HAROLD FRIEDMAN AND ANTHONY HUGHES, PETITIONERS V. UNITED STATES OF
AMERICA

   No. 90-905

   In The Supreme Court Of The United States

   October Term, 1990

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Sixth Circuit

   Brief For The United States In Opposition

            TABLE OF CONTENTS
   Questions Presented
   Opinions below
   Jurisdiction
   Statement
   Argument
   Conclusion

                            OPINIONS BELOW

   The court of appeals' opinion (Pet. App. A3-A4) is unreported, but
the judgment is noted at 908 F.2d 974.  The pertinent opinion of the
district court (Pet. App. A17-A33) is not reported.

                             JURISDICTION

   The judgment of the court of appeals was entered on July 26, 1990.
A petition for rehearing was denied on September 10, 1990.  The
petition for a writ of certiorari was filed on December 10, 1990 (a
Monday).  The jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).

                          QUESTIONS PRESENTED

   1. Whether there was a constructive amendment of the indictment or
a prejudicial variance between the indictment and the prosecution's
theory of the case.

   2. Whether the RICO statute's requirement of a pattern of
racketeering activity is unconstitutionally vague as applied to the
facts of this case.

                               STATEMENT

   After a jury trial in the United States District Court for the
Northern District of Ohio, both petitioners were convicted of
conducting the affairs of an enterprise through a pattern of
racketeering activity (Count 1), in violation of 18 U.S.C. 1962(c);
conspiring to conduct the affairs of an enterprise through a pattern
of racketeering activity (Count 2), in violation of 18 U.S.C. 1962(d);
 and embezzling union funds (Count 4), in violation of 29 U.S.C.
501(c).  In addition, petitioner Friedman was convicted of filing a
false Labor Organization Report (Count 6), in violation of 29 U.S.C.
439.  Petitioner Friedman was placed on probation for four years,
fined $35,000, and ordered to forfeit his labor union positions.
Petitioner Hughes was placed on probation for four years, fined
$30,000, and ordered to forfeit his labor union positions.  The court
of appeals affirmed.

   1. The evidence at trial is described in the government's brief in
the court of appeals.  Petitioner Friedman and co-defendant Jackie
Presser /1/ were president and secretary-treasurer, respectively, of
Local 507 of the International Brotherhood of Teamsters, Chauffeurs,
Warehousemen, and Helpers of America.  Friedman also was president of
Local 19 of the Bakery, Confectionery and Tobacco Workers
International Union, AFL-CIO.  Petitioner Hughes was first a business
agent and then recording secretary of Local 507 and was paid as a
business agent of Local 19.  Both Friedman and Hughes, as union
officers and employees, had a fiduciary responsibility to use union
funds and property "solely for the benefit of (each Local) and its
members." 29 U.S.C. 501(a).  Gov't C.A. Br. 3.

   Both Locals employed a number of business agents.  Working together
in pairs, the agents spent most of their time visiting union shops and
meeting with union members regarding the members' problems.
Petitioner Friedman supervised the business agents, instructed them on
their duties, routinely conferred with them about union matters, and
required them to maintain records regarding their activities.
Friedman also was responsible for filing Local 19's Labor Organization
Annual Report, Form LM-2, with the U.S. Department of Labor.  Friedman
signed and attested to the truth of the LM-2 reports filed by Local 19
from 1977 through 1981.  Those LM-2 reports stated that petitioner
Hughes was employed as a business agent by Local 19 and was paid a
salary of $26,000 in 1977, 1979, 1980, and 1981, and $26,500 in 1978.
Gov't C.A. Br. 4-9.

   The government's evidence demonstrated that Hughes actually
performed none of the customary functions of a business agent and did
little or no other work for Local 19.  Other Local 19 business agents
testified that Hughes never worked with them in visiting union shops
between 1977 and 1981 and that they never saw him perform the duties
of a business agent.  Forty-five employers of employees represented by
Local 19 testified that they had no dealings with Hughes concerning
the Local during that period.  Voluminous union records reflecting
thousands of meetings and appearances involving business agents
contained no mention of Hughes;  other records reflected that he was
present at 2 out of 376 meetings of Local 19's membership or governing
bodies.  During the period that Hughes was paid as a business agent,
Hughes and Presser's wife were co-owners of a restaurant, where Hughes
worked five to seven days a week, typically from 11:00 a.m. to 2:00
p.m. and 6:00 p.m. to 10:00 p.m.  Gov't C.A. Br. 6-9.

   The evidence likewise showed that George Argie received a business
agent's salary from Local 507 -- in the form of checks signed by
petitioner Friedman -- during a period in which he perfomed little or
no work for that Local.  From August 7, 1978, to June 1, 1979, he
collected $17,600.  Argie, a childhood friend of Presser's, was hired
by Presser in 1978.  Argie testified that he had no prior union
experience.  For the preceding ten years, he had been a gambler;  he
was convicted of a gambling-related offense approximately four months
before he was hired by Presser.  Argie testified that he did not know
the duties of a business agent and that he did not have any specific
duties.  Argie's time at Local 507's offices was typically spent in
conversation with Presser or Hughes, or, if Presser was not there,
reading magazines.  During Argie's employment at Local 507, he never
gave Presser any advice regarding union matters, never visted union
shops with the business agents, never collected union dues money, and
did not have a union car or union credit card.  Telephone calls were
never referred to him at the union offices.  Testimony o other
business agents and 23 employers, as well as union records, confirmed
that Argie had not performed the services of a business agent.  Gov't
C.A. Br. 9-11.

   The theory of the defense was that Argie and Hughes had actually
performed some work for the union.  The government impeached evidence
offered to support this theory and argued that any work actually
performed was de minimis in nature.  See Gov't C.A. Br. 18-23.

   2. a. The substantive RICO count of the indictment charged that
Presser, Friedman, and Hughes, together with Locals 507 and 19 and the
affiliated pension and benefit plans of those Locals, constituted a
RICO "enterprise" within the meaning of 18 U.S.C. 1961(4), and that
petitioners and Presser had conducted the affairs of that enterprise
through a pattern of racketeering activity involving multiple acts of
embezzlement of union funds.  C.A. Joint App. 70-71.  The conspiracy
count charged the same defendants with conspiring to commit that
offense.  Id. at 88-89.  The racketeering acts on which the RICO
convictions were based were an embezzlement by Friedman of $8,000 in
union funds paid to Argie from January to June 1979 (racketeering act
20), an embezzlement by Hughes and Friedman of $26,500 in union funds
paid to Hughes during 1978 (racketeering act 22), and an embezzlement
by Friedman and Hughes of $17,000 in union funds paid to Hughes during
1981 (racketeering act 26).  Id. at 84-85, 87, 89.  See Pet. App.
A332-A341.  Friedman and Hughes were convicted on a count charging
them with violating 29 U.S.C. 501(c) by embezzling that $17,000, and
Friedman was convicted on a count charging that he had submitted an
LM-2 report for Local 19 that falsely represented that Hughes received
a "salary" of $26,000 as an "employee" and "business agent" of Local
19.  C.A. Joint App. 93-94, 96-97.

   b. After the jury returned its verdicts on those counts,
petitioners moved for judgments of acquittal and for a new trial.
Among other things, they claimed that they had been prejudiced by a
constructive amendment of the indictment and by a variance between the
evidence and the indictment.  In particular, they argued that the
indictment charged that Hughes and Argie performed no work at all for
their respective Locals, while the evidence, the government's
argument, and the jury instructions resulted in a conviction based on
the theory that the two had performed some work, but not enough to
justify their salaries.  The district court rejected that claim.  Pet.
App. A28-A33.

   The district court first determined that "a fair reading of the
language at issue does not mandate the conclusion that the ghosts are
alleged to have performed absolutely 'no work'." Pet. App. A30.  The
language on which petitioners relied, the court explained, "can just
as easily be read as alleging that the employees did not work in
general sense." Ibid.

   In the alternative, the district court addressed petitioner's
constructive amendment and prejudicial variance claims on the
assumption that the "indictment language did amount to an absolute 'no
work' allegation." Pet. App. A30.  The court concluded that there had
been no constructive amendment of the indictment since any no-work
allegation "did not pertain to an element of the charges" and was
"mere surplusage." Pet. App. A31 (citing United States v. Miller, 471
U.S. 137 (1985)).  With respect to the variance claim, the court
concluded that petitioners had failed to establish that they had been
prejudiced by evidence that Hughes and Argie had performed de minimis
work, as opposed to no work at all.  Pet. App. A32.  In light of
various pretrial proceedings, the court concluded, "all parties were
clearly aware from the start of the case that the amount of work done
by the employees in question would be a critical issue." Ibid.  The
court also found that defendants had received notice of that issue
from discovery materials provided to them by the government and from
the prosecutor's opening statement.  Ibid.

   3. The court of appeals affirmed in an unpublished per curiam
opinion that incorporated the district court's reasoning.  Pet. App.
A3-A4.

                               ARGUMENT

   1. Petitioners first combine two related contentions:  (a) that 29
U.S.C. 501(c) requires proof that a union has derived no benefit at
all from an expenditure of union funds (Pet. 17-23) and (b) that
petitioners were convicted on a prosecution theory -- that Argie and
Hughes had performed insufficient work to justify their salaries --
that was not charged in the indictment (Pet. 11-17).  These
contentions present no question warranting this Court's review.

   a. Section 501(c) penalizes "(a)ny person who embezzles, steals, or
unlawfully and willfully abstracts or converts to his own use, or the
use of another, any of the moneys, funds, securities, property, or
other assets of a labor organization of which he is an officer, or by
which he is employed, directly or indirectly." In United States v.
Bane, 583 F.2d 832, 835-836 (1978), cert. denied, 439 U.S. 1127
(1979), the Sixth Circuit held that when such a taking is in the form
of an expenditure of union funds that is "authorized" by the union's
constitution and by-laws, as petitioners contend the employment of
"business agents" was in this case, the government must prove that
"the defendant had a fraudulent intent to deprive the union of its
funds" and "lacked a good faith belief that the expenditure was for
the legitimate benefit of the union." Accord United States v. Gibson,
675 F.2d 825, 828 (6th Cir.), cert. denied, 459 U.S. 972 (1982);
United States v. Dixon, 609 F.2d 827, 829 (5th Cir. 1980);  see
generally United States v. Floyd, 882 F.2d 235, 239 (7th Cir. 1989).
The jury was instructed in accordance with this interpretation of
Section 501(c).  Gov't C.A. Br. 15.  In this case, therefore, the jury
found that petitioners lacked a good faith belief that the salaries
paid to Hughes and Argie were for the legitimate benefit of the union.

      As Bane noted, obligating the government to prove that

an expenditure made with fraudulent intent has in fact conferred no
benefit whatever on a union would narrow the statute in a manner
inconsistent with its language and purpose:  "To require such proof
could absolve a defendant of liability when an otherwise fradulent
appropriation of funds fortuitously had som beneficial effect upon the
union.  Such a requirement would also be inconsistent with the strict
fiduciary duty imposed upon union officials by Section 501." 583 F.2d
at 836.

   Contrary to petitioner's suggestion (Pet. 18-22), there is no
conflict among the circuits on that issue.  The majority opinion on
Section 501(c) in United States v. Silverman, 430 F.2d 106, 126-127,
modified on other grounds, 439 F.2d 1198 (2d Cir. 1970), cert. denied,
402 U.S. 953 (1971), did not hold that proof of the absence of union
benefit is essential to a violation of that Section.  Rather, the
Silverman majority "accepte(d) arguendo" that a conviction under the
statute "may be made out by a demonstration of a fraudulent intent to
deprive the union of its funds and either a lack of bona fide
authorization or an absence of benefit to the labor organization from
the expenditure" and found insufficient evidence to sustain the
defendant's conviction.  Ibid.  Subsequent decisions of the Second
Circuit indicate, consistent with Bane, that the "central question" in
a Section 501(c) prosecution is whether the union official who has
expended union funds had the requisite criminal intent;  rather than
representing an element of the offense, the presence or absence of
actual benefit to the union goes to the defendant's intent.  See
United States v. Ottley, 509 F.2d 667, 671 (1975);  United States v.
Santiago, 528 F.2d 1130, 1133-1134, cert. denied, 425 U.S. 972 (1976).
 There is no reason to suppose that the Second Circuit would read its
precedents to mandate a judgment of acquittal on the facts of this
case.  /2/

   b. The paragraphs of the indictment that actually charged
petitioners with violations of Section 501(c) did not purport to limit
the government to the theory that the local unions had derived
absolutely no benefit from the salaries paid to Argie and Hughes.
Instead, those paragraphs of the indictment tracked the statute and
identified the particular payments involved.  /3/ In suggesting that
the indictment restricted the government to the theory that Argie and
Hughes performed no work whatever, petitioners rely on allegations in
the RICO counts illustrating the "manners and means of conducting the
affairs of the enterprise" charged in those counts.  Those paragraphs
chargedd that Presser and Friedman had made payments to various
individuals, including Hughes and Argie, knowing that those
individuals "failed to perform work on behalf of" the locals and had
concealed the illegality of those payments by submitting false LM-2
reports regarding employees who were "not performing the services and
duties of a business agent." C.A. Joint App. 6-9.

   On their face, these allegations did not purport to restrict the
government to a theory that Bane had expressly rejected as an
unjustifiably narrow interpretation of the statute.  The statements
that Argie and Hughes "failed to perform work" for the union and that
they were "not performing the services and duties of a business agent"
were simply allegations that the employees were not working in the
general sense -- i.e., performing the customary functions of business
agents.  Those allegations did not suggest that the RICO counts would
be fatally undercut by evidence that, during periods in which Argie
and Hughes were paid thousands of dollars from union funds, they
occasionally provided some nominal service to the union.  /4/

   In any event, as the district court held, those allegations were
surplusage with respect to the Section 501(c) violations charged in
separate sections of the indictment.  On their face, the allegations
on which petitioners rely only described actions that were "(a)mong
the means whereby (petitioners) and others conducted and participated
in the affairs of the enterprise" charged in the RICO counts.  C.A.
Joint App. 71.  Those allegations were not essential even to that
element of the RICO count;  they certainly did not limit the theoryof
the prosecution with respect to violations of Section 501(c) charged
as predicate acts or as substantive offenses.  See United States v.
Miller, 471 U.S. 130, 135 (1985) (when proof corresponds with the
elements of an offense alleged in the indictment, "(a) part of the
indictment unnecessary to and independent of the allegations of the
offense proved may normally be treated as 'a useless averment' that
'may be ignored'").

   None of the cases on which petitioners rely (Pet. 13-17) supports
reversal of thei convictions.  In United States v. Smolar, 557 F.2d
13, 18 (1st Cir.), cert. denied, 434 U.S. 971 (1977), the indictment
charged that the defendants had sold securities having "little if any
value" to a mutual fund they controlled.  At trial, however, there was
no evidence that the securities were of nominal value, and the
government sought a conviction on the theory that the defendants had
breached their fiduciary obligations to the fund.  The court held that
"the distinction between outright fraud as charged in the indictment
and a breach of fiduciary duty cannot be dismissed as insignificant."
Ibid.  Similarly, in United States v. Varoz, 740 F.2d 772, 775 (10th
Cir. 1984), the court found a prejudicial variance between an
indictment charging that a podiatrist had submitted a claim for
surgery that had not been performed and evidence that the surgery had
been performed but was unnecessary.  This case involves no shift in
the theory of prosecution comparable to those in Smolar and Varoz.

   Finally, in United States v. Marolda, 615 F.2d 867 (9th Cir. 1980),
the indictment charged that a union official violated Section 501(c)
by expending union funds "without proper authorization and without
benefit to said Local." 615 F.2d at 868 n.2.  Without determining
whether both of those allegations were essential to a conviction under
Section 501(c), the court in Marolda held that the government was
bound by Ex parte Bain, 121 U.S. 1 (1887), to prove them both.  615
F.2d at 870-871.  Since Marolda was decided, however, Ex parte Bain
has been overruled to the extent that it suggested "that it
constitutes an unconstitional amendment to drop from an indictment
those allegations that are unnecessary to an offense that is clearly
contained within it." United States v. Miller, 471 U.S. at 144.  Thus,
to the extent that Marolda suggests that the government can be
required to prove allegations unnecessary to offenses that are charged
in the indictment, it no longer remains good law.

   Here, the indictment clearly charged the Section 501(c) violations
on which petitioners were convicted;  allegations in the RICO counts
illustrating the means by which petitioners conducted the affairs of
their enterprise were unnecessary to those offenses and could thus be
disregarded.  Moreover, as the district court held, any variance
between the allegations and the proof did not prejudice petitioners in
their preparation or at trial.  Pet. App. A32-A33.

   3. Finally, petitioners argue (Pet. 24-27) that the RICO "pattern"
requirement is unconstitutionally vague on its face and as applied to
them.  That question is not properly presented by this case.
Petitioners did not preserve this issue in the district court, see
Gov't C.A. Br. 27, and the court of appeals did not address it, see
Pet. App. A4.  /5/

                              CONCLUSION

   The petition for a writ of certiorari should be denied.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   ROBERT S. MUELLER, III

      Assistant Attorney General

   RICHARD A. FRIEDMAN

      Attorney

   FEBRUARY 1991

   /1/ Presser died on July 9, 1988, prior to trial.

   /2/ Petitioners cite a number of other decisions interpreting
Section 501(c) in a variety of factual situations.  Pet. 19-20.  But
petitioners make no attempt to show that those interpretations,
applied to this case, would result in reversal of their convictions or
that those decisions conflict with one another in any significant
respect.  There is no force, therefore, to petitioner's suggestion
"that the elements of 501(c) should be delineated by this Court" in
this case.  Pet. 20.

   /3/ Count 4 is representative.  It charged (C.A. Joint App. 93):

      From on or about May 16, 1981 through on or about December 31,
      1981, the exact dates being to the Grand Jury unknown, in the
      Northern District of Ohio, Eastern Division, the Defendant,
      HAROLD FRIEDMAN, while an officer and an employee, that is
      President of the Bakery, Confectionery and Tobacco Workers
      International Union, AFL-CIO, Local 19, a labor organization
      engaged in an industry affecting commerce as defined by Section
      402(i) and (j) of Title 29, United States Code, and the
      defendant ANTHONY HUGHES unlawfully and willfully did embezzle,
      steal, abstract, and convert to the use of HAROLD FRIEDMAN and
      the use of another, that is ANTHONY HUGHES, the sum of $17,000
      more or less, of the money and funds of Local 19. All in
      violation of Title 29, United States Code, Section 501(c), and
      Title 18, United States Code, Section 2.

   /4/ Petitioners also cite government memoranda in opposition to
motions for bills of particulars in which, they contend, the
government limited itself to a no-work theory.  Pet. 8-9.  The
statements on which petitioners rely, however, were part of a general
argument that the indictment provided sufficient details of the
offenses charged;  in advancing that contention, the government did
not purport to supplement or narrow the allegations in the indictment
itself.  C.A. Joint App. 131-134, 164-166.  Indeed, the government
specifically advised the defendants that it was not required to prove
that the unions had derived no benefit whatever from the phony
business agents.  The government opposed Presser's request for
information on whether Local 19 derived any benefit from certain
payments on the following ground, among others (id. at 140 n.6):

      (A)lthough it is true that actual benefit to the union is a
      factor for the jury's consideration, lack of actual union
      benefit is not an element which the government must prove.  See
      Bane, 583 F.2d at 836.

Petitioners could not have been misled by the prosecution's memoranda
as to the nature of the offenses charged.

   /5/ In any event, the statute was not vague as applied to
petitioners' conduct -- the pertinent question raised by a vagueness
claim that does not involve an alleged infringement of a First
Amendment right.  See Village of Hoffman Estates v. Flipside, Hoffman
Estates, Inc. 455 U.S. 489, 494-495 (1982).  As this Court has held, a
pattern of racketeering activity exists if the predicate acts have
"the same or similar purposes, results, participants, victims, or
methods of commission." H.J. Inc. v. Northwester Bell Telephone Co.,
109 S. Ct. 2893, 2901 (1989).  The three racketeering acts established
here each involved embezzlement by union officials who used their
positions in the enterprise to embezzle union funds by paying salaries
to employees who performed little or no work for the union.