James Edward Hanis v. United States

246 F.2d 781
CourtCourt of Appeals for the Eighth Circuit
DecidedOctober 11, 1957
Docket15674
StatusPublished
Cited by13 cases

This text of 246 F.2d 781 (James Edward Hanis v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
James Edward Hanis v. United States, 246 F.2d 781 (8th Cir. 1957).

Opinion

VAN OOSTERHOUT, Circuit Judge.

Defendant Hanis appeals from final judgment and sentence upon his conviction by a jury upon Counts I, III, V, VII, and IX of the indictment. Count. I, based upon conspiracy violative of section 371, Title 18 U.S.C.A., charged that defendants, Hanis and Graddy, commencing about January 1, 1953, and end *783 ing about June 1, 1955, did unlawfully, knowingly, and willfully conspire to commit offenses against the United States, to wit, to violate sections 51, 52, and 54 of Title 41, U.S.C.A., and that defendant McCabe joined said conspiracy about July 1, 1954. The indictment alleges that Westinghouse Electric Corporation, hereinafter called Westinghouse, was a prime contractor with the United States operating under fixed-price-reimbursable contracts with price-redetermination clauses, and that Hanis at all relevant times was employed by Westinghouse as an assistant buyer or a buyer. It is alleged that the purpose and plan of the ■conspiracy was that Hanis, in exchange for commissions, gratuities, and compensation paid him by Graddy and Mc-Cabe, would aid and assist companies in which his co-defendants were interested to obtain purchase orders and subcontracts from Westinghouse. Fifteen overt acts are alleged.

The other counts upon which Hanis was convicted charge substantive offenses in violation of sections 51, 52, and ■54 of Title 41 U.S.C.A., asserting that the property received by Hanis, as alleged in the various counts, was given to him to induce him to use his influence to obtain purchase orders from Westinghouse for his co-defendants’ companies. Count III charges Hanis with accepting from Graddy fifty shares of Products Engineering Corporation, Count V charges Hanis with accepting from Graddy sixteen and two thirds shares of Products Engineering Corporation, Count VII charges Hanis with receiving from Graddy an automobile, and Count IX charges Hanis with receiving from McCabe checks totaling about $65,450.80.

We are here concerned only with defendant Hanis’ appeal. Defendant Graddy pleaded guilty to certain counts including the conspiracy count. Defendant McCabe was acquitted upon all counts.

It is established by the evidence that during all times here material Westinghouse was a prime contractor, manufacturing jet engines for the United States Navy, an agency of the United States. This work was carried on pursuant to four contracts which provided that Westinghouse would be compensated upon the basis of cost plus nine per cent. A target price was estimated by the contracting parties, and, if the product was manufactured at a cost below the target price, Westinghouse would receive twenty cents upon each dollar saved, and if cost exceeded the target price, Westinghouse would be penalized upon the same basis. It is undisputed that during the period covered by the indictment Hanis was an employee of Westinghouse, serving first as an assistant buyer and later as a buyer.

Defendant Hanis, as grounds for reversal, urges in substance:

1. The indictment is fatally defective as to the conspiracy count and the substantive counts in that it fails to allege that Hanis knew his employer, Westinghouse, was operating under Government contracts providing for compensation upon a cost-plus basis.

2. The evidence is insufficient to sustain Hanis’ conviction upon any of the counts of the indictment in that there is no evidence that he had knowledge that his employer was a prime contractor with the Government with compensation determinable upon a cost-plus basis.

8. The court’s instructions are erroneous in that they did not require the jury to find that Hanis knew his employer was operating under Government contracts providing for compensation on a cost-plus basis, such knowledge being an essential element of the offenses charged.

4. The verdict on the conspiracy count convicting Hanis and acquitting McCabe is inconsistent within itself and also inconsistent with the substantive counts, and constitutes a prejudicial and fatal variance.

5. The contracts between the Government and Westinghouse introduced in evidence are incomplete in that certain amendments are missing, and hence the Government has not proved that the contracts were of the type required to make *784 -sections 51, 52, and 54, Title 41 U.S.C.A., applicable.

Hanis’ contention underlying asserted errors 1 to 3, inclusive, above set out, is that it is incumbent upon the Government, in order to sustain his conviction, to allege and prove that Hanis knew his employer was operating under Government cost-plus contracts. Hanis concedes in his brief that he was at all times here material a Westinghouse employee, and that he knew his employer was manufacturing jet engines for the United States under contract. Except for the contention made in asserted error' No. 5, which we will hereinafter consider, defendant Hanis does not seriously dispute the fact that the contracts between his employer and the Government provide for compensation upon a cost-reimbursable basis. There is abundant evidence to support the charge that Hanis received the substantial payments in money and property as alleged in the indictment from Graddy, McCabe, arid their companies, as a reward for placing Westinghouse purchase orders with them. Westinghouse was producing the jet engines for the Government under an emergency or crash program. Some materials needed for production were hard to get. Hanis, as an assistant buyer and buyer, had considerable discretion in the making of purchases of materials and in determining the prices to be paid therefor. There is substantial evidence that Hanis completed purchases of materials from his co-defendants’ companies at excessive prices. In many instances he told his co-defendants what price quotations to make. We shall not further develop the facts on this feature of the case as Hanis does not seriously challenge the sufficiency of the evidence to show that he received payments in exchange for his influence.

Hanis does vigorously contend that he had no knowledge of the terms of the contracts between Westinghouse and the Government, and he insists that such knowledge is an essential element of the offenses with which lie was charged. We do not believe that there is sufficient evidence to support a finding that Hanis had actual knowledge of the terms of the Goveniment-Westinghouse contracts. The contracts are in evidence and disclose that they were originally classified as “Confidential” and were so stamped, and that the confidential classification was not cancelled until March 1956, a date subsequent to the dates of the acts upon which the indictment is based.

We are, therefore, confronted with the vital question of whether knowledge by Hanis that the Government-Westinghouse contracts contained cost-plus-compensation features is an essential element of the substantive offenses and the conspiracy charged.

Section 51, Title 41 U.S.C.A., provides:

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246 F.2d 781, Counsel Stack Legal Research, https://law.counselstack.com/opinion/james-edward-hanis-v-united-states-ca8-1957.