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. e du/thir dc ir c uit_1998/254Filed October 28, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 97-1740

UNITED STATES OF AMERICA, Appellee

v.

LOUIS PARISE, JR., Appellant

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 96-CR-273-2)

Argued April 27, 1998

BEFORE: ALITO, GARTH, and RENDELL Circuit Judges

(Filed: October 28, 1998)

BRUCE A. FRANZEL Oxenburg & Franzel 1760 Market Street, Suite 600 Philadelphia, PA 19103

Counsel for Appellant, Louis Parise, Jr.TIMOTHY R. RICE

Office of the United States Attorney 615 Chestnut Street, Suite 1250 Philadelphia, PA 19106

Counsel for the United States

OPINION OF THE COURT

RENDELL, Circuit Judge.

On January 29, 1997, Louis Parise Jr. and his fathe r, Louis Parise Sr., were convicted of various crimes arising

out of their involvement with the National Maritime Union ("NMU"). Parise Jr.'s RICO conviction under 18 U.S. C. S 1962(c) was predicated on his violation of the Pennsylvania commercial bribery statute, 18 Pa. C.S .A. S 4108(c). Specifically, Parise Jr. was found to ha ve delivered cash bribes to two "port agents" in excha nge for their referral of union members with personal injur y cases to Parise Jr.'s employer, the Sacks law firm.

On appeal Parise Jr. argues that there was insuffic ient evidence to support his RICO conviction. He also co ntends

that his actions did not constitute commercial brib ery under Pennsylvania law. We disagree with his view a s to how the law should be applied to the facts of this case, and find that the evidence was sufficient to support hi s conviction. Parise Jr. also challenges the district court's exclusion of certain testimony relating to the comm ercial bribery charge. We find this argument to be similar ly unavailing. We will thus affirm the order of the di strict

court.

I.

The convictions at issue in this case arose out of an extensive government investigation of corruption wi thin the NMU and several related organizations. The NMU represents merchant marine seafarers who work on commercial shipping vessels. One of the improprieti es revealed through the government's investigation was a

2bribery scheme devised and implemented by Louis Par ise

Sr., the President of the NMU, his son, Louis Paris e Jr., and attorneys Avrem Adler and Bernard Sacks.1 Through this plan, developed in 1988, port agents and other unio n employees provided Sacks with personal injury case referrals in exchange for cash payments.2 As part of the scheme, Parise Jr. was hired as an "investigator" f or the Sacks law firm and was responsible for delivering t he bribes to the port agents. Parise Sr. promised these legal referrals to Sacks in exchange for a kickback of 5% of the le gal fees generated through NMU cases. In 1992, a Legal Servi ces Plan ("LSP") was created through which attorneys we re to provide low or no cost legal services to union memb ers. It was hoped that these members would then be more lik ely to retain designated attorneys, including Sacks, fo r their

more lucrative cases. Parise Jr. was named as "coadministrator" of the LSP.

Sacks cooperated with the government investigation and during the trial testified at length about the brib ery scheme. Sacks explained that Parise Jr.'s role was to pay port agents in particular cities a set fee for refe rral of personal injury cases to the Sacks firm. Several po rt agents, including Floyd Jones, John Pegan, and Debr a Rywelski,3 testified about the money paid to them b y Parise Jr. for these case referrals. Other witnesses provi ded additional evidence relating to Parise Jr.'s role i n the NMU and in carrying out the bribery scheme. After a thr ee week trial, the jury found Parise Jr. guilty of the RICO violation,

of Travel Act violations and of RICO forfeiture. Th e RICO conviction was based on the jury's finding that Par ise Jr. had bribed Pegan and Rywelski in violation of Pennsylvania's commercial bribery statute. The dist rict court denied Parise Jr.'s post-trial motion for acq uittal or a new trial, and Parise Jr. appeals the judgment of c onviction

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1. Adler died before this case was brought to trial

.

2. Between 1988-93 Sacks earned over $1.4 million i n legal fees from these NMU personal injury cases.

3. Rywelski was a NMU employee, but was not officia lly a "port agent." She served as a Pension and Welfare Plan Representa tive who helped

union members with their benefits.

3entered on September 11, 1997. This court has juris diction

to review the final judgment of the district court pursuant

to 28 U.S.C. S 1291.

The jury verdict in this case "must be sustained if there is substantial evidence, taking the view most favor able to the Government, to support it." Glasser v. United S tates, 315 U.S. 60, 80 (1942). See United States v. Aguila r, 843 F.2d 155, 157 (3d Cir. 1988). To the extent that Pa rise Jr.'s arguments raise issues of statutory interpretation, our review is plenary. See United States v. Hayden, 64 F.3d 126, 128 (3d Cir. 1995).

II.

A. RICO violation

Parise Jr. offers two related challenges to the suf ficiency

of the evidence which sustained his conviction unde r RICO. First, Parise Jr. argues that the government failed to adequately connect him with the indicted "enterpris e" because several of the racketeering acts charged in the indictment were committed prior to the existence of the Legal Services Plan, and even those acts which occu rred after the formation of the LSP were not directly li nked with his role in the LSP. Secondly, Parise Jr. contends that the government failed to demonstrate that he participat ed in directing the affairs of the enterprise as required to sustain a RICO conviction. In addition, Parise Jr. challeng es the district court's jury instruction relating to the r equisite showing that must be made to establish "association "

under RICO.

1. Connection with an "enterprise"

The RICO statute provides that "it shall be unlawfu l for any person employed by or associated with any enter prise engaged in . . . interstate or foreign commerce, to conduct or participate, directly or indirectly, in the cond uct of such enterprise's affairs through a pattern of racketeer ing activity or collection of unlawful debt." 18 U.S.C. S 1962(c). A conviction under this statute requires that the government prove the following four elements:

4(1) the existence of an enterprise affecting inter state

commerce; (2) that the defendant was employe d by o r associated with the enterprise; (3) that the defen dant participated, either directly or indirectly, in the conduct or the affairs of the enterprise; and (4) th at he or she participated through a pattern of racketeeri ng activity.

United States v. Console, 13 F.3d 641, 652-53 (3d C ir. 1993) (citation omitted).

The statute defines an enterprise as "any individua l, partnership, corporation, association, or other leg al entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. S 1961(4). The indictment in this case charged that four legal ent ities made up the RICO enterprise: (1) the National Mari time Union ("NMU"); the NMU Pension and Welfare Plan; (3 ) the Committee for the Administration of the NMU; and (4 ) the Legal Services Plan ("LSP").

Parise Jr. contends that because the government all eged in the indictment that the enterprise -- which we w ill call the "NMU Enterprise" -- was comprised of four organizations, no "enterprise" could have existed p rior to September 1992, when the fourth organization, the L SP, was created. Therefore, Parise Jr. asserts, alleged illegal activity which took place before September 1992 can not properly serve as the basis for his RICO liability. 4

Parise Jr.'s argument fails to appreciate the natur e of an

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4. The indictment characterized Parise Jr.'s role a s follows:

From in or about late 1988 to the present . . . Louis Parise, Jr.

and others known and unknown to the grand jury, being persons employed by and associated with the enterpri se . . . knowingly, unlawfully, and willfully conducted and part icipated, directly and indirectly, in the conduct of the affairs of the enterprise . . . .

Defendant Louis Parise, Jr., used his positi on as an investigator

for attorney Sacks and as a co-administrator of the ITPE-NMU Legal Benefits Plan, to promote and aid and abet c ommercial bribery by traveling in interstate commerce, and using interstate facilities,

to deliver cash payments and things of value to union officials who referred injured union members to attorney S acks as their lawyer

. . . .

5"enterprise" as defined by the RICO statute. The fo ur

organizations were included in the indictment becau se all were channels through which illegal activity was ta king place and through which the NMU Enterprise operated

. This does not mean, however, that no illegal activi ty of the enterprise could occur prior to the existence or en try of one

of the indicted entities. In order to establish the existence of an "enterprise" for the purposes of RICO, the go vernment must demonstrate that there is "an ongoing organiza tion" whose "various associates function as a continuing unit." See United States v. Riccobene, 709 F.2d 214, 221 ( 3d Cir. 1983) (citing United States v. Turkette, 452 U.S. 5 76, 583 (1981)). However, "continuity does not require that each member of the enterprise participate in it from beg inning to end." United States v. Feldman, 853 F.2d 648, 659 ( 9th Cir. 1988); see United States v. Hewes, 729 F.2d 1302, 1 310-11 (11th Cir. 1984) (rejecting the argument that gover nment must prove participation of all members throughout the life of the enterprise). Rather, the government must demonstrate that all alleged members who participat ed at one time or another were part of an ongoing enterpr ise with a shared "organizational pattern" and "system of au thority." United States v. Lemm, 680 F.2d 1193, 1199 (8th Cir

. 1982).

The evidence adduced at trial demonstrated that the NMU Enterprise existed prior to September 1992 and that upon its formation, the LSP became part of the ongo ing enterprise which satisfied the organizational and s tructural requirements of Riccobene. 709 F.2d at 221. The LSP was developed as another method of generating personal injury cases; the pursuit of these cases was already an ac tivity of the NMU Enterprise. The major participants in the enterprise remained essentially the same from 1988 on, demonstrating the continuity of the enterprise. The testimony showed that during this period Louis Pari se Sr. was the "system of authority" which united all of t he organizations which formed the NMU Enterprise: the elder Parise had relatively unfettered discretion to dire ct both the legal and illegal activities of the union and its r elated organizations. Because the NMU Enterprise existed b efore the formation of the LSP, Parise Jr.'s actions prio r to 1992 could properly form the basis for his RICO convicti on.

6Parise Jr. next asserts that all of the racketeerin g charges

-- even those relating to post-1992 activity -- are deficient because the government failed to connect any of his alleged acts of bribery with his position as co-administrat or of the

LSP. Parise Jr. contends that his actions taken whi le he was an investigator for the Sacks law firm cannot f orm the

basis for his RICO conviction because the law firm was not named as one of the organizations which formed the "enterprise." However, this argument misconstrues t he government's burden. At trial, the government neede d to demonstrate that Parise Jr. participated, directly or indirectly, in the conduct of the NMU Enterprise's affairs through a pattern of racketeering activity. In so d oing, however, the government was not limited to demonstr ating that Parise Jr.'s participation in the affairs of t he enterprise

flowed from his official role within the LSP. In fa ct, from the

evidence adduced at trial it is clear that Parise J r.'s eventual position with the LSP was not necessary to establish that he associated with or participated i n the affairs of the NMU Enterprise. Rather, as is discus sed below, we agree with Parise Jr. that his actions as coadministrator of the LSP were merely a continuation of his previously established pattern of racketeering acti vities.

Parise Jr. also appears to be arguing that he could only have been found to have "associated with" the organ ization in which he held a formal position, but the languag e of the

RICO statute leaves no room for this contention. Th e law explicitly states that a RICO defendant must be emp loyed by or associated with an enterprise. 18 U.S.C. S 19 62(c). For the purposes of RICO, the threshold showing of

"association" is not difficult to establish: it is satisfied by proof that the defendant was "aware of at least the general existence of the enterprise named in the indictment ." United States v. Eufrasio, 935 F.2d 553, 577 n.29 (3d Cir. 1991) (quoting United States v. Castellano, 610 F. Supp. 1359, 1401-02 (S.D.N.Y. 1985)); see also Console, 13 F.3d at 653. That is, a defendant must be aware of the general n ature of the enterprise and know that the enterprise extends beyond his individual role. See United States v. Rastelli, 870 F.2d 822, 828 (2d Cir. 1989). Here, the necessary showin g of "association" was easily met. The evidence showed t hat Parise Jr. attended the initial meeting during whic h the

7bribery scheme was discussed -- this fact alone is sufficient

to demonstrate that he was aware of the NMU Enterpr ise and knew that the activities of the NMU Enterprise extended beyond his role in bribing union employees

.

2. Participation in the conduct of the affairs of t he enterprise

We now turn our attention to the third element esse ntial to a RICO conviction -- namely, whether the governm ent's evidence demonstrated that Parise Jr. participated in the conduct of the affairs of the enterprise. Our analy sis of this claim must begin with an examination of the definit ion of "participation" under S 1962(c) as clarified by the Supreme Court in Reves v. Ernst & Young, 507 U.S. 170 (1993 ). In Reves, the Court endorsed the "operation or managem ent" test to determine whether a defendant participated in the conduct of an enterprise's affairs. Id. at 184. Acc ording to Reves, "[i]n order to `participate, directly or ind irectly, in the conduct of such enterprise's affairs,' one must hav e some part in directing those affairs." Id. at 179. Howev er, one need not hold a formal position within an enterpris e in order to "participate" in its affairs. Id. at 179. Further, the "operation or management" test does not limit RICO liability to upper management because "an enterprise is`opera ted' not just by upper management but also by lower-rung participants in the enterprise who are under the di rection of upper management." Id. at 184. In so holding, th e Court made clear that RICO liability may extend to those who do not hold a managerial position within an enterprise , but who do nonetheless knowingly further the illegal ai ms of the enterprise by carrying out the directives of th ose in

control.

In applying Reves, we have stated that the"operatio n or management" test is designed to limit RICO liabilit y under S 1962(c) to those situations in which the governme nt can demonstrate "a nexus between the person and the con duct in the affairs of an enterprise." University of Mar yland at Baltimore v. Peat, Marwick, Main & Co., 996 F.2d 15 34, 1539 (3d Cir. 1993).5 The First Circuit has stated that RICO

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5. Although Reves was a civil RICO case, the "opera tion or management" test is applicable to criminal RICO cases as well. See, e.g., United

States v. Antar, 53 F.3d 568, 580-81 (3d Cir. 1995).

8liability extends to those "plainly integral to car rying out"

the enterprise's activities. See United States v. S hifman, 124 F.3d 31, 36 (1st Cir. 1997) (citation omitted), cer t. denied, 118 S. Ct. 1053 (1998).

It is clear that Parise Jr. participated in the con duct of the affairs of the NMU Enterprise for several years before he was given the formal title of "co-administrator" of the LSP. In his role as investigator for the Sacks law firm, Parise Jr. was integral to the enterprise's plan to funnel per sonal injury cases to Sacks in order to reap a percentage of the money generated. Parise Jr. traveled to port cities paying off the union agents and informing them that Sacks was the official NMU attorney for the East Coast. Thus, eve n before he had a formal role within the LSP, Parise Jr. was deeply involved in -- and integral to -- the operation of the NMU Enterprise. The government produced evidence that P arise Jr. was acting at the direction of his father, the union President -- clearly upper level management -- to c arry out the illegal activities of the NMU Enterprise. As a result of Parise Jr.'s work, his father, the head of the ente rprise,

received substantial kickbacks from Sacks.

In 1992, in furtherance of the scheme and reflectiv e of his important role in the enterprise, Parise Jr. be came coadministrator of the LSP. Through this official pos ition, he maintained and expanded his role in operating the N MU Enterprise. In addition to continuing the payoff arrangement with port agents, he also coordinated t he effort of the LSP to select local attorneys to do t he routine legal work for union members -- and to channel more lucrative cases to attorneys selected by Parise Sr.

Reves focused on the RICO liability of those "outsi de" an enterprise who may assist in furthering the illegal activities of the enterprise. 507 U.S. at 183-85. The Court di d not reach the issue of the liability of those "inside," specifically declining to determine "how far S 1962(c) extends d own the ladder of operation." Id. at 184 n.9. However, we n eed not

dwell on this issue because Parise Jr.'s substantia l

involvement in the criminal activities of the NMU E nterprise does not present a close case. We are not concerned with improperly extending RICO liability to a low-level employee

who was unaware of the criminal activities of the l arger

9enterprise. See United States v. Viola, 35 F.3d 37, 43 (2d

Cir. 1994) (reversing conviction of defendant who d id light clean-up and maintenance work on the ground that th e government had failed to show that he exercised any "discretionary authority" or that he "was even awar e of the broader enterprise"). Sacks testified that Parise J r. was present during the original meeting where the bribe ry plan was discussed. The fact that he continued to play a n essential role in implementing the scheme was well documented during the trial. Parise Jr. does not co ntend on appeal that he was an unwitting -- or unwilling-- a ctor.

From the extensive evidence presented at trial, the jury could easily conclude that the government establish ed a

nexus between Parise Jr. and the affairs of the NMU Enterprise. Parise Jr. played a role in directing t he affairs of the NMU Enterprise as required by Reves and coul d be found criminally liable under RICO.

3. Challenge to the jury instruction

Parise Jr. next challenges -- as he did at trial-- the district court's jury instructions in which the dis trict court advised the jury that "the Government has alleged t hat

defendant Louis Parise Jr. was associated with the enterprise through his dealing[s] with various NMU officials you have heard testify."6 Parise Jr. contends that this statement led the jury to believe that it couldfind proof of the requisite association by virtue of the alleged bribery of port agents Jones, Pegan, and Rywelski even if ther e was no other proof that Parise Jr. had associated with the NMU Enterprise. However, giving the term "dealings" its plain meaning, we interpret it to mean all interactions o r contacts between the union officials and Parise Jr. during which they had the opportunity to learn about his r ole in the NMU Enterprise. There is no basis either in the context

of the instruction or the evidence of the case to e quate the

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6. This instruction will be reviewed to determine i f, taken as a whole and in the light of the evidence, it fairly and adequat ely submitted the issue to the jury. See United States v. Traitz, 871 F.2d 368, 385 (3d Cir. 1989) (citation omitted). No error will be found if the d istrict court correctly communicated the substance of the law to the jury s o that the jury was

not misled as to the relevant law or issues. Id.

10word "dealings" with payoffs or bribes. The substan ce of the

testimony of NMU employees such as Pegan and Rywels ki was not limited to their discussion of payoffs for legal referrals, but also included testimony in which the y described Parise Jr.'s overall involvement with the NMU Enterprise. Furthermore this jury instruction refer red to "various NMU officials" who testified, including Ja mes Overstreet, a business agent for the NMU, and Kenne th Gerasimos, a former Vice President of the union. Bo th of these officials testified that Parise Jr. was prese nt at union meetings and events. The entire testimony of the of ficials as to "dealings" with NMU officials formed the evident iary basis for a jury determination that Parise Jr. was "associated with" the enterprise.

Finally, it is important that the challenged portio n of the charge be read in the context of the entire set of instructions. The district court did instruct the j ury as to the need for proof of Parise Jr.'s involvement with the enterprise and its affairs as such:

[T]he Government must establish that each de fendant was able to commit the racketeering offense solely by virtue of his position in the enterprise or his involvement in or participation in or contro l over the affairs of the enterprise. The Government mu st also establish beyond a reasonable doubt that the alleged racketeering acts were committed in the cond uct of the affairs of the enterprise.

The court's instructions made clear that conduct re lating to the NMU Enterprise must form the basis for RICO lia bility. Therefore, we find that the district court's instru ctions correctly conveyed the substance of the law and fai rly and adequately submitted this issue to the jury.

B. Predicate Acts of Commercial Bribery

In order to prove a RICO violation, the government must demonstrate that the defendant participated in the operation of an enterprise "through a pattern of racketeering activity . . ." 18 U.S.C. S 1962(c).7 A pattern is

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7. "Racketeering activity" is defined, in pertinent part, as "any act or threat involving murder, kidnaping, gambling, arson , robbery, bribery,

11established by proving that the defendant committed two or

more illegal acts of the type associated with organ ized crime. See Riccobene, 709 F.2d at 226-27. The indic tment alleged that Parise Jr. had violated Pennsylvania's law against commercial bribery by paying port agents to refer personal injury cases to Sacks. The testimony elici ted at trial established that port agents were favoring Sa cks in exchange for payoffs from Parise Jr. The jury found that Parise Jr. had bribed two union employees, Pegan an d Rywelski. Pennsylvania's statute defines commercial bribery

as follows:

An employee, agent or fiduciary commits a misdemeanor of the second degree when, witho ut the consent of his employer or principal, he sol icits, accepts, or agrees to accept any benefit fro m another person upon agreement or understanding that such

benefit will influence his conduct in relati on to the affairs of his employer or principal.

18 Pa. C.S.A. S 4108(a). Under the following provis ion, the statute also criminalizes solicitation of bribes:"[ a] person commits a misdemeanor of the second degree if he co nfers, or offers or agrees to confer, any benefit the acce ptance of which would be criminal under subsections (a) or (b ) or this section." 18 Pa. C.S.A. S 4108(c). Thus, by conferr ing the benefit on the union port agents, Parise Jr. could be found guilty of commercial bribery.

Parise Jr. argues that giving money to a union agen t or employee for the referral of personal injury cases does not

constitute "conduct in relation to the affairs of" the union as required to establish commercial bribery under Pennsylvania law. Parise Jr. is essentially contend ing that because referring seamen to lawyers is not included among a port agent's official duties, it cannot constitut e "conduct in relation to the affairs of" the employer. He ass erts that the union -- the employer in this case -- has no in terest or stake in which lawyer an injured worker chooses, an d that

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extortion, dealing in obscene matter, or dealing in a controlled substance or listed chemical . . . which is chargeable under State law and punishable by imprisonment for more than one year." 18 U.S.C. S 1961(1)(A).

12providing legal referrals is not within the scope o f the port

agents' employment. The government argues that Pari se Jr.'s reading of the statute, especially in light o f the facts of this case, is too constricted. It urges that the "a ffairs in relation to" language of the statute encompasses employment-related activity beyond that which is pa rt of an employee's official duties.

As the present case arises under this court's feder al question jurisdiction, we will address all of the i ssues necessary to our ruling, including questions involv ing the interpretation of state law. See United States v. D 'Amato, 436 F.2d 52, 54 (3d Cir. 1970). In interpreting the text of 18 Pa. C.S.A. S 4108, we are mindful that the Const itution requires that criminal laws be strictly construed. Due process mandates that criminal statutes give "fair warning . . . to the world in language that the common worl d will understand, of what the law intends to do if a cert ain line is passed." McBoyle v. United States, 283 U.S. 25, 27 (1931); see also United States v. Lanier, 520 U.S. 259 (1997). In addition, Pennsylvania's laws regarding statutory construction dictate that penal provision are to be strictly interpreted. 1 Pa. C.S.A. S 1928(b)(1). However, th e Pennsylvania courts have also held that "strict con struction does not require that the words of a criminal statu te be given their narrowest meaning or that the legislatu re's evident intent be disregarded." Commonwealth v. Gor don, 515 A.2d 558, 561 (Pa. 1986). Furthermore, we must also refrain from reading additional provisions into a s tatute when its meaning is clear. See In re J.S., 586 A.2d 909, 913 (Pa. 1991). Against this backdrop, we turn our atte ntion to the meaning of the statute and the evidence offered to prove that the port agents' receipt of money influencing their

conduct was "in relation to the affairs" of their e mployer,

the union.

a. Requirements for Commercial Bribery under the Pennsylvania Statute

At the outset, it must be noted that the language o f the Pennsylvania commercial bribery statute makes its r each quite broad. It requires that an employee solicit o r accept a benefit from another in order to influence the empl oyee's conduct in relation to his employer's affairs. The statute

13contains no requirement that the affected conduct b e in

relation to the official duties of an agent or empl oyee, nor does it require a showing that an offender's conduc t was adverse to the interests of the employer. In constr uing the language of the commercial bribery statute and in determining the meaning of "conduct in relation to the affairs" of an employer, we turn to the case of Commonwealth v. Bellis, 399 A.2d 397 (Pa. 1979), fo r direction.

In Bellis -- the only Pennsylvania Supreme Court ca se which discusses this issue directly -- the court af firmed the judgment of sentence of a city councilman convicted of commercial bribery.8 Bellis, 399 A.2d at 400. Counc ilman Bellis had represented private parties before city agencies in order to help these companies secure contracts w ith these agencies. The companies rewarded his efforts accordingly. Among other contentions, Bellis argued to the court that he was not guilty of commercial bribery because

the conduct at issue did not interfere with his off icial duties

as a councilman. His conduct involved contracts bet ween third parties and other city agencies and departmen ts, quite apart from any matter before city council or otherwise affecting his role or responsibilities as a council man. The

Bellis court found that it was uncontested that the defendant's acceptance of these bribes "did not aff ect the performance of his official duties as a city counci lman" and that "he did not take any action in City Council on behalf of private parties." Id. at 398. The court stated, however, that whether a particular activity was among an emp loyee's

"official duties" was "irrelevant" to the commercia l bribery inquiry. Id. at 400. Thus, the Pennsylvania Supreme Court has rejected the argument that the bribe must impac t one's official duties in order to comprise "conduct in re lation to the affairs of his employer or principal."

The Bellis court recognized that commercial bribery was criminalized on the theoretical premise that such a cts represent a violation of the duty of loyalty that a n employee owes to an employer. The court stated that

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8. Bellis was convicted under 18 Pa. C.S.A. S 4667, the predecessor of 18

Pa. C.S.A. S 4108.

14[t]he purpose of Section 4667 is to require an"agent,

employe or servant" to possess an undivided loyalty to his principal. It is impossible for an agent to retain this loyalty as long as he solicits and/or receiv es money from third parties in return for acting on t heir behalf (i.e., "showing . . . favor or disfavor") in his principal's affairs. By representing private parties bef ore city officials while he was a councilman, appella nt showed "favor or disfavor" in the affairs of his pr incipal (the City of Philadelphia) in that he negotiated on behalf of and in the best interests of private parties in their dealings with the city. Hence, appellant vio lated

Section 4667.

Bellis, 399 A.2d at 400. Thus, the court determined that a violation of the employee's duty automatically occu rs when an agent or employee offers or receives money which causes him to act in a certain way -- namely as the payor wishes -- in the conduct of the affairs of his employer. T he court viewed the violation as being implicit in the condu ct. The act of accepting a benefit to show favor is the gra vamen of

the crime.

The above-quoted language in Bellis makes it disloy al, and criminal, for an employee to accept money to sh ow favor to third parties in his principal's affairs. We view this reasoning as undermining the position taken by our dissenting colleague that being influenced for mone y in one's job is criminal only if found to be against t he interests of the employer. Neither the Pennsylvania legislatu re, nor its courts, have inserted such a requirement into t he offense of commercial bribery. The Bellis court did not examine the contracts in question to determine whet her they were good for the City. Nor do we believe that such an inquiry is appropriate under the plain meaning of t he

statute. The Bellis court made clear that the showi ng of favor or disfavor on the basis of money paid is the harm addressed by the commercial bribery statute. The co urt
need not make a determination as to whether the cho ice of a particular vendor influenced by a monetary paymen t was detrimental to the employer. In U.S. v. Johns, 742 F. Supp. 196, 220 (E.D. Pa. 1990), the court found the defen dant guilty of commercial bribery under S 4108 even thou gh the

15parties had stipulated that the price and quality o f the

products obtained from the favored vendor were "mor e favorable" than any offered by competitors. While i t is true that other states have included this requirement as a statutory element or interpreted it to be a require ment, those cases are not our guide.9 Courts should not l egislate by reading into the laws provisions not included by the legislature.10 This principle was recently reiterat ed by this

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9. At least one state includes the words "contrary to the interests of the employer" within its statute. See Utah Code Ann. S 76-6-508 (1953). Another requires that the "conduct of the employee cause[ ] economic loss to the employer." See Ariz. Rev. Stat. S 13-26 05. Pennsylvania's statute contains no such limiting language. It is t rue that "[i]t appears that in New York, actions which might otherwise con travene Penal S 439 [commercial bribery statute] are not criminal if th ey do not affect the employer's interest in any way." D.E. Ytreberg, Ann otation, Validity and Construction of Statutes Punishing Commercial Bribe ry, 1 A.L.R.3d 1350, 1361 (1965) (citing People v. Jacobs, 130 N.E.2d 63 6, 637 (N.Y. 1955) and People v. Graf, 24 N.Y.S.2d 683 (App. Div. 1941 )). However, we believe that the dissent has misinterpreted this ex cerpt as stating a requirement which has been read into the statute by all states. As we discuss, we find the reasoning of these cases to be inconsistent with the Pennsylvania courts' interpretation of this state's commercial bribery

statute. The dissent also cites Jackson v. Radcliff e, 795 F. Supp. 197, 206 (S.D. Tex. 1992) in support of the proposition that payments in exchange for referrals will only constitute commerc ial bribery where an employee has put the interests of the payor above t he contrary interest of the employer. In that case, the court found that the kickbacks at issue simply did not constitute a bribe or benefit as req uired by the statute. Thus, the court never reached the issue of whether the employer was adversely impacted by the scheme.

10. The dissent cites State v. Nadeau, 105 A.2d 194 (R.I. 1954) for the proposition that it is not commercial bribery to in duce an agent to accept a payment in an attempt to influence conduct over w hich the agent had

no control. We note first that Nadeau had been conv icted under Rhode Island's statute prohibiting bribery of a public of ficial, not under that state's commercial bribery statute. Nadeau is thus inapposite because its language regarding "official acts" seems clearly li mited to the context in which that appeal was brought, namely, a government official accused of taking bribes in connection with his duties as an o fficial. Further, to

the extent that the holding of Nadeau can be applied to commercial bribery, we do not find it to be consistent with Pennsylvani a precedent. The court

in Bellis did not concern itself with whether Counc ilman Bellis could actually control or influence the contracting pract ices of the various city agencies involved. Again, the imposition of element s not present in the

statute is not warranted.16court in Brokerage Concepts, Inc. v. U.S. Healthcar e, Inc.,

140 F.3d 494, 527-28 (3d Cir. 1998). There, interpr eting a different section of Pennsylvania's commercial brib ery statute, we rejected an attempt by one of the parti es to
insert an additional element -- that of the defenda nt's

motivation -- into the statute. Id. We noted that t he crime of commercial bribery is "carefully circumscribed,"

consistent with our view that elements which do not appear in the statutory language should not be read into t he law.11

In order to find the payment of money influenced th e employee's conduct in relation to the employer's af fairs, we must define the scope of the union's affairs. In so doing, we will consider not only the mission and activities o f the union but whether the conduct in question was consi stent with the scope of the union agents' employment. Thu s, in this case, we must determine if the port agents wer e performing their jobs in advising the seamen as to counsel for work-related injuries and whether this practice of referral was a concern of the union and part of its affairs. Appellants do not seek to define "affairs" but cont end that whatever it means, the referral to counsel was not part of

the affairs of the union. We believe the evidence s upports the opposite conclusion.

b. The Union's Affairs

The purpose of the NMU, as set forth in its constit ution, is described as helping "needy, sick and distressed "

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11. Having determined that the government was not o bligated to prove as a separate element of the commercial bribery offens e that the agent was acting against the interest of the employer, we nee d not reach the issue raised by the dissent that the conduct in question was not contrary to the interest of the employer because the employer i n this case condoned the corrupt activity. However, we question the assu mption inherent in that argument that the corrupt management of the un ion should be equated with the union entity itself for the purpos es of determining what was "contrary to its interest." Simply because Pari se Sr. and some other corrupt union leaders knew that some port agents we re bribed does not mean that the practice could not have been against the interest of the port agents' employer, the union. The union has an existence separate from its leadership -- its mission is to represent and assist union

members.

17members. One union official described the role of t he union

in the following terms:

[T]he NMU has a very proud history. And I th ink we're important to our members. Certainly we repre sent them before the companies. We are responsibl e for their collective bargaining agreement overal l, but we also represent them on a day to day basis. I f a seaman has a problem aboard a ship, he will come to the hall

and talk to a union official.

J.A. at 1308. Other testimony supported this descri ption of

the union as concerned with the work-related welfar e of union members. We can easily take judicial notice o f the fact that the union movement exists of, by, and for workers and dedicates itself to their welfare and the recog nition of their rights. Seeking redress for work-related inju ry through proper legal representation easily fits within this sphere of

the union's interest and affairs. In addition to th e fact that making attorney referrals was consistent with the p urposes of the union, there was significant evidence presen ted from which the jury could have determined that the union concerned itself with its members' legal representa tion and that making attorney referrals was part of the unio n's

affairs.

The testimony demonstrated that the job of port age nt involved a wide range of tasks encompassing as many different aspects as there are facets of the union members' work-related needs. J.A. at 1309. One agent explain ed that in addition to taking care of finances he enforced ship rules, took care of grievances and supervised the o peration

of the union hall. J.A. at 594. Another stated that as the business agent of the port he would "[t]ake care of all the union business, ship people out, take care of my me mbers." J.A. at 637. While in some types of work, helping o thers mights be viewed as incidental to a job function, w e view the union - port agent - member relationship depict ed here to provide a unique setting in which assistance of this nature was integral to, not incidental to, the unio n's business of caring for its members. In describing h er job as a Pension and Welfare Plan Representative, Rywelski said

that she assisted union members and stated of this population, "the average seaman is not well educate d and

18they need -- a lot of them can barely read and they need

help preparing these forms. A lot of them, they don 't understand them and they just need assistance." J.A . at

521-22.

Thus, the union through its port agents and other employees, served as counselors and helpers of this itinerant, seafaring population. Consistent with th is role, making attorney referrals was a service routinely p rovided to the seamen coming into port by port agents and o ther union employees. Union members testified that they relied on port agents for attorney referrals after sufferi ng an onthe-job injury. J.A. at 507; 1201. It was well-know n among union members that port agents provided such referr als. Significantly, there was no evidence presented that union members, officials, or employees believed that maki ng attorney referrals was inappropriate or beyond the scope of the port agents' employment or the union's sphere o f interest. The evidence is clear that these employee s provided attorney referrals to injured members and that this practice was consistent with the mission of th e NMU. This practice furthered the union's express goal of assisting sick or needy members.

Further, not all union employees received payoffs f or making these referrals. Gerasimos, a union official , testified that assisting members with legal representation wa s"an unofficial duty" of port agents and that as a port agent he had provided such referrals without receiving any payments. J.A. at 737-38. Another official, a Vice President of the NMU, testified that she had never taken any money for making attorney referrals. J.A. at 1311.12

Additionally, in determining that providing attorne y referrals was conduct "in relation to the affairs" of the union, we cannot ignore the NMU's involvement in th e business of legal services and referrals. Parise Sr . circulated a letter in which he named individual lawyers as th e official

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12. This Vice President testified that while she kn ew port agents made referrals to personal injury lawyers, she was unawa re that some received payments or fees in exchange for making these refer rals. J.A. at 1310.

This contradicts the dissent's view that "the entir e Union leadership knew of cash payments." Dissent at 28.

19"union attorneys" for particular geographic regions . Sacks

was named as the official attorney for the East Coa st and was given office space in the union hall in New Orl eans. In addition, members of the NMU Enterprise, including Parise Sr. and Jr., established the Legal Services Plan fo r the purpose of providing routine legal services to unio n members -- hoping that participating attorneys woul d eventually be retained for lucrative personal injur y cases. Thus, in the present case, Parise Sr. and others in the NMU Enterprise went out of their way to make the legal concerns of union members part of the NMU's "affairs."13

We believe that the facts of this case clearly brin g the agents' conduct within the ambit of their jobs for the union and that the referrals of seamen to counsel was par t and parcel of the affairs of the union. Union employees were able to be bribed by virtue of their employment wit h the union; that is, they held positions in which they w ere expected to counsel and advise union members. The injuries for which members required legal represent ation were sustained on-the-job. That attorney referrals were given for employment-related injuries further stren gthens the relationship between the role of the union and these services. This practice is easily within the explic it mission of the NMU. Having examined the language of the sta tute and the facts of this case, we conclude that provid ing attorney referrals constituted conduct in relation to the

affairs of the union.

While not specifically challenged by the appellant, we also note that the other requisite under the commercial bribery

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13. We recognize that the involvement of the NMU in the "legal affairs" of the union members was undertaken by Parise Sr. -- a t least in part -- for his own financial gain. Thus, Parise Sr.'s effo rts in this regard are

not dispositive of the fact that attorney referrals and legal services were
part of the union's affairs. However, this involvement m ust be viewed in the context of the evidence that providing attorney ref errals was a common practice of the port agents. In addition, there was no testimony offered that any union members or officials questioned the use of union space for this purpose or establishment of the LSP to aid the seamen in their legal affairs. Providing these services was conside red to be a legitimate activity of the union which furthered its mission o f helping needy

members.

20statute, that is, that the employee be influenced t o act in a

particular way in relation to the employer's affair s is also shown by the evidence. The payments in this case cl early influenced the conduct of the port agents. These ag ents
testified that their referrals were not based on a determination that Sacks was the best lawyer to rep resent injured union members. J.A. at 599; 640. Rywelski s tated that she knew nothing about Sacks's skills as a law yer or the fees he charged. J.A. at 528. In fact, when ask ed whether he was chosen to be the "NMU attorney" beca use he was a good lawyer, Sacks himself replied, "No, I got picked because I could pay off the agents. I had th e money to do it." J.A. at 255. Both Pegan and Rywelski tes tified that they understood that they were receiving money to make referrals to Sacks -- they received a benefit to
influence their conduct in relation to the union's affairs.

The dissent urges that our view of the relationship of lawyer referrals to the unions' affairs is misguide d and attempts to analogize this situation to a hospital' s lack of interest in a doctor's referral of a patient.14 We are also chastised for going beyond the classic example of c onflict of interest depicted in Bellis. It is our ruling, howe ver, that the evidence at trial provided ample support for the ju ry's finding that, given the unique relationship among t he union, its members, and the port agents, the commercial Pennsylvania bribery statute had been violated.

The evidence and the case law support the conclusio n that the union employees' conduct in these matters constituted the acceptance of money to affect condu ct in relation to the affairs of the employer. Given the union's mission, the nature of the port agents' work, and t he subject matter and nature of the referrals, the jur y could reasonably find, as it did, that the agents' conduc t violated Pennsylvania's commercial bribery statute and that Parise Jr., as solicitor, was guilty of this underlying of fense for the purposes of the RICO conviction.

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14. In order for this analogy to be apposite, the h ospital would have to be made up of, and exist solely by reason of, the p atients as its members, and the doctor's sole responsibility, as c harged by the hospital, would be to further the hospital's missio n and assist the members/patients and provide for their needs. This is not the case.

21C. Exclusion of evidence

Finally, Parise Jr. contends that the district cour t improperly excluded relevant testimony of a governm ent
witness on cross examination as to the non-criminal intent of the recipient of the alleged commercial bribe. T he district

court's exclusion of evidence is reviewed for abuse of discretion. See Abrams v. Lightolier Inc., 50 F.3d 1204, 1213 (3d Cir. 1995).

Pennsylvania's commercial bribery statute requires the establishment of an agreement or understanding betw een both parties that the benefit offered will influenc e conduct in relation to the affairs of the employer. 18 Pa. C.S. S 4108(c). Parise Jr. argues that the district cour t erred in excluding testimony which related to whether Rywels ki thought she was "doing something wrong" or"committi ng a crime" when she took money from Parise Jr. The dist rict

court excluded the evidence because her state of mi nd regarding the criminal nature of the conduct was ir relevant. We agree. Parise Jr. confuses the need to show that there was an "agreement or understanding" with evidence o f the intent or state-of-mind of the parties. The statute does not require that the parties knew that their agreement was wrong or illegal. The government did elicit relevan t testimony from both Pegan and Rywelski that they understood that the payments they received from Par ise Jr. were for referrals to lawyers. Thus, the district c ourt did not exclude evidence which related to Rywelski's belief about whether an agreement or understanding had been form ed. It excluded only that which was irrelevant -- evide nce as to whether Rywelski had a criminal state of mind. Ther efore, the district court's exclusion of that portion of R ywelski's testimony was not an abuse of discretion.

III.

Having considered all of the issues raised by Paris e Jr. in this appeal, we find them to be without merit. Ther efore, the judgment of the district court and its order de nying the defendant's post-trial motion will be affirmed.

22GARTH, Circuit Judge, dissenting:

Louis Parise, Jr. has been convicted and sentenced to serve thirty months in federal prison for racketeer ing. The jury convicted Parise of engaging in a pattern of racketeering acts by making cash payments to union officials John Pegan and Deborah Rywelski in exchan ge for referring injured union members to an attorney asso ciated with Parise. The difficult question raised in this appeal is whether Parise's conduct qualifies as a "racketeeri ng activity," which turns on whether his conduct const ituted a violation of Pennsylvania's commercial bribery stat ute, 18 Pa. C.S.A. S 4108. See 18 U.S.C. S 1962(c); Brokera ge Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 4 94, 521 (3d Cir. 1998). If Parise's conduct did not violate S 4108,

then his RICO conviction cannot stand.

The government's theory is that Parise's referral payments violated S 4108 because Pegan and Rywelski

acted "in relation to the affairs" of the union whe n they referred union members to Parise and Bernard Sacks, Esq. in exchange for payments from Parise. The majority has agreed with this theory, and has affirmed Parise's

conviction and sentence.

I disagree with the majority's conclusion that Pari se's conduct violated S 4108. I believe that the majorit y's broad interpretation of the "in relation to the affairs" language of S 4108 represents an unwarranted expansion of its s cope contrary to its "carefully circumscribed" meaning, Brokerage Concepts, 140 F.3d at 528, and that the r ecord

reveals no evidence that Parise violated S 4108 whe n the statute is properly construed. Accordingly, I respe ctfully

dissent.

I.

Pennsylvania is one of twenty states that criminali zes commercial bribery for influencing an agent's condu ct "in relation to the affairs" of the agent's principal.1

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1. States that presently criminalize commercial bri bery for influencing an agent's conduct "in relation to the affairs" of the agent's principal

include

23Pennsylvania's commercial bribery statute is repres entative

of these statutes. Its text reads:

(a) Corrupt employee, agent or fiduciary .-- An employee, agent or fiduciary commits a misde meanor of the second degree when, without the conse nt of his employer or principal, he solicits, accepts, or agrees to accept any benefit from another person upon agreement or understanding that such benefit will

influence his conduct in relation to the aff airs of his employer or principal.

....

(c) Solicitation.-- A person commits a m isd emeanor of the second degree if he confers, or offers o r agrees to confer, any benefit the acceptance of which would be criminal under [subsection (a)] of this sect ion.

18 Pa. C.S.A. S 4108. Courts interpreting the "in r elation to the affairs" language in the century since commerci al bribery statutes were first enacted have held unive rsally that the core of the offense is the breach of an ag ent's duty of loyalty. See, e.g., Note, Bribery in Commercial Relationships, 45 Harv. L. Rev. 1248, 1249 n.10 (19 32) ("The breach of fiduciary duty has been considered the foundation of the offense [of commercial bribery.]" ). Pennsylvania is no exception: in Commonwealth v. Be llis, 399 A.2d 397 (Pa. 1979), the Pennsylvania Supreme C ourt

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Alabama, see Ala. Code S 13A-11-120 (1975); Arizona , see Ariz. Rev. Stat. S 13-2605; Connecticut, see Conn. Gen. Stat. S 53a-160; Illinois, see 720 Ill. Comp. Stat. 5/29A-1; Louisiana, see La . Rev. Stat. Ann. S 14:73; Michigan, see Mich. Comp. Laws Ann. S 750. 125; Minnesota, see Minn. Stat. Ann. S 609.86; Mississippi, see Mis s. Code Ann. S 97-9-10 (1972); Nevada, see Nev. Rev. Stat. S 207 .295; New Hampshire, see N.H. Rev. Stat. Ann. S 638:7; New York, see N.Y . Penal Law S 180.00 (McKinney); North Dakota, see N.D. Cent. Code, S 12 .1-12-08; Oklahoma, see Okla. Stat. tit. 21, S 380; Pennsylva nia, see 18 Pa. Cons. Stat. Ann. S 4108; Rhode Island, see R.I. Gen. Laws S 11-7-4 (1956); South Carolina, see S.C. Code Ann. S 16-17-540 (Law . Co-op. 1976); South Dakota, see S.D. Codified Laws S 22-43-1; Tex as, see Tex. Penal Code S 32.43; Utah, see Utah Code Ann.S 76-6-508 (1 953); Wisconsin,

see Wis. Stat. Ann. S 134.05.

24stated that "the purpose of [Pennsylvania's commerc ial

bribery statute] is to require an agent, employe[e, ] or servant to possess an undivided duty of loyalty to his principal." Id. at 400 (internal quotations omitted ). This is consistent with the Pennsylvania legislature's Offi cial Comment associated with S 4108, which states that t he statute's purpose is to criminalize bribery in "rel ationships where a duty of fidelity is owed." This duty of loy alty is breached only when an employee acts contrary to the interest of his employer.

The precise scope of conduct criminalized by the "i n relation to the affairs" language in state commerci al bribery statutes identical to Pennsylvania's has been the s ubject of a substantial body of case law. These cases have established a consistent and certain meaning for th e text we must interpret.2 According to these cases, the d uty of loyalty protected by the statute is not violated un less the agent (here, Pegan or Rywelski) accepts a payment i n exchange for conduct that puts the interests of the payor (here, Parise and Sacks) above the contrary interes ts of the principal (here, NMU, the union). See, e.g., D.E. Y treberg, Annotation, Validity and Construction of Statutes P unishing Commercial Bribery, 1 A.L.R.3d 1350, 1361 (1965) (n oting that in the cases interpreting the "in relation to the affairs" language, actions that did "not affect the employer 's interest in any way" were not criminal); 11 C.J.S. Bribery S 3 (1995) (noting that commercial bribery statutes "require the offer of a bribe to an employee with the intent that he promote the interests of the person offering the br ibe over those of his employer").

Accordingly, it is not commercial bribery to induce an agent to accept payment for conduct that does not adversely affect the interests of the agent's princ ipal. See People v. Jacobs, 130 N.E.2d 636, 637 (N.Y. 1955)

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2. Although most of the cases have arisen outside o f Pennsylvania, the fact that they have established a certain meaning f or the text in question makes these cases a natural source of interpretive authority. See Simmler v. City of Philadelphia, 198 A. 1, 3 (Pa. 1 938) (looking to the interpretations of the same language in statutes by other state courts in order to interpret a vague Pennsylvania statute).

25(overturning conviction of photographer who paid bu rsar for

list of names of ocean liner passengers, because th ere was no evidence that release of the names of the passen gers was contrary to the interests of the ocean liner co mpany). Further, it is not commercial bribery to induce an agent to accept payment in an attempt to influence conduct o ver which the agent has no control. See State v. Nadeau , 105 A.2d 194 (R.I. 1954) (overturning commercial briber y conviction of councilman for planning to accept pay ment to attempt to influence selection of city police chief , because councilman had no control over selection process).

An illustrative example of these principles is Peop le v. Graf, 24 N.Y.S.2d 683 (App. Div. 1941). In Graf, a New York appellate court reversed the conviction of a union official who had accepted expense payments from management. Management had wanted to expand the territorial sco pe of its sign making business beyond New York, and sough t to have Graf travel to union headquarters outside of N ew York to encourage the union members outside of New York to allow the sign company to accept work there. When t he union refused to pay Graf's travel expenses, manage ment made a secret arrangement with Graf to do so. Graf was subsequently indicted and convicted of commercial b ribery. The basis of the charge was that Graf had accepted payments from management that had induced him to ac t
"in relation to the affairs" of his union.

On appeal, Graf argued that his conduct was not "in relation to the affairs" of the union. The Appellat e Division agreed, noting inter alia that Graf had done nothin g that could be construed as putting the interests of the sign company over those of his union. Even though Graf h ad secretly accepted payments to do union-related acti vity, "the action taken by [Graf] was favorable to the un ion." Id.

at 687. This was insufficient to constitute commerc ial bribery, the court held, because the statute "requi res proof of payment of money to influence an agent in a way inconsistent with his duties towards his employer." Id. (emphasis added).

As these cases indicate and our court recently recognized, the scope of Pennsylvania's commercial bribery statute is "carefully circumscribed." Brokerage Con cepts,

26140 F.3d at 528. Of course, this does not mean that it is

impossible for payments made in exchange for an age nt's referral to a third party to constitute commercial bribery. See, e.g., Hastings v. Fidelity Mortgage Decisions Corp., 984 F. Supp. 600, 606-07 (N.D.Ill. 1997) (Civil RICO) ( denying

motion to dismiss for failure to state a claim unde r Illinois commercial bribery statute for referral payment sch eme, but noting that plaintiffs had survived 12(b)(6) di smissal only "barely," and noting that "[i]f this set of fa cts were presented to us at the summary judgment stage, we w ould be inclined to grant judgment for the defendants"); cf. Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., No. 95-1698, 1995 WL 455969 (E.D.Pa. July 27, 1995) (Ci vil RICO) (denying motion to dismiss for failure to sta te a claim of corruption of a disinterested person under 18 Pa . St. Ann. S 4108(b) in a referral scheme involving healt h care company). However, it does mean that making payment s in exchange for agents' referrals constitutes commerci al bribery only when the agent has put the interests o f the payor above the contrary interests of the agent's p rincipal. See Jackson v. Radcliffe, 795 F. Supp. 197, 206 (S. D.Tex. 1992) (Civil RICO) (holding that hospital that refe rred clients to a radiologist in exchange for 30% of the radiologist's fees did not violate commercial bribe ry statute by breaching duty of loyalty to patients).

II.

An application of these legal principles to Parise' s payments to Pegan and Rywelski leads ineluctably to the conclusion that these payments did not constitute commercial bribery. The record simply fails to supp ort the view that Pegan and Rywelski acted in any way contr ary to the interests of the union when they referred injur ed union

members to Parise and Sacks. There is no evidence t hat Pegan and Rywelski put Parise's and Sack's interest s over the union's because the union was completely disint erested in which lawyer an injured seaman retained for a pe rsonal

lawsuit.

Under the statute, an employee may not take a bribe if it

will "influence his conduct in relation to the affa irs of his employer or principal." 18 Pa. C.S.A. S 4108(a) (em phasis

27added). Although an individual seaman obviously has an

interest in which lawyer represents him, an individ ual seaman is not the employer or principal of the port agents; the union as a collective whole is the port agent's employer or principal. Thus, whether or not a seaman knew th at the port agents were receiving referral fees, the port agents did not, under this Pennsylvania statute, owe an indivi dual seaman a duty of loyalty.

I begin with the union's position on its port agent s accepting referral payments. The record reveals tha t the entire union leadership knew of the cash payments, and even encouraged them. Referral payments were consid ered rewards for loyal port agents, whose official dutie s focused on the much more mundane tasks of accounting and producing weekly financial reports for higher union officials. App. 743. As the Government concedes in its brief, "the [union] historically allowed its officials (us ually port agents) to refer injured members to designated mari time lawyers in exchange for cash payoffs. Indeed, Paris e, Sr. admitted that as union president he sometimes field ed member requests for legal referrals, and that he ex pressly allowed port agents to refer members to personal in jury attorneys." Appellee's Br. at 8 (emphasis added and citations omitted). In other words, the payments we re part of the union's standard procedure, endorsed by the union president himself.

In light of the union's express allowance (if not encouragement) of referral payments, it is unclear how port agents could have been acting contrary to the union 's interests in receiving them. See Jacobs, 130 N.E.2d at 637 (holding that an employee could not be guilty of vi olating commercial bribery statute because employer knew of payment and declined to stop it; employer's allowan ce reflected fact that payment could not have been con trary to employer's interest).

Further, although the union had no interest in unio n members' selection of a personal injury lawyer, the testimony of Pegan and Rywelski reveal that they we re not acting contrary to the best interests of the union when they referred seamen to Parise Jr. and Sacks.3 John Peg an, the

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3. Pegan and Rywelski testified under immunity agre ements, as did

Sacks.

28port agent for Boston, first became acquainted with Sacks

when Pegan became unsatisfied with the lawyer he ha d hired three years earlier to represent him in a per sonal injury action. App. 663. Acting on the advice of Lo uis Parise, Sr., Pegan consulted with Sacks, who advise d Pegan that "it wouldn't be feasible" to switch lawyers at that time "because of all the investigation work" that Pegan' s lawyer had already performed. App. 665. Pegan believed tha t Sacks was a good lawyer: Pegan testified that he "h ad heard" that Sacks "got good results in the injury c ases." App. 667. Thus, when the union members in Boston we re "not satisfied with [Boston maritime lawyers] . . . [and] want[ed] somebody else," App. 667, Pegan would refe r the members to Parise, Jr. and Sacks.

Similarly, there is no evidence that Deborah Rywels ki, who acted as the port agent in Charleston, South Ca rolina, was acting contrary to the union's interest when sh e made attorney referrals. When a member would come to her and ask her for a lawyer, she testified, she would give the member Parise, Jr.'s card. Rywelski would then expl ain that Parise, Jr. was an investigator for Sacks, and that Parise, Jr.'s father was the head of the union. App . 530. She would tell the union member, "Call him up. If y ou like what they've got to say, fine. [I]f you don't, I kn ow some other attorneys I can send you to." Id. (emphasis a dded). As in State v. Nadeau, supra, the port agents had no c ontrol over which lawyer an individual seaman would eventu ally choose; they could not themselves commit the union members to Sacks's representation.

The union's express allowance of the payments, combined with the testimony of Rywelski and Pegan, reveals that there is no evidence that Pegan and Ry welski placed the interests of Sacks and Parise, Jr. ahead of the interest of the union in accepting payments from Pa rise, Jr. Pegan thought that Sacks was a good lawyer, and eve n sought Sacks's representation for himself. Rywelski was very careful to explain that Sacks was only one of several attorneys to whom she could refer the member, and directed the member to accept Sacks's representatio n only if the member "liked what [Parise, Jr. and Sacks ha d] to say." The union leadership not only knew of the ref erral

29payments, but encouraged and even directed them. Gi ven

these facts, there is simply no evidence that the u nion had an interest in which lawyer a member retained and n o evidence that Rywelski or Pegan acted against the i nterests of the union in referring injured union members to Parise, Jr. and Sacks. Accordingly, Parise, Jr.'s payments to Rywelski and Pegan for making the referrals could n ot constitute commercial bribery.

III.

The majority's understanding of S 4108 is dramatica lly different from the one I have presented. As I see i t, the majority's approach has five significant flaws.

1. Failure to follow the accepted interpretation of commercial bribery.

In the absence of definitive authority in Pennsylva nia,4

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4. The few cases in Pennsylvania that interpretS 41 08 do not address the issue at hand. United States v. Johns, 742 F. S upp. 196 (E.D. Pa. 1990), aff'd, 972 F.2d 1333 (3d Cir. 1991) (table), is inapplicable

because it involved the quintessential example of commercia l bribery. In Johns, an employee, responsible for purchasing supplies an d services for his employer, chose vendors for his employer in exchang e for kickbacks from the vendors. The employer certainly had an interest in which vendors provided the employer goods and services. In this c ase, the port agents gave seamen (who were not the port agents' employer s or principals) advice on who to choose as a personal injury lawyer . The port agents

themselves had no control over who the seamen would choose as a lawyer, and the port agents' employer, the union, h ad no control or interest over the seamen's choice of a lawyer.

Likewise, Pennsylvania v. Bellis, 484 Pa. 486, 399 A.2d 397 (1979), involved a city councilman's representation of thir d parties in their contractual dealings with the city and its agencies . The contracts at issue in Bellis were between the third party entiti es who paid the councilman a fee and the councilman's employer, the city. Thus, the councilman was taking money to help third parties g ain advantages with his employer. In this case, the port agents did not receive referral fees from Sacks so that Sacks could represent the port a gents' employer, the union, in its affairs. Rather, individual union mem bers chose Sacks to be their personal lawyers to assist them in pursuing t heir personal, not union, claims.

30the majority's refusal to acknowledge a century of law from

other jurisdictions interpreting the same or simila r commercial bribery statutes is perplexing. As I hav e previously pointed out, some twenty states have commercial bribery statutes that contain S 4108's e xact phrase. See note 1, supra. Most of the relevant cas es (especially Graf, Jacobs, Nadeau, and Radcliffe) ad vance an interpretation of the commercial bribery statute th at is very different from that offered in the majority's opini on, and that would lead to a contrary result. The majority opinion seeks to distinguish only Nadeau, see Maj. Op. at 16 n.10,

and declines to discuss the other statutes I have c ited and the other cases. Id. Hence, it neither reconciles t hose cases with its approach, nor explains why they were wrong ly decided, if in fact it believes they were.

2. Failure to identify any breach of loyalty owed t o the union as the employer of the port agents.

My second objection is the majority's focus on unio n members, who are not the port agents' employers, as distinct from the union itself, which is the port a gents' employer. It should be remembered that the commerci al bribery statute requires and Bellis emphasizes that an agent must possess an undivided loyalty to his prin cipal, that is, his employer. The record reveals that none of the actions taken by the port agents in any way affecte d adversely or were disloyal to the union. Indeed, on e would be hard pressed to argue that the port agent's refe rral activities were adverse to the union members, but o f course, that is irrelevant. As I have stated repeat edly, the port agent must have been disloyal to the union to meet the statutory standard and be held criminally liable.

One can search far and wide in the majority opinion and in the record but still cannot ascertain disloyalty or adverse actions taken by Pegan and Rywelski with respect to the affairs of the union. Hence, the holding of Bellis, as distinct from the standard applied in Bellis, is inapposite to Parise's appeal. Bellis, which is cited by the majority at 1 4-15, is a classic example of conflict of interest, falling wi thin the purview of S 4108's reach. In Bellis, a city counci lman accepted payment from third parties to negotiate on their behalf with the councilman's employer or principal. This

31action adversely affected the City of Philadelphia' s interest

and affairs. It would have been impossible for Bell is to negotiate on behalf of his third party clients and against the City of Philadelphia without breaching his duty of loyalty to the City.

But Parise is not Bellis because Parise's payments to Pegan and Rywelski did not involve the union, and i t is the union which is the employer of the two port agents. An example furnished to me by one of my colleagues hig hlights this distinction. He posited:

Suppose an individual visits a hospital to r eceive an inoculation required for foreign travel. Aft er receiving his shot, the patient asks the doctor if she knows where the patient could get his vision check ed before departing. If the doctor refers the patient to an optometrist from whom she had received payme nts in exchange for referrals, is the doctor guilty of commercial bribery (and, by extension, a RIC O violation)? Even assuming that making referr als is part of the hospital's affairs, the doctor has no t committed commercial bribery because she has not acted contrary to the interest of her employer, the hospita l.

Even if the referral is contrary to the patient's i nterest (as a referral to an allegedly poor attorney may be con trary to a union member's interest), the overarching princip le upon which Bellis is predicated requires an agent's "und ivided loyalty to his employer." Thus, extending the bribe ry statute to cover payments for "employment-related activity" leaves

it without limit and far exceeds the text of the st atute and the import of Bellis.

3. Invading the function of the legislature.

My third objection is that the majority's interpret ive approach seems to me inconsistent with a proper jud icial role. As the Supreme Court stated in United States v. Bass, 404 U.S. 336, 92 S. Ct. 515 (1971), "legislatures a nd not courts should define criminal activity." Id. at 348 , 92 S. Ct. at 523. Courts must be careful not to expand the re ach of criminal statutes by judicial fiat because citizens should not be sent to "languish[ ] in prison unless the [l egislature] has said they should." Id. (quoting Henry Friendly, Mr.

32Justice Frankfurter and the Reading of Statutes, in

Benchmarks, 196, 207 (1967)); see also Yates v. Uni ted States, 354 U.S. 298, 310, 77 S. Ct. 1064, 1072 (19 57) (Harlan, J.) (absent legislative guidance, criminal statutes are to be strictly construed).

The majority recognizes these principles, see Maj. Op. at 12-13, but has not honored them. It has chosen simp ly to reject the long-established meaning of the "in rela tion to the affairs" language, and has substituted its own, muc h broader interpretation. As the majority acknowledge s, a few months ago our Chief Judge stated in a civil RICO c ase that commercial bribery in Pennsylvania is "a carefully circumscribed crime," Brokerage Concepts, 140 F.3d. at 528 (Becker, C.J.), and refused to expand the reach ofS 4108 to

include conduct that would not otherwise be crimina l under the statute. The majority turns the Brokerage Concepts holding on its head--the case stands for t he proposition that the reach of the criminal bribery statute should not be expanded, yet the majority cites the case for the proposition that the criminal bribery statute s hould not be limited in accordance with established principle s of criminal statutory interpretation. The Brokerage Co ncepts case requires that the courts not expand S 4108 bey ond its current parameters; I submit that a broadening of t he scope of conduct criminalized by S 4108 is best lef t to the Pennsylvania legislature.

4. Majority's misapplication of its broad reading o f

S 4108 to this case.

My fourth objection relates to the majority's appli cation of its newly fashioned standard to the facts of this c ase. The majority reasons that port agents regularly referre d injured union members to lawyers, such that paying port age nts for

those referrals influenced their work-related condu ct. Maj. Op. at 19-21. However, the record is clear that the port agents almost always received payments in exchange for their attorney referrals. According to Sacks' testi mony, payments were the standard practice in the union: t he question was not whether the port agents would be p aid for their referrals, but who would pay. App. 160-66. Ev en the Government's brief concedes this, stating that the union "historically allowed its officials (usually port a gents) to

33refer injured members to designated maritime lawyer s in

exchange for cash payoffs." Appellee's Br. at 8.

Absent evidence that port agents regularly referred injured union members to lawyers when they were not being paid off to do so, and more importantly, abse nt any record evidence of adverse effects on the union, 5 I do not understand how the majority can conclude that makin g attorney referrals was part of the union's affairs. Surely, if it was part of the union "affairs" to refer seamen to lawyers, then there would be substantial evidence of port ag ents referring union members to lawyers when no payments were involved. The record only supports the view th at port agents regularly engaged in activities of no concer n to their employer and beyond the scope of their employment ( which was focused on accounting and financial reporting). They simply took advantage of their acquaintances with t he injured seamen and enhanced their income by making attorney referrals.

5. Overextended reading of the port agents' scope o f employment.

My fifth and final objection has to do with the act ual and not the hypothetical functions of the port agent. T he record discloses that their established duties embraced pr imarily accounting and financial reporting. App. 743.6 Any referrals

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5. The majority refers to Mr. Gerasimos as having p rovided legal referrals without receiving any payments. Maj. Op. at 19. Ger asimos, however, characterized this function as an unofficial duty, not an official duty,

of a port agent. App. 737. The other reference by the majority to a vicepresident who did not take money for attorney refer rals obviously was
not a port agent.

6. The union's constitution and by-laws specificall y describe the duties

of a port agent. Kenneth Gerasimos, a union vice-presi dent and former port agent of NMU, agreed that the constitution and by-l aws accurately reflected the duties of a port agent, which provide s:

Branch [port] agent shall be responsible for implementing the

directives of the division chairman and coun cil in the port or
ports of their jurisdiction. They shall be prepare d to account financially or otherwise for the activities of their port o r ports whenever

demanded by the division chairman. In any event, they shall prepare andforward to the district treasurer a weekly f inancial report showing

in

34made, whether to doctors, lawyers, therapists, acco untants,

barbers, or the like, were undertakings beyond the scope of their employment. The fact that they were paid for these activities could be of no moment to the union, thei r employer, and indeed could not be deemed evidence o f disloyalty to the union. On the other hand, had the port agents falsified their financial reporting and acco unting or disclosed to a third party confidential union infor mation in return for a payment by a third party, that falsifi cation or disclosure would have been evidence of disloyalty t o the union and would have constituted commercial bribery because it affected the affairs of the union, their employer.

The port agents could not have been fired or sancti oned, and indeed they were not, for taking monies for ref errals, but common sense dictates that had they affected th eir employer's interest by falsifying or in any way not truthfully performing their accounting and financial reporting functions in exchange for third party monies, their jobs would be at risk, to say nothing of criminal liabil ity being visited upon them.

IV.

Given Louis Parise, Jr.'s intimate involvement in h is father's schemes over a period of years, he may hav e violated several criminal statutes. However, the Un ited States prosecuted Parise, Jr. on a RICO charge base d only on a tenuous reading of a rarely used state crimina l statute. In the course of affirming Parise, Jr.'s c onviction, the majority has extended the statute just enough t o include his conduct within its grasp. A fair and co nsistent interpretation of the statute, however, reveals tha t Parise,

Jr. has been convicted and sentenced to serve thirt y

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detail weekly income and expenses and comply ing with all other accounting directions issued by the district treasurer.

The majority relies upon the preamble of the NMU co nstitution, rather than this provision specific to port agents, to def ine the scope of the
port agents' employment. The preamble describes the unio n's purpose with respect to its members, while the provision above c ited describes the port agents' duties with respect to the union.

35months in prison for conduct that did not constitut e the

crime of commercial bribery.

Accordingly, I respectfully dissent.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

36