Silverthorne v. United States (400 F.2d 627, 1968)

BARNES, Circuit Judge:

Appellant Don C. Silverthorne was convicted of violating 18 U.S.C. §§ 656 and 1005; the misapplication of bank funds and the making of false entries in bank records, respectively. The primary error urged by Silverthorne in this appeal is that the trial court failed to ascertain, during the voir dire examination and at certain specific points in the trial, whether, in light of massive news-media publicity which antedated and which was contemporary with the trial, the jurors bore any prejudice toward appellant. Further assignments of error related to the claimed prejudicial publicity are the denials by the district court of a motion to dismiss the indictment and a motion for continuance. In addition, Silverthorne asserts the commission of sixteen other errors by the court below, including the denial of a motion to sever. We have carefully studied the additional allegations of error and find them to be without merit. However, our evaluation of the publicity surrounding appellant’s trial and the methods and procedures adopted by the trial court with respect thereto, compel the conclusion that appellant was not accorded a fair trial, free from prejudice or, as the more recent cases require, free from the probability of prejudice.

Accordingly, we reverse the judgment of conviction.

The San Francisco National Bank was authorized to begin doing business in June, 1962 with a capitalization of $4,500,000. Silverthome was the president and principal organizer of the bank. At the end of the year 1964, the bank’s statement reflected assets of some $54,000,000. On January 22, 1965, the bank was ordered closed by the United States Comptroller of Currency because of insolvency. Beginning on that day and continuing through appellant’s trial during January and February, 1966, the San Francisco Bay area newspapers were saturated with more than 300 articles concerning Silverthorne and the alleged reasons for the closing of the bank. Radio and television coverage was likewise extensive.

The publicity Silverthome received could not, of course, be avoided: a bank failure of the proportion here present, the nature of the closing, the criminal charges filed against Silverthome in the state courts, his testimony and the testimony of witnesses against him before the investigating committee of the Senate Committee on Governmental Operations, the indictment returned by the federal grand jury, Silverthorne’s flamboyant and bizarre conduct including his marital and gambling activities with losses of almost one-half million dollars, the civil suit filed against him by the Federal Deposit Insurance Corporation predicated on Silverthorne’s alleged malfeasance, and the resignation of Silver-thorne’s attorney and the latter’s filing suit against him for unpaid attorney’s fees, all made certain there would be a great plenitude of publicity concerning this federal trial. While much of the publicity was adverse to co defendant Bennett, it was particularly adverse to Silverthome. In a trial such as this, after the occurrence of such circumstances as are briefly related above, it would have been impossible to avoid public interest, scrutiny and publicity: it is most doubtful that publicity adverse to Silverthorne could have been avoided.

We are not concerned with the fact of publicity but with the assessment of its nature. We concentrate, therefore, on (a) whether the publicity was such as to require the court to grant Silverthorne’s motions for dismissal or for a continuance, and (b) whether the trial judge and counsel for both sides did all the law requires to ascertain if there was (and if so, to avoid or minimize) prejudice to Silverthorne in the eyes of the jury.

The Motions

Silverthorne’s counsel filed a motion to dismiss the indictment under Rule 12, Federal Rules of Criminal Procedure, on the ground that highly prejudicial publicity had infected the grand jury’s deliberations. That motion pointed out that (1) Silverthorne was charged before the Senate subcommittee with “certain unspecified crimes”; (2) that evidence which was inadmissible at his trial had been introduced at the subcommittee hearings, and thereafter publicized in daily local papers and in national magazines; (3) that the United States Attorney had accused appellant of acts of misconduct not charged in the indictments (to the effect that he had allegedly misappropriated bank funds to pay gambling debts, that he was under investigation for income tax evasion), and had expressed a personal belief in the defendants’ guilt; and (4) that at least two governmental officials had been quoted by the press as expressing belief Silverthorne was guilty of unlawful banking activities, gross misconduct and deception. Silverthorne’s sworn affidavit, attached to the motion to dismiss, was accompanied by some 116 exhibits of alleged adverse publicity, some consisting of four or five articles in one exhibit. The United States Attorney requested the court’s permission to file an answer to the “conclusory portion of the affidavits now on file by counsel so that it would not appear * * [the government] failed [sic] to acquiesce or failed to object to them. * * * ” However, the court apparently did not act on the request of the Government by way of any order. Nowhere in the record can be found affidavits from the Government contesting or contradicting the affidavits filed by the appellant.

The record does contain, however, a government memorandum in opposition to the motion to dismiss. This pleading relies on two points, the first that there existed no proof that the indictment rendered by the grand jury was influenced in any way by the publicity cited, and the second, that some of the publicity had to do with the bank and not with the appellant, and that “statements made by the United States Attorney at the time of the returning of the indictments, when viewed in context, should not in any way be prejudicial to the defendant at the time of the trial." (Emphasis added.) The memorandum expressed that “the statements made by the United States Attorney were not a deliberate and structured or prolonged intent to inflame public opinion, but * * were statements made on the return of the indictment * *

Appellant relies on the much-cited case of Delaney v. United States, 199 F.2d 107 (1st Cir. 1952) in support of his position that the indictment should have been dismissed by the trial court because the grand jury deliberations were infected by prejudicial publicity arising out of actions by government agencies and agents. Delaney was a district collector of Internal Revenue. He was indicted and convicted of certain criminal acts engaged in during his term of office. Following the return of the federal indictment against Delaney, an investigation of his office was undertaken by a Senate subcommittee on the administration of Internal Revenue laws. Public hearings were held, and the publicity attendant thereto was nationwide and most adverse to Delaney. Two months after the conclusion of the Senate hearings Delaney’s case went to trial, over his objection and after the denial of two motions for continuance.

In reversing Delaney’s judgment of conviction because the district court failed to grant a continuance in the wake of the prejudicial Senate hearings, instigated by the United States Government, the Court of Appeals said:

“[S]o far as our present problem is concerned, we perceive no difference between prejudicial publicity instigated by the United States through its executive arm and prejudicial publicity instigated by the United States through its legislative arm. The prosecution is by the ‘United States of America’ against Denis W. Delaney. After the United States has imposed this burden upon the defendant, by making it difficult to determine his guilt or innocence solely on the basis of evidence to be presented at the impending trial, it seems to us neither right, nor in harmony with the spirit of the Sixth Amendment, for the United States to make him stand trial while the damaging effect of all that hostile publicity may reasonably be thought not to have been erased from the public mind.” 199 F.2d at 114.

It is appellant’s position that the adverse publicity in the instant case, instigated by a Senate committee and by officers of the federal government, bears the same relation to the grand jury deliberations as the prejudicial publicity in Dela/aey bore to the trial on the merits: it is as improper to sanction the indictments herein as it was to sanction a guilty verdict in Delaney.

Of course it goes without saying that a pertinent distinction exists between the Senate investigations commencing after a federal indictment and those undertaken before a federal grand jury acts. In the former case, Congress is most certainly warned that its actions may well affect an impending trial. But such a distinction is not the complete answer to the question. Other considerations become manifest, and we think the Delaney court, in broaching the problem now before us, provides us with a proper guideline for decision:

“We limit our discussion to the case before us, and do not stop to consider what would be the effect of a public legislative hearing, causing damaging publicity relating to a public official not then under indictment. Such a situation may present important differences from the instant case. In such a situation the investigative function of Congress has its greatest utility: Congress is informing itself so that it may take appropriate legislative action; it is informing the Executive so that existing laws may be enforced; it is informing the public so that the democratic processes may be brought to bear to correct any disclosed executive laxity. Also, if as a result of such legislative hearing an indictment is eventually procured against the the public official, then in the normal case there would be a much greater lapse of time between the publicity accompanying the public hearing and the trial of the subsequently in-dieted official than would be the case if the legislative hearing were held while the accused is awaiting trial on a pending indictment.” 199 F.2d at 115.

We do not perceive the impropriety in the Senate hearings in the case before us which was found by the Delaney court. While the reversal in Delaney was necessitated because of the fact of prejudicial publicity, this result is inextricably bound up in the rationale that such publicity was caused by the action of the United States Government at a time when restraint would have been the more prudent course of action. Federal courts have been sensitive to claims of prejudice arising from publicity when that publicity is created by acts of the Government. Berger v. United States, 295 U.S. 78, 55 S.Ct. 629, 79 L.Ed. 1314 (1935); United States v. Milanovich, 303 F.2d 626 (4th Cir. 1962); Holmes v. United States, 284 F.2d 716, 97 A.L.R.2d 782 (4th Cir. 1960); Massicot v. United States, 254 F.2d 58 (5th Cir. 1958). In reviewing the case before us, we think it significant that the Senate committee investigating Silverthorne’s activities undertook its lawful function in the absence of circumstances which would have cautioned abstention.

In so concluding, we are left with but the fact of prejudicial publicity arising from the hearings. The indictment returned against Silverthorne was handed down by the grand jury more than five months after the conclusion of the Senate investigation. We have no way of knowing what effect the news-media reporting had on the grand jurors. Even had the district court permitted the appellant to inspect the grand jury minutes we are unable to see how the written transcript could have afforded counsel or the trial judge any basis for the objective assessment of the existence of prejudice toward appellant in the minds of the grand jurors.

We are unable to appreciate Silver-thorne’s argument. The Senate investigation was, among other things, initiated for the purpose of “informing the Executive so that existing laws may be enforced.” In this respect the Senate committee and the federal grand jury .are associates in exposing criminal activity and moving toward its curtailment. What illegality the Senate committee uncovers cannot become the forbidden fruit of the grand jury’s consideration merely because in the process of uncovering, prejudice to the perpetrator may accrue. Furthermore, a great many, if not all, the witnesses who testified at the Senate investigations undoubtedly appeared before the grand jury which returned Silverthorne’s indictment. Indeed, a number of Silverthorne’s transactions with individuals who appeared before the Senate committee were alleged as counts of the indictment. It would be most difficult for us to conclude, under the facts of this case, that the grand jury was motivated by facts or circumstances other than those which were presented to it.

Our conclusion that appellant was not prejudiced by grand jury indictment is further supported by the fact that the grand jury deliberates and indicts, as an accusing body, on the standard of “reasonable probability” that a crime has been committed by some person. It is not a trial body. United States v. Atlantic Comm’n Co., 45 F.Supp. 187, 192 (E.D.N.C.1942). The quantum of evidence necessary to indict is not as great as that necessary to convict. If a grand jury is prejudiced by outside sources when in fact there is insufficient evidence to indict, the greatest safeguard to the liberty of the accused is the petit jury and the rules governing its determination of a defendant’s guilt or innocence. And, if impartiality among the petit jurors is wanting, the cure is reversal by the appellate courts.

On December 20, 1965, the trial court denied Silverthorne’s motion for continuance, which motion was predicated on the ground that it was necessary to delay the trial to permit adverse publicity to abate. The denial of this motion was in the sound discretion of the trial court and a denial of such a motion, prior to the voir dire examination, is not an abuse of that discretion. United States v. Medlin, 353 F.2d 789 (6th Cir. 1965), cert, denied, 384 U.S. 973, 86 S.Ct. 1860, 16 L.Ed.2d 683, reh. denied, 385 U.S. 889, 87 S.Ct. 14, 17 L.Ed.2d 123 (1966).

In contemplating the effect of the publicity on the public, we note that on September 9, 1965, the day the federal indictments were returned against Silver-thorne and four months before his trial began, one of the newspapers quoted the United States Attorney with respect to the indictment of these defendants, as follows:

“Nor * * * do the indictments cover all the misdeeds at the bank. * * * Many incidents of misapplications of funds are not being charged here. We just got to the point where we had to decide what to proceed with. * * * If we tried to trace it all, we’d be here for the rest of the terms of some of our federal judges —and their terms are for life.”

The Comptroller . of Currency likewise gave statements to the press:

“There can be no question that Mr. Silverthome was engaged in improper and highly questionable, if not unlawful, banking activities. * * * it is a case of grossest misconduct and deception.”

And, on another press occasion:

“He used some of the [bank’s] money to finance activities like his gambling in Las Vegas.”

Within a month after his indictment by the federal grand jury, Silverthome was sued by his attorney, who had resigned from his ease, for attorney’s fees, and noncomplimentary quotations by the attorney about Silverthome were publicized. One newspaper went so far as to discuss Silverthorne’s guilt in sarcastic overtones. The November 6,1965 article in the San Francisco newspaper which gave rise to the mistrial in the state court remarked that:

“The furor created by the sudden collapse of the San Francisco National Bank last January — which has already touched off a Senate investigation and led to indictment of the bank’s president on 79 counts of criminal violation of federal banking laws — may be mild compared with what’s to come.

“Indications yesterday were that at least $30 million, or 56 per cent of the bank’s total of $54 million declared assets, may have been improperly used, mistakenly loaned, or otherwise placed beyond the immediate chance of recovery by creditors.”

Voir Dire Examination

We now turn to the impaneling of the jury on January 3, 4 and 5, 1966. A panel of 65 persons was summoned by the court. By the time 12 jurors were chosen, 43 panel members had been excused, 19 of them because they expressed an opinion as to the guilt of appellant which they had derived from reading newspapers and listening to news broadcasts. Every one of the 65 panelists related a knowledge of appellant’s case.

The trial judge adopted the so-called “Arizona Plan” of voir dire examination. Counsel were not permitted to interrogate the panel members. The judge asked each of the prospective jurors, in substance, four questions concerning the publicity which antedated the trial. The court’s examination of the 12 jurors ultimately impaneled is set forth in the margin.

The court’s examination, which was, for the most part, general and not individual, was directed to the panel at large and only those jurors who took the places of those who had been excused were questioned individually, because they had not been in the courtroom when the panel was being interrogated generally. Four of the jurors ultimately impaneled never responded to the court’s questions concerning their opinions of the case (footnote 10, supra), and two of those four were never questioned by the court on the publicity issue.

In assessing appellant’s contention that the court’s voir dire examination was inadequate to protect him from the probability of prejudice, we begin with the proposition that:

“The theory of our system is that the conclusions to be reached in a case will be induced only by evidence and argument in open court, and not by any outside influence, whether of private talk or public print.”

Patterson v. State of Colorado, 205 U.S. 454, 462, 27 S.Ct. 556, 558, 51 L.Ed. 879 (1907). Believing that conclusions based only on the evidence and arguments satisfies due process, “our system of law has always endeavored to prevent even the probability of unfairness.” In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 99 L.Ed. 942 (1955) (emphasis in original). In pursuit of this end, the trial judge has a large discretion in ruling on the issue of prejudice resulting from the reading by jurors of news articles concerning the trial. See Holt v. United States, 218 U.S. 245, 251, 31 S.Ct. 2, 54 L.Ed. 1021 (1910). But discretion is not a substitute for duty:

“Given the pervasiveness of modern communications and the difficulty of effacing prejudicial publicity from the minds of the jurors, the trial courts must take strong measures to ensure that the balance is never weighed against the accused.” Sheppard v. Maxwell, 384 U.S. 333, 362, 86 S.Ct. 1507, 1522, 16 L.Ed.2d 600 (1966).

Therefore, when pretrial publicity is great, the trial judge must exercise correspondingly great care in all aspects of the case relating to publicity which might tend to defeat or impair the rights of an accused. The judge must insure that the voir dire examination of the jurors affords a fair determination that no prejudice has been fostered. Aldridge v. United States, 283 U.S. 308, 51 S.Ct. 470, 75 L.Ed. 1054 (1931). He must determine whether “the nature and strength of the opinion formed [if any] are such as in law necessarily * * * raise the presumption of partiality. Reynolds v. United States, 98 U.S. 145, 156, 25 L.Ed. 244 (1878).

Appellate courts will not interfere with the manner in which the trial court conducted the voir dire examination unless there has been a clear abuse of discretion. United States v. Dennis, 183 F.2d 201 (2d Cir. 1950), affirmed, 341 U.S. 494, 71 S.Ct. 857, 95 L.Ed. 1137 (1951); United States v. Lebrón, 222 F. 2d 531 (2d Cir.), cert, denied, 350 U.S. 876, 76 S.Ct. 121, 100 L.Ed. 774 (1955); Stephan v. Marlin Firearms Co., 353 F.2d 819 (2d Cir.), cert, denied, 384 U.S. 959, 86 S.Ct. 1584, 16 L.Ed.2d 672 (1965); Kreuter v. United States, 376 F.2d 654 (10th Cir. 1967).

It is not an abuse of discretion for the trial judge to insist upon conducting a voir dire examination, but if he does so, he must exercise a sound “judicial” discretion in the acceptance or rejection of supplemental questions proposed by counsel, to be propounded by the judge, as contemplated by Rule 24(a) of the Fed.R.Crim.Procedure.

Bearing in mind these principles, we conclude that the trial court’s voir dire examination did not adequately dispel the probability of prejudice accruing from the pre-trial publicity and the jury panel members’ knowledge of the ease. This conclusion is predicated on two grounds: (1) the questions propounded by the court to the prospective jurors were calculated to evoke responses which were subjective in nature — -the jurors were called upon to assess their own impartiality for the court’s benefit, and (2) the entire voir dire examination was too general to adequately probe the prejudice issue,

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We agree with the language of the en banc majority in United States ex rel. Bloeth v. Denno, 313 F.2d 364 (2d Cir.) cert. denied, 372 U.S. 978, 83 S.Ct. 1112, 10 L.Ed.2d 143 (1963) that in the absence of an examination designed to elicit answers which provide an objective basis for the court’s evaluation, “merely going through the form of obtaining jurors’ assurances of impartiality is insufficient [to test that impartiality]313 F.2d at 372. We find this expression to be forcefully applicable to the instant ease. Each and every jUror in the case before us had read or heard something about appellant’s case. The trial court made no effort to ascertain what information the Jurors ha