determine whether the fruits of that illegal search contributed to the Government's case. Alderman v. United States, 394 U.S. 165, 180-185, 89 S. Ct. 961, 22 L. Ed. 2d 176 (1969), further held that the Government must disclose its surveillance records, or logs, of intercepted conversations to defense counsel where the activities of its agents are illegal so that the defendant may adequately prepare for the suppression hearing. *fn5" Thus the issue here narrows to whether wiretapping activities of the Federal Bureau of Investigation were illegal in the first instance, that is, whether they invaded defendant's Fourth Amendment rights or violated Section 605 of the Communications Act.

 The indictment charges Andrew Stone, Francis Rosenbaum, Evelyn Price, Robert Bregman and ALSCO, Inc., with conspiring to defraud the United States in the negotiation and administration of defense contracts under the general conspiracy statute, 62 Stat. 701, 18 U.S.C. § 371. From 1962 to 1967, defendant ALSCO, or its predecessor, Chromcraft Corporation, acted as the Government's principal supplier of rocket launchers for jet aircraft in Viet Nam. The Government alleges that Chromcraft, by its Chief Executive Officer Andrew Stone, entered into fraudulent contracts with the Department of the Navy totaling some $47,000,000 and diverted over $4,000,000 into personally-held Swiss bank accounts. In addition to the conspiracy charge, the Grand Jury indicted defendants under numerous counts for submitting fraudulent cost and pricing forms to the Navy Department, submitting false "RB-1 Reports" to the Renegotiation Board, *fn6" and receiving some $73,000 in "kick-backs" from a subcontractor, Western Molded Fibre Products, Inc. *fn7"

 In its pretrial Motion for Discovery and Inspection, defendants ask for "[any] electronic recordings of defendants' voices which were made as a result of investigations conducted by any agency of the Federal Government * * * during the course of any investigation resulting or contributing to the indictment in this case." *fn8" The Government responded: "[no] defendant was ever the direct subject of unlawful electronic surveillance, and no evidence obtained by electronic surveillance was ever utilized in the investigation of this case." The Government admitted that between 1956 and 1961, agents overheard conversations participated in by defendant Rosenbaum "during the course of electronic surveillances utilized by the Federal Government to gather foreign intelligence information pertaining to national security." But it claimed that the overheard conversations were "in no way relevant to this case." *fn9"

 This prompted motions by defendant Rosenbaum to produce and to suppress. In support of his motions, Rosenbaum attached an affidavit stating that he represented an official of the Government of the Dominican Republic from 1955 to 1958 and that since 1955 he has been an officer of and the legal counsel to a company partly owned by a former official of the Government of the Dominican Republic. He alleged that the company was "a principal subject of an investigation" by the FBI, and that between 1962 and 1964, FBI agents interviewed persons in his Washington law office in conjunction with the investigation. Rosenbaum, assuming the surveillances were illegal, moved for a hearing to ascertain the extent to which the Government's case had been tainted by the illegal evidence.

 The Government responded with an affidavit signed by Attorney General John Mitchell, a memorandum in opposition to defendant's motion to produce, and two sealed envelopes. One (Exhibit A) is represented as containing typewritten logs of all overheard conversations participated in by Rosenbaum, and the other (Exhibit B) contains authorizations for the surveillances signed by the Attorney General in office at the time.

 Attorney General Mitchell attested that on "various occasions" between 1956 and 1961, conversations involving Rosenbaum were overheard by Government agents who tapped telephone wires at three separate locations "solely for the purpose of gathering foreign intelligence information." He stated that it is apparent from the face of the sealed materials that Rosenbaum was not the "subject" of the surveillances and that the wiretaps "were being conducted to gather foreign intelligence information." Mr. Mitchell certified that it would "prejudice the national interest" to disclose publicly the "particular facts" concerning the surveillances and requested that the Court examine the logs in camera.10

 In Alderman v. United States, supra, the Court rejected the Government's argument that the logs of illegal surveillances should undergo an initial screening by the trial judge in camera to determine whether they are "arguably relevant" before they are turned over to defense counsel. The Government contended that there are many instances where a person is "accidentally" overheard by a wiretap or eavesdrop conducted for a different purpose, that this is often obvious from the face of the surveillance records, and that since disclosure prejudices the national interest, it should not be required unless the logs appear to have something to do with the case. The Court rejected the argument, stating that full disclosure is necessary because only the defense attorney "acquainted with all the relevant circumstances" can winnow irrelevant material from "those items which might have made a substantial contribution to the case against a petitioner." 394 U.S. at 182, 89 S. Ct., at 971.

 Turnover, however, is mandatory only where the surveillance is "illegal." In his concurring opinion in Giordano v. United States, 394 U.S. 310, 89 S. Ct. 1163, 22 L. Ed. 2d 297 (1969), Justice Stewart, speaking of the constitutionality of surveillances, emphasized that the Court has not yet decided whether a surveillance conducted for the purpose of gathering foreign intelligence information violates the Fourth Amendment. *fn11" And, he added, Alderman nowhere specifies the procedure a trial judge is to follow in making the preliminary determination of constitutionality. The entire Court in Taglianetti v. United States, 394 U.S. 316, 317, 89 S. Ct. 1099, 1100, 22 L. Ed. 2d 302 (1969), decided the same day as Giordano, made the same point in broader language:

 
"Nothing in Alderman v. United States, Ivanov v. United States, or Butenko v. United States, 394 U.S. 165, 89 S. Ct. 961, 22 L. Ed. 2d 176 requires an adversary proceeding and full disclosure for resolution of every issue raised by an electronic surveillance."

 The Court has examined the logs in camera to assist in its determination of the two principal questions of legality: (a) whether the Federal agents overheard the conversations by a means which violated defendant's Fourth Amendment protections, and (b) whether agents ...


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