People v. De Feo

284 A.D. 622, 131 N.Y.S.2d 806

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: July 1, 1954
• Status: Published

Opinions

Breitel, J.

De Feo, a witness before a Grand Jury, appeals from a determination holding him guilty of contempt (Judiciary Law, § 750, subd. A, par. 5), for having given evasive answers, tantamount to a refusal to answer, to legal and proper interrogatories (Matter of Finkel v. McCook, 247 App. Div. 57, affd. 271 N. Y. 636).

Of the contentions advanced on the appeal, two are substantial. The first is that the De Feo’s answers were not evasive,- and "therefore, not contemptuous or contumacious. The second is that De Fee’s privilege against being compelled to testify against himself was violated, and therefore, no proceeding for contempt may lie, his examination being invalid for all purposes.

It is our view that on these issues appellant should fail and that the order adjudicating De Feo in contempt should be affirmed.

Attention will first be directed to the content of the witness’ testimony. De Feo and his cousin, Martoccia, shared equally the ownership of a corporation, Cardinal Agency, Inc., which engaged exclusively in the brokerage of group insurance under union welfare programs. The corporation was organized in 1950 following the enactment in the prior year of the State’s Disability Benefits Law for the protection of employees. It prospered at a marked rate. For the fiscal years ending March 31st it had the following gross incomes:

1951 ...................... $75,000.

1952 ...................... 186,000.

1953 ...................... 295,000.

For the related calendar years the books of account recorded cash withdrawals for purposes described no more particularly than “ office expense ”, “ entertainment ”, “ travel ” and “ promotion ”, in the following gross amounts:

1951 ............... $28,724.03

1952 ............... 107,282.33

1953 ............... 34,492.00 (5 months)

The Grand. Jury was engaged in a “ John Doe ” investigation into alleged ‘ ‘ kickbacks ’ ’ or rebates of insurance premiums to labor union officials and others in the sale of insurance for the protection of union members. These acts would constitute violations of section 380 of the Penal Law and of sections 5 and 113 of the Insurance Law.

The scope of the questioning covered the cash withdrawals for the purpose of ascertaining whether they in fact were expended for the designated purposes or whether they, or a substantial part of them, were devoted to payment of “ bribes ” to union officials or others with influence in unions, or to persons connected with-insurance companies. Specific questioning was directed to the withdrawals of cash that represented rounded percentages of commission earnings and that occurred in close sequence to the receipt of such earnings.

In regard to none of the years could the witness give details of expenditures, whether of time, place, occasion or persons present. Despite the fact that these expenditures were the principal ones made by the corporation there were no detailed records or vouchers, and no details of distribution. The witness could merely recite a few names of persons entertained, a few places of entertainment involved, a few occasions for travel, but never in relationship, and always with the characterization of probability or even possibility and never with the assertion of certainty or reasonable degree of assurance. In instance after instance the witness offered his speculations as to events or expenditures, whether they were supposed to have occurred in an earlier year or in the last year. The technique was the not uncommon one of avoiding giving information and yet sidestepping the perils of perjury. This indeed is the essence of the technique of the evasive answer, which is tantamount to a refusal to answer, for which a proceeding to punish for contempt may lie. (Matter of Finkel v. McCook, 247 App. Div. 57, affd. 271 N. Y. 636, supra; United States v. McGovern, 60 F. 2d. 880, certiorari denied 287 U. S. 650; Schleier v. United States, 72 F. 2d 414; United States v. Appel, 211 F. 495.)

Lack of memory or poor memory in specific instances is understandable in any context of protracted examination concerning many transactions occurring over an extended period of time. Consistent lack of memory or recollection of all transactions for a recently passed period relating to large and significant expenditures covering a principal activity of a business is not understandable, except as a deliberate and contemptuous evasion of the questions put. This is particularly true when many of the cash withdrawals about which the witness was questioned were in three and four figure sums, some rounded and some not. And the situation is all the clearer when it is noted that the business involved was a two-man corporation with some office employees.

Of course, a different question from that involved here is one where the witness gives an explanation but an incredible one. Then the remedy, it has been said on occasion, is to be by prosecution for perjury, or none at all. (Blim, v. United States, 68 F. 2d. 484; Matter of Steingut v. Imrie, 270 App. Div. 34, revg. sub nom. Matter of Parsons v. Steingut, 185 Misc. 323.) But in the instant case the technique is not so much that of palpably false explanation, as it is that of no explanation. While it is true that as a practical matter it is difficult — even impossible — to give no explanation and still go through the form of answering questions, without injecting falsehoods, it is not out of the power of the court to apply its sanction, if indeed the witness successfully avoids answering by the evasive maneuver. (Matter of Finkel v. McCook, 247 App. Div. 57, affd. 271 N. Y. 636, supra; United States v. McGovern, 60 F. 2d 880. supra.)

In Matter of Finkel v. McCook, this court said (p. 63):

“ It is not our intention to hold, however, that all false swearing may be punished as a contempt. Where there is an issue as to the falsity of the testimony, the conflicting evidence should not be passed on in a contempt proceeding but should be left to the criminal proceeding, where the contemner is entitled to a jury trial. Sound public policy requires that the offender should be left to the criminal law.

“ There is a distinction between the untruthful statement which does not clearly appear to be such from the face of the record but is uncovered only with the aid of extrinsic evidence and testimony which is so plainly inconsistent, so manifestly contradictory and so conspicuously unbelievable as to make it apparent from the face of the record itself that the witness has deliberately concealed the truth and has given answers which are replies in form only and which, in substance, are as useless as a complete refusal to answer.”

Wherever one turns in an examination of De Feo’s testimony one is confronted with the simplest of formulas. He says in effect, whatever the corporation or I disbursed was for a business purpose, but 7 cannot tell when, where or to whom or for what as to any instance, whether it be a small sum or $2,000 in round figures. This amply meets the test of the decided cases and De Feo was properly found to have continuously and contemptuously given evasive answers to the questions put to him.

The second point raised by appellant is that he may not be prosecuted for a contempt because his testimony was elicited in violation of his constitutional privilege not to be compelled to testify against himself (N. T. Const., art. I, § 6). Until the enactment in 1953 of section 2447 of the Penal Law (L. 1953, ch. 891) it was clear that one who was required to testify before a grand jury concerning the acts of others, and in the process incriminates himself, has not had his privilege violated unless he first assert it and it is overruled. On the other hand, if the witness was examined concerning his own acts looking to a criminal prosecution against him for those acts, his privilege was violated, even though he fail to assert or claim his privilege. (People v. Gillette, 126 App. Div. 665; People v. Bermel, 71 Misc. 356; People v. Seaman, 174 Misc. 792.) The effect of the violation of the privilege was that the witness ’ testimony might not be used to ground an indictment for the substantive crime of which he was accused nor might he be prosecuted for any contempt or perjury arising from the testimony elicited in violation of the witness’ constitutional privilege (People v. Gillette, supra.) He did not thereby gain an immunity from prosecution for the substantive crime if an indictment was thereafter obtained on proper and competent testimony. (People ex rel. Coyle v. Truesdell, 259 App. Div. 282; People v. Bermel, supra.)

The rule in the Gillette case has not been free from problems. It is not always clear whether a witness is a prospective defendant or not. One may infer that this was one of the background facts that colored the action of the Legislature in enacting section 2447 of the Penal Law to which reference will be made later. In this connection it is important to distinguish between the uses to which testimony taken in violation of a privilege may be used. The Gillette case did not distinguish among these possible uses. It treated admissions or confessions so obtained and used in a prosecution for the substantive crime, and prosecution for contempt and perjury alike. All uses were invalid. The fact is that it is repugnant for testimony so obtained in violation of a privilege to be used against the witness in a prosecution for the substantive crime. That goes to the essence of the privilege. On the other hand, the privilege was never intended to protect the contemner or the perjurer. But, he that as it may, the rule in the Gillette case, expressed by a much-divided court, had become the recognized principle in this area. (But for a contrary view, see People v. Buffalo Gravel Corp., 195 N. Y. S. 940, 949; cf. United States v. Murdock, 284 U. S. 141; Rogers v. United States, 340 U. S. 367, and 8 Wigmore on Evidence [3d Ed.], § 2276.)

The District Attorney claims that De Feo was not a prospective defendant. We cannot agree. He asserts that it is apparent that De Feo was being questioned in order to obtain evidence against his associate and against those who accepted rebates and “ bribes ”. _ He asserts further that any doubt as to De Feo’s status as a witness is removed by the conferring of immunity on the witness pursuant to section 2447 of the Penal Law, which purportedly occurred on the fourth day of the testimony. Whether De Feo was a prospective defendant is not to be determined by a subjective examination of the mind of the prosecutor. The scope of the inquiry made De Feo a possible defendant. The questions addressed to him related to acts of his, denominated criminal under the Penal Law. For the purpose of applying the constitutional privilege De Feo was a prospective defendant. This is not a situation where it is not clear who are the alleged wrongdoers or who are those who know the facts. In such case the prosecutor may not know who are prospective defendants. In this instance, the record is clear, De Feo was on the target even if perchance he was not to be the bull’s eye.

Whether De Feo’s privilege was violated or not requires a further consideration of what took place, and particularly the effect of section 2447 of the Penal Law enacted in 1953. He was called as a witness in this inquiry, which had no named real defendants. He was not asked to and he did not sign any waiver of immunity. At no time did he assert or claim any constitutional privilege until the holding of the fourth session for the taking of testimony. This was on December 4, 1953. From the record it appears that the witness had had a discussion with the Judge presiding over the Grand Jury Term. Following that, the foreman of the Grand Jury suggested to the witness that he had not claimed his privilege. The witness asked to speak with his attorney. This request was granted. The witness returned and claimed his privilege. Thereupon the foreman advised him: “ On advice of Judge Street I grant you immunity for the crimes of conspiracy and for the crime of bribing labor officials”. The prosecutor requested and the witness was then directed to answer the questions.

The witness once again was uninformative about the cash withdrawals that had been made, and these questions and answers must be read in the light of all his testimony. Moreover, an added fillip was present. There were entries in the corporation’s books charged to “ commission transfer ”. As to these De Peo claimed they were not a division of commissions but expenditures for promotion and entertainment. At the close of the session the Grand Jury voted to cite the witness for contempt.

Section 2447 of the Penal Law was enacted in 1953 at an Extraordinary Session of the Legislature. (L. 1953, ch. 891.) It provides:

“ § 2447. Witnesses’ immunity. In any investigation or proceeding where, by express provision of statute, a competent authority is authorized to confer immunity, if a person refuses to answer a question or produce evidence of any other kind on the ground that he may be incriminated thereby, and, notwithstanding such refusal, an order is made by such competent authority that such person answer the question or produce the evidence, such person shall comply with the order. If such person complies with the order, and if, but for this section, he would have been privileged to withhold the answer given or the evidence produced by him, then immunity shall be conferred upon him, as provided for herein.

“2. ' Immunity ’ as used in this section means that such person shall not be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which, in accordance with the order by competent authority, he gave answer or produced evidence, and that no such answer given or evidence produced shall .be received against him upon any criminal proceeding. But he may nevertheless be prosecuted or subjected to penalty or forfeiture for any perjury or contempt committed in answering, or failing to answer, or in producing or failing to produce evidence, in accordance with the order, and any such answer given or evidence produced shall be admissible against him upon any criminal proceeding concerning such perjury or contempt.

“3. ‘ Competent authority ’ as used in this section means: * * *

“ (c) The grand jury before which a person is called to answer questions or produce evidence, when such grand jury is expressly requested by the prosecuting attorney to order such person to give an answer or produce evidence; * * *

‘ ‘ 4. Immunity shall not be conferred upon any person except in accordance with the provisions of this section.” Its enactment was recommended by the State Crime Commission. The commission, in recommending the statute, said: “ The Commission also recommends that legislation be adopted to accomplish the following: A. Require that before immunity may be obtained: (1) the witness must in good faith claim his privilege against self-incrimination; (2) he must be directed by competent authority to testify, notwithstanding his claim of privilege; and (3) he must testify pursuant to such direction.” (New York State Crime Comm. [3d Report, 1953], p. 15; N. Y. Legis. Doc., 1953, No. 68, p. 15.)

The new statute provides for the conferring of immunity only where the witness claims his privilege, and in the case of a grand jury inquiry, where the prosecutor requests that immunity be granted and the witness is then directed to answer questions or produce evidence. The immunity thereupon granted is broad, namely, it applies to any prosecution for any crime concerning which testimony is given. Moreover, the statute provides that immunity may be granted only in accordance with the statute. (See People v. Breslin, 306 N. Y. 294.)

It is apparent that the statute sets up a new scheme in connection with the claim of privilege and the conferring of immunity. Under the old immunity statutes immunity was automatic if the witness testified in an investigation of matters to which the statutes added an immunity provision. (People v. Cahill, 193 N. Y. 232; Matter of Doyle, 257 N. Y. 244; People v. Reiss, 255 App. Div. 509, affd. 280 N. Y. 539.) It is this automatic, and what occasionally might be accidental or misguided conferring of immunity, that the new statute is designed to avoid. (See Third Report of New York State Crime Comm.)

Under the statute the privilege must first be claimed. If it is, the immunity is conferred, and the one conferred is as broad as the peril (§ 2447, subd. 2; People v. Breslin, supra; Matter of Boyle, supra).

In the instant case the foreman of the G-rand Jury referred only to immunity from prosecution for crimes of bribery and conspiracy. But he had no power to limit the immunity. The statute was controlling. Once the privilege had been claimed, and the witness was directed to answer under the statute with the promise of immunity, he was protected from any prosecution that might be based on the matters in inquiry. Surely, if De Feo were now indicted for a crime, other than bribery or conspiracy, arising from matters concerning which he was questioned on December 4, 1953, or even on the three occasions before that date, the indictment would have to fail because of what occurred on December 4th. That is conclusive on whether complete immunity was successfully conferred on the witness.

But still another problem remains in this branch of the case. For three sessions De Feo testified without benefit of immunity. What is the effect of the immunity granted on the fourth session? In the first place, it is clear, as has already been said, that the new statute sets up an entirely new procedure, which requires a claim of privilege by one who seeks constitutional protection. Thus, in the Third Report of the New York State Crime Commission, it was stated (p. 15): “ There are some 46 separate statutory provisions under which a witness may obtain immunity by giving testimony. Under some, no claim of privilege is required. Most of the more recent ones are carefully drawn and require, as all of them should, that the witness must first claim his privilege, that he must then be directed by the court or other authority to answer, and that he must then give his.testimony. (See Law Revision Commission Report, 1943 Legis. Doc. No. 65(b), pp. 33-59.) Even in some of these newer statutes, the power to give immunity by directing a witness to answer is not clearly committed and limited to those who should be entrusted with this great responsibility. ”

To that extent, namely, of requiring the assertion of privilege, the statute would appear to have the effect of overriding the rule in People v. Gillette, 126 App. Div. 665 (supra). It would make little sense to require a claim of privilege to invoke an immunity statute and to dispense with the claim where, depending upon the facts, the witness will later urge that he was a prospective defendant and therefore was compelled to testify against himself. Immunity statutes have no reference except to prospective defendants, albeit the probability of the prospect may vary from case to case. On this view, De Feo’s testimony, taken in advance of the conferring of immunity upon him, since he did not claim a privilege which was overridden, was sufficient for basing a proceeding for contempt or for perjury.

But there is added reason why De Fee’s evasive testimony may not escape the sanction of the court. The only reason that under the Gillette Case (126 App. Div. 665, supra), neither contempt nor perjury would lie for testimony taken in violation of the privilege was not because there was any infirmity in the testimony as such, but because as a matter of public policy no use was to be permitted of testimony taken in violation of the constitutional safeguard. The disabling effect of that safeguard could be removed by waiver or the granting of immunity. Either could occur at any time. When it did, the disabling effect was removed. (See People ex rel. Jannicky v. Warden of City Prison, 231 App. Div. 131, affd. 255 N. Y. 623; see, also, 8 Wigmore on Evidence [3d Ed.], § 2276, p. 452.) De Feo was always obligated to testify truthfully, but so long as his privilege might have been violated, that testimony could have no standing. When the privilege ceased to be violated, either because it was waived or because immunity was granted, there was nothing to stop the use of that testimony. By parallel reasoning, if the testimony now usable for other purposes revealed perjury or contemptuous evasion, it would not be reasonable to withhold sanctions therefor.

In reaching these conclusions we are not untroubled. The principles, sound at the time, explored in People v. Ferola (215 N. Y. 285), condemning the calling of prospective defendants to testify against themselves, perhaps unwittingly, before the Grand Jury, are still sound. The better procedure when calling a witness such as De Feo is for the prosecutor either to obtain a waiver of immunity or to decide to invoke the provisions of section 2447. In the unlikely prospect that the witness will neither sign a waiver of immunity nor claim his privilege, he should, if an ambiguous, but not invalid, status is to be avoided, be warned, if he is a prospective defendant, that he is entitled to claim his privilege. This would apply only where the witness has refused to sign a waiver of immunity and the prosecutor is on notice that the witness fears prosecution.

In summary, De Feo was properly found to have answered the questions put to him, evasively in contempt and contumacy, and there is no bar to the proceeding. There is no bar because he failed to claim a privilege at any time. And in any event, the effect of the granting to him of immunity at the fourth session was sufficient, if needed, to remove any invalidity to the proceedings theretofore arising from the constitutional privilege and its breach. On this view, proceedings before grand juries are analogized to those upon a trial or other inquiry; the question of privilege must be invoked before it will have the effect of invalidating testimony taken. This, it is submitted, is the necessary effect, if not the intention, of the new statute providing for immunity. No constitutional impediment is perceived because the privilege is fully enforced so long as the witness is free to refuse to answer until given immunity (People v. Breslin, 306 N. Y. 294, supra), and the Legislature has complete power to regulate the manner in which the privilege is to be invoked, in the same way that it may condition the grant of immunity, provided the witness never loses the alternative of privilege preserved or immunity granted.

The order should be affirmed.