1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-28-1998

United States v. Parise

Precedential or Non-Precedential:

Docket 97-1740

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Recommended Citation

"United States v. Parise" (1998). 1998 Decisions. Paper 254.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/254
Filed 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 father, 

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 have 

delivered cash bribes to two "port agents" in exchange for 

their referral of union members with personal injury cases 

to Parise Jr.'s employer, the Sacks law firm. 

On appeal Parise Jr. argues that there was insufficient 

evidence to support his RICO conviction. He also contends 

that his actions did not constitute commercial bribery 

under Pennsylvania law. We disagree with his view as to 

how the law should be applied to the facts of this case, and 

find that the evidence was sufficient to support his 

conviction. Parise Jr. also challenges the district court's 

exclusion of certain testimony relating to the commercial 

bribery charge. We find this argument to be similarly 

unavailing. We will thus affirm the order of the district 

court. 

I. 

The convictions at issue in this case arose out of an 

extensive government investigation of corruption within the 

NMU and several related organizations. The NMU 

represents merchant marine seafarers who work on 

commercial shipping vessels. One of the improprieties 

revealed through the government's investigation was a 

 2 
bribery scheme devised and implemented by Louis Parise 

Sr., the President of the NMU, his son, Louis Parise Jr., and 

attorneys Avrem Adler and Bernard Sacks.1 Through this 

plan, developed in 1988, port agents and other union 

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" for the 

Sacks law firm and was responsible for delivering the bribes 

to the port agents. Parise Sr. promised these legal referrals 

to Sacks in exchange for a kickback of 5% of the legal fees 

generated through NMU cases. In 1992, a Legal Services 

Plan ("LSP") was created through which attorneys were to 

provide low or no cost legal services to union members. It 

was hoped that these members would then be more likely 

to retain designated attorneys, including Sacks, for 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 bribery 

scheme. Sacks explained that Parise Jr.'s role was to pay 

port agents in particular cities a set fee for referral of 

personal injury cases to the Sacks firm. Several port 

agents, including Floyd Jones, John Pegan, and Debra 

Rywelski,3 testified about the money paid to them by Parise 

Jr. for these case referrals. Other witnesses provided 

additional evidence relating to Parise Jr.'s role in the NMU 

and in carrying out the bribery scheme. After a three week 

trial, the jury found Parise Jr. guilty of the RICO violation, 

of Travel Act violations and of RICO forfeiture. The RICO 

conviction was based on the jury's finding that Parise Jr. 

had bribed Pegan and Rywelski in violation of 

Pennsylvania's commercial bribery statute. The district 

court denied Parise Jr.'s post-trial motion for acquittal or a 

new trial, and Parise Jr. appeals the judgment of conviction 

_________________________________________________________________ 

1. Adler died before this case was brought to trial. 

2. Between 1988-93 Sacks earned over $1.4 million in legal fees from 

these NMU personal injury cases. 

3. Rywelski was a NMU employee, but was not officially a "port agent." 

She served as a Pension and Welfare Plan Representative who helped 

union members with their benefits. 

 3 
entered on September 11, 1997. This court has jurisdiction 

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 favorable to 

the Government, to support it." Glasser v. United States, 

315 U.S. 60, 80 (1942). See United States v. Aguilar, 843 

F.2d 155, 157 (3d Cir. 1988). To the extent that Parise 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 sufficiency 

of the evidence which sustained his conviction under RICO. 

First, Parise Jr. argues that the government failed to 

adequately connect him with the indicted "enterprise" 

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 occurred 

after the formation of the LSP were not directly linked with 

his role in the LSP. Secondly, Parise Jr. contends that the 

government failed to demonstrate that he participated in 

directing the affairs of the enterprise as required to sustain 

a RICO conviction. In addition, Parise Jr. challenges the 

district court's jury instruction relating to the requisite 

showing that must be made to establish "association" 

under RICO. 

1. Connection with an "enterprise" 

The RICO statute provides that "it shall be unlawful for 

any person employed by or associated with any enterprise 

engaged in . . . interstate or foreign commerce, to conduct 

or participate, directly or indirectly, in the conduct of such 

enterprise's affairs through a pattern of racketeering 

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 employed 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) that he or she 

 participated through a pattern of racketeering activity. 

United States v. Console, 13 F.3d 641, 652-53 (3d Cir. 

1993) (citation omitted). 

The statute defines an enterprise as "any individual, 

partnership, corporation, association, or other legal 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 entities 

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 alleged 

in the indictment that the enterprise -- which we will call 

the "NMU Enterprise" -- was comprised of four 

organizations, no "enterprise" could have existed prior to 

September 1992, when the fourth organization, the LSP, 

was created. Therefore, Parise Jr. asserts, alleged illegal 

activity which took place before September 1992 cannot 

properly serve as the basis for his RICO liability. 4 

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

_________________________________________________________________ 

4. The indictment characterized Parise Jr.'s role as 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 enterprise . . . knowingly, 

 unlawfully, and willfully conducted and participated, directly and 

 indirectly, in the conduct of the affairs of the enterprise . . . . 

 Defendant Louis Parise, Jr., used his position as an investigator 

for 

 attorney Sacks and as a co-administrator of the ITPE-NMU Legal 

 Benefits Plan, to promote and aid and abet commercial 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 Sacks as their lawyer 

 . . . . 

 5 
"enterprise" as defined by the RICO statute. The four 

organizations were included in the indictment because all 

were channels through which illegal activity was taking 

place and through which the NMU Enterprise operated. 

This does not mean, however, that no illegal activity of the 

enterprise could occur prior to the existence or entry of one 

of the indicted entities. In order to establish the existence 

of an "enterprise" for the purposes of RICO, the government 

must demonstrate that there is "an ongoing organization" 

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. 576, 583 

(1981)). However, "continuity does not require that each 

member of the enterprise participate in it from beginning to 

end." United States v. Feldman, 853 F.2d 648, 659 (9th Cir. 

1988); see United States v. Hewes, 729 F.2d 1302, 1310-11 

(11th Cir. 1984) (rejecting the argument that government 

must prove participation of all members throughout the life 

of the enterprise). Rather, the government must 

demonstrate that all alleged members who participated at 

one time or another were part of an ongoing enterprise with 

a shared "organizational pattern" and "system of authority." 

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 ongoing 

enterprise which satisfied the organizational and structural 

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 activity 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 Parise Sr. 

was the "system of authority" which united all of the 

organizations which formed the NMU Enterprise: the elder 

Parise had relatively unfettered discretion to direct both the 

legal and illegal activities of the union and its related 

organizations. Because the NMU Enterprise existed before 

the formation of the LSP, Parise Jr.'s actions prior to 1992 

could properly form the basis for his RICO conviction. 

 6 
Parise Jr. next asserts that all of the racketeering 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-administrator of the 

LSP. Parise Jr. contends that his actions taken while he 

was an investigator for the Sacks law firm cannot form 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 the 

government's burden. At trial, the government needed 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 doing, 

however, the government was not limited to demonstrating 

that Parise Jr.'s participation in the affairs of the enterprise 

flowed from his official role within the LSP. In fact, from the 

evidence adduced at trial it is clear that Parise Jr.'s 

eventual position with the LSP was not necessary to

establish that he associated with or participated in the 

affairs of the NMU Enterprise. Rather, as is discussed 

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 activities. 

Parise Jr. also appears to be arguing that he could only 

have been found to have "associated with" the organization 

in which he held a formal position, but the language of the 

RICO statute leaves no room for this contention. The law 

explicitly states that a RICO defendant must be employed 

by or associated with an enterprise. 18 U.S.C. S 1962(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 nature 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 showing of 

"association" was easily met. The evidence showed that 

Parise Jr. attended the initial meeting during which the 

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

to demonstrate that he was aware of the NMU Enterprise 

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 the 

 enterprise 

We now turn our attention to the third element essential 

to a RICO conviction -- namely, whether the government's 

evidence demonstrated that Parise Jr. participated in the 

conduct of the affairs of the enterprise. Our analysis of this 

claim must begin with an examination of the definition 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 management" 

test to determine whether a defendant participated in the 

conduct of an enterprise's affairs. Id. at 184. According to 

Reves, "[i]n order to `participate, directly or indirectly, in the 

conduct of such enterprise's affairs,' one must have some 

part in directing those affairs." Id. at 179. However, one 

need not hold a formal position within an enterprise 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`operated' 

not just by upper management but also by lower-rung

participants in the enterprise who are under the direction 

of upper management." Id. at 184. In so holding, the 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 aims of 

the enterprise by carrying out the directives of those in 

control. 

In applying Reves, we have stated that the"operation or 

management" test is designed to limit RICO liability under 

S 1962(c) to those situations in which the government can 

demonstrate "a nexus between the person and the conduct 

in the affairs of an enterprise." University of Maryland at 

Baltimore v. Peat, Marwick, Main & Co., 996 F.2d 1534, 

1539 (3d Cir. 1993).5 The First Circuit has stated that RICO 

_________________________________________________________________ 

5. Although Reves was a civil RICO case, the "operation 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). 

 8 
liability extends to those "plainly integral to carrying out" 

the enterprise's activities. See United States v. Shifman, 124 

F.3d 31, 36 (1st Cir. 1997) (citation omitted), cert. denied, 

118 S. Ct. 1053 (1998). 

It is clear that Parise Jr. participated in the conduct 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 personal 

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, even 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 Parise 

Jr. was acting at the direction of his father, the union 

President -- clearly upper level management -- to carry out 

the illegal activities of the NMU Enterprise. As a result of 

Parise Jr.'s work, his father, the head of the enterprise, 

received substantial kickbacks from Sacks. 

In 1992, in furtherance of the scheme and reflective of 

his important role in the enterprise, Parise Jr. became coadministrator of the LSP. Through this official position, he 

maintained and expanded his role in operating the NMU 

Enterprise. In addition to continuing the payoff 

arrangement with port agents, he also coordinated the 

effort of the LSP to select local attorneys to do the 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 "outside" an 

enterprise who may assist in furthering the illegal activities 

of the enterprise. 507 U.S. at 183-85. The Court did not 

reach the issue of the liability of those "inside," specifically 

declining to determine "how far S 1962(c) extends down the 

ladder of operation." Id. at 184 n.9. However, we need not 

dwell on this issue because Parise Jr.'s substantial 

involvement in the criminal activities of the NMU Enterprise 

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 larger 

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

Cir. 1994) (reversing conviction of defendant who did light 

clean-up and maintenance work on the ground that the 

government had failed to show that he exercised any

"discretionary authority" or that he "was even aware of the 

broader enterprise"). Sacks testified that Parise Jr. was 

present during the original meeting where the bribery plan 

was discussed. The fact that he continued to play an 

essential role in implementing the scheme was well 

documented during the trial. Parise Jr. does not contend on 

appeal that he was an unwitting -- or unwilling-- actor. 

From the extensive evidence presented at trial, the jury 

could easily conclude that the government established a 

nexus between Parise Jr. and the affairs of the NMU

Enterprise. Parise Jr. played a role in directing the affairs 

of the NMU Enterprise as required by Reves and could 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 district court 

advised the jury that "the Government has alleged that 

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 there 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 or 

contacts between the union officials and Parise Jr. during 

which they had the opportunity to learn about his role in 

the NMU Enterprise. There is no basis either in the context 

of the instruction or the evidence of the case to equate the 

_________________________________________________________________ 

6. This instruction will be reviewed to determine if, taken as a whole and 

in the light of the evidence, it fairly and adequately 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 district court correctly 

communicated the substance of the law to the jury so that the jury was 

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

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

testimony of NMU employees such as Pegan and Rywelski 

was not limited to their discussion of payoffs for legal 

referrals, but also included testimony in which they 

described Parise Jr.'s overall involvement with the NMU 

Enterprise. Furthermore this jury instruction referred to 

"various NMU officials" who testified, including James 

Overstreet, a business agent for the NMU, and Kenneth 

Gerasimos, a former Vice President of the union. Both of 

these officials testified that Parise Jr. was present at union 

meetings and events. The entire testimony of the officials as 

to "dealings" with NMU officials formed the evidentiary 

basis for a jury determination that Parise Jr. was 

"associated with" the enterprise. 

Finally, it is important that the challenged portion of the 

charge be read in the context of the entire set of 

instructions. The district court did instruct the jury 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 defendant 

 was able to commit the racketeering offense solely by 

 virtue of his position in the enterprise or his 

 involvement in or participation in or control over the 

 affairs of the enterprise. The Government must also 

 establish beyond a reasonable doubt that the alleged 

 racketeering acts were committed in the conduct of the 

 affairs of the enterprise. 

The court's instructions made clear that conduct relating to 

the NMU Enterprise must form the basis for RICO liability. 

Therefore, we find that the district court's instructions 

correctly conveyed the substance of the law and fairly 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 

_________________________________________________________________ 

7. "Racketeering activity" is defined, in pertinent part, as "any act or 

threat involving murder, kidnaping, gambling, arson, robbery, bribery, 

 11 
established by proving that the defendant committed two or 

more illegal acts of the type associated with organized 

crime. See Riccobene, 709 F.2d at 226-27. The indictment 

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 elicited at 

trial established that port agents were favoring Sacks in 

exchange for payoffs from Parise Jr. The jury found that 

Parise Jr. had bribed two union employees, Pegan and 

Rywelski. Pennsylvania's statute defines commercial bribery 

as follows: 

 An employee, agent or fiduciary commits a 

 misdemeanor of the second degree when, without the 

 consent 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 

 affairs of his employer or principal. 

18 Pa. C.S.A. S 4108(a). Under the following provision, the 

statute also criminalizes solicitation of bribes:"[a] person 

commits a misdemeanor of the second degree if he confers, 

or offers or agrees to confer, any benefit the acceptance of 

which would be criminal under subsections (a) or (b) or this 

section." 18 Pa. C.S.A. S 4108(c). Thus, by conferring 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 agent 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 contending that 

because referring seamen to lawyers is not included among 

a port agent's official duties, it cannot constitute "conduct 

in relation to the affairs of" the employer. He asserts that 

the union -- the employer in this case -- has no interest or 

stake in which lawyer an injured worker chooses, and that 

_________________________________________________________________ 

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). 

 12 
providing legal referrals is not within the scope of the port 

agents' employment. The government argues that Parise 

Jr.'s reading of the statute, especially in light of the facts of 

this case, is too constricted. It urges that the "affairs in 

relation to" language of the statute encompasses 

employment-related activity beyond that which is part of an 

employee's official duties. 

As the present case arises under this court's federal 

question jurisdiction, we will address all of the issues 

necessary to our ruling, including questions involving 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 Constitution 

requires that criminal laws be strictly construed. Due 

process mandates that criminal statutes give "fair warning 

. . . to the world in language that the common world will 

understand, of what the law intends to do if a certain 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, the 

Pennsylvania courts have also held that "strict construction 

does not require that the words of a criminal statute be 

given their narrowest meaning or that the legislature's 

evident intent be disregarded." Commonwealth v. Gordon, 

515 A.2d 558, 561 (Pa. 1986). Furthermore, we must also 

refrain from reading additional provisions into a statute 

when its meaning is clear. See In re J.S., 586 A.2d 909, 913 

(Pa. 1991). Against this backdrop, we turn our attention 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 employer, 

the union. 

a. Requirements for Commercial Bribery under the 

 Pennsylvania Statute 

At the outset, it must be noted that the language of the 

Pennsylvania commercial bribery statute makes its reach 

quite broad. It requires that an employee solicit or accept a 

benefit from another in order to influence the employee's 

conduct in relation to his employer's affairs. The statute 

 13 
contains no requirement that the affected conduct be in 

relation to the official duties of an agent or employee, nor 

does it require a showing that an offender's conduct was 

adverse to the interests of the employer. In construing 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), for 

direction. 

In Bellis -- the only Pennsylvania Supreme Court case 

which discusses this issue directly -- the court affirmed the 

judgment of sentence of a city councilman convicted of 

commercial bribery.8 Bellis, 399 A.2d at 400. Councilman 

Bellis had represented private parties before city agencies 

in order to help these companies secure contracts with 

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 official duties 

as a councilman. His conduct involved contracts between 

third parties and other city agencies and departments, 

quite apart from any matter before city council or otherwise 

affecting his role or responsibilities as a councilman. The 

Bellis court found that it was uncontested that the

defendant's acceptance of these bribes "did not affect the 

performance of his official duties as a city councilman" 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 employee's 

"official duties" was "irrelevant" to the commercial bribery 

inquiry. Id. at 400. Thus, the Pennsylvania Supreme Court 

has rejected the argument that the bribe must impact one's 

official duties in order to comprise "conduct in relation to 

the affairs of his employer or principal." 

The Bellis court recognized that commercial bribery was 

criminalized on the theoretical premise that such acts 

represent a violation of the duty of loyalty that an employee 

owes to an employer. The court stated that 

_________________________________________________________________ 

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 receives money 

 from third parties in return for acting on their behalf 

 (i.e., "showing . . . favor or disfavor") in his principal's 

 affairs. By representing private parties before city 

 officials while he was a councilman, appellant showed 

 "favor or disfavor" in the affairs of his principal (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 violated 

 Section 4667. 

Bellis, 399 A.2d at 400. Thus, the court determined that a 

violation of the employee's duty automatically occurs 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. The court 

viewed the violation as being implicit in the conduct. The 

act of accepting a benefit to show favor is the gravamen of 

the crime. 

The above-quoted language in Bellis makes it disloyal, 

and criminal, for an employee to accept money to show 

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 money in 

one's job is criminal only if found to be against the interests 

of the employer. Neither the Pennsylvania legislature, nor 

its courts, have inserted such a requirement into the 

offense of commercial bribery. The Bellis court did not 

examine the contracts in question to determine whether 

they were good for the City. Nor do we believe that such an 

inquiry is appropriate under the plain meaning of the 

statute. The Bellis court made clear that the showing of 

favor or disfavor on the basis of money paid is the harm 

addressed by the commercial bribery statute. The court 

need not make a determination as to whether the choice of 

a particular vendor influenced by a monetary payment was 

detrimental to the employer. In U.S. v. Johns, 742 F. Supp. 

196, 220 (E.D. Pa. 1990), the court found the defendant 

guilty of commercial bribery under S 4108 even though the 

 15 
parties had stipulated that the price and quality of the 

products obtained from the favored vendor were "more 

favorable" than any offered by competitors. While it is true 

that other states have included this requirement as a 

statutory element or interpreted it to be a requirement, 

those cases are not our guide.9 Courts should not legislate 

by reading into the laws provisions not included by the 

legislature.10 This principle was recently reiterated by this 

_________________________________________________________________ 

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 13-2605. Pennsylvania's 

statute contains no such limiting language. It is true that "[i]t appears 

that in New York, actions which might otherwise contravene Penal S 439 

[commercial bribery statute] are not criminal if they do not affect the 

employer's interest in any way." D.E. Ytreberg, Annotation, Validity and 

Construction of Statutes Punishing Commercial Bribery, 1 A.L.R.3d 1350, 

1361 (1965) (citing People v. Jacobs, 130 N.E.2d 636, 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 excerpt 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. Radcliffe, 795 F. Supp. 197, 

206 (S.D. Tex. 1992) in support of the proposition that payments in 

exchange for referrals will only constitute commercial bribery where an 

employee has put the interests of the payor above the 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 required 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 induce an agent to accept 

a payment in an attempt to influence conduct over which the agent had 

no control. We note first that Nadeau had been convicted under Rhode 

Island's statute prohibiting bribery of a public official, not under that 

state's commercial bribery statute. Nadeau is thus inapposite because its 

language regarding "official acts" seems clearly limited to the context in 

which that appeal was brought, namely, a government official accused of 

taking bribes in connection with his duties as an official. Further, to 

the 

extent that the holding of Nadeau can be applied to commercial bribery, 

we do not find it to be consistent with Pennsylvania precedent. The court 

in Bellis did not concern itself with whether Councilman Bellis could 

actually control or influence the contracting practices of the various 

city 

agencies involved. Again, the imposition of elements not present in the 

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

140 F.3d 494, 527-28 (3d Cir. 1998). There, interpreting a 

different section of Pennsylvania's commercial bribery 

statute, we rejected an attempt by one of the parties to 

insert an additional element -- that of the defendant's 

motivation -- into the statute. Id. We noted that the 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 the law.11 

In order to find the payment of money influenced the 

employee's conduct in relation to the employer's affairs, we 

must define the scope of the union's affairs. In so doing, we 

will consider not only the mission and activities of the 

union but whether the conduct in question was consistent 

with the scope of the union agents' employment. Thus, in 

this case, we must determine if the port agents were 

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 contend that 

whatever it means, the referral to counsel was not part of 

the affairs of the union. We believe the evidence supports 

the opposite conclusion. 

b. The Union's Affairs 

The purpose of the NMU, as set forth in its constitution, 

is described as helping "needy, sick and distressed" 

_________________________________________________________________ 

11. Having determined that the government was not obligated to prove as 

a separate element of the commercial bribery offense that the agent was 

acting against the interest of the employer, we need 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 in this case condoned 

the corrupt activity. However, we question the assumption inherent in 

that argument that the corrupt management of the union should be 

equated with the union entity itself for the purposes of determining what 

was "contrary to its interest." Simply because Parise Sr. and some other 

corrupt union leaders knew that some port agents were 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. 

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

in the following terms: 

 [T]he NMU has a very proud history. And I think we're 

 important to our members. Certainly we represent 

 them before the companies. We are responsible for 

 their collective bargaining agreement overall, but we 

 also represent them on a day to day basis. If 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 description of 

the union as concerned with the work-related welfare of 

union members. We can easily take judicial notice of the 

fact that the union movement exists of, by, and for workers 

and dedicates itself to their welfare and the recognition of 

their rights. Seeking redress for work-related injury through 

proper legal representation easily fits within this sphere of 

the union's interest and affairs. In addition to the fact that 

making attorney referrals was consistent with the purposes 

of the union, there was significant evidence presented from 

which the jury could have determined that the union

concerned itself with its members' legal representation and 

that making attorney referrals was part of the union's 

affairs. 

The testimony demonstrated that the job of port agent 

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 explained that 

in addition to taking care of finances he enforced ship 

rules, took care of grievances and supervised the operation 

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 members." 

J.A. at 637. While in some types of work, helping others 

mights be viewed as incidental to a job function, we view 

the union - port agent - member relationship depicted here 

to provide a unique setting in which assistance of this 

nature was integral to, not incidental to, the union's 

business of caring for its members. In describing her 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 educated and 

 18 
they 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 this role, 

making attorney referrals was a service routinely provided 

to the seamen coming into port by port agents and other 

union employees. Union members testified that they relied 

on port agents for attorney referrals after suffering an onthe-job injury. J.A. at 507; 1201. It was well-known among 

union members that port agents provided such referrals. 

Significantly, there was no evidence presented that union 

members, officials, or employees believed that making 

attorney referrals was inappropriate or beyond the scope of 

the port agents' employment or the union's sphere of 

interest. The evidence is clear that these employees 

provided attorney referrals to injured members and that 

this practice was consistent with the mission of the NMU. 

This practice furthered the union's express goal of assisting 

sick or needy members. 

Further, not all union employees received payoffs for 

making these referrals. Gerasimos, a union official, testified 

that assisting members with legal representation was"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 attorney 

referrals was conduct "in relation to the affairs" of the 

union, we cannot ignore the NMU's involvement in the 

business of legal services and referrals. Parise Sr. circulated 

a letter in which he named individual lawyers as the official 

_________________________________________________________________ 

12. This Vice President testified that while she knew port agents made 

referrals to personal injury lawyers, she was unaware that some received 

payments or fees in exchange for making these referrals. J.A. at 1310. 

This contradicts the dissent's view that "the entire 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 Coast and 

was given office space in the union hall in New Orleans. In 

addition, members of the NMU Enterprise, including Parise 

Sr. and Jr., established the Legal Services Plan for the 

purpose of providing routine legal services to union 

members -- hoping that participating attorneys would 

eventually be retained for lucrative personal injury 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 bring the 

agents' conduct within the ambit of their jobs for the union 

and that the referrals of seamen to counsel was part and 

parcel of the affairs of the union. Union employees were 

able to be bribed by virtue of their employment with the 

union; that is, they held positions in which they were 

expected to counsel and advise union members. The 

injuries for which members required legal representation 

were sustained on-the-job. That attorney referrals were 

given for employment-related injuries further strengthens 

the relationship between the role of the union and these 

services. This practice is easily within the explicit mission 

of the NMU. Having examined the language of the statute 

and the facts of this case, we conclude that providing 

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 

_________________________________________________________________ 

13. We recognize that the involvement of the NMU in the "legal affairs" of 

the union members was undertaken by Parise Sr. -- at least in part -- 

for his own financial gain. Thus, Parise Sr.'s efforts 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 must be viewed in the 

context of the evidence that providing attorney referrals 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 considered to be a legitimate 

activity of the union which furthered its mission of helping needy 

members. 

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

particular way in relation to the employer's affairs is also 

shown by the evidence. The payments in this case clearly 

influenced the conduct of the port agents. These agents 

testified that their referrals were not based on a 

determination that Sacks was the best lawyer to represent 

injured union members. J.A. at 599; 640. Rywelski stated 

that she knew nothing about Sacks's skills as a lawyer or 

the fees he charged. J.A. at 528. In fact, when asked 

whether he was chosen to be the "NMU attorney" because 

he was a good lawyer, Sacks himself replied, "No, I got 

picked because I could pay off the agents. I had the money 

to do it." J.A. at 255. Both Pegan and Rywelski testified 

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 misguided 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 conflict of 

interest depicted in Bellis. It is our ruling, however, that the 

evidence at trial provided ample support for the jury's 

finding that, given the unique relationship among the union, 

its members, and the port agents, the commercial 

Pennsylvania bribery statute had been violated. 

The evidence and the case law support the conclusion 

that the union employees' conduct in these matters 

constituted the acceptance of money to affect conduct in 

relation to the affairs of the employer. Given the union's 

mission, the nature of the port agents' work, and the 

subject matter and nature of the referrals, the jury could 

reasonably find, as it did, that the agents' conduct violated 

Pennsylvania's commercial bribery statute and that Parise 

Jr., as solicitor, was guilty of this underlying offense for the 

purposes of the RICO conviction. 

_________________________________________________________________ 

14. In order for this analogy to be apposite, the hospital would have to 

be made up of, and exist solely by reason of, the patients as its 

members, and the doctor's sole responsibility, as charged by the 

hospital, would be to further the hospital's mission and assist the 

members/patients and provide for their needs. This is not the case. 

 21 
C. Exclusion of evidence 

Finally, Parise Jr. contends that the district court 

improperly excluded relevant testimony of a government 

witness on cross examination as to the non-criminal intent 

of the recipient of the alleged commercial bribe. The 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 between 

both parties that the benefit offered will influence conduct 

in relation to the affairs of the employer. 18 Pa. C.S. 

S 4108(c). Parise Jr. argues that the district court erred in 

excluding testimony which related to whether Rywelski 

thought she was "doing something wrong" or"committing a 

crime" when she took money from Parise Jr. The district 

court excluded the evidence because her state of mind 

regarding the criminal nature of the conduct was irrelevant. 

We agree. Parise Jr. confuses the need to show that there 

was an "agreement or understanding" with evidence of 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 relevant 

testimony from both Pegan and Rywelski that they 

understood that the payments they received from Parise Jr. 

were for referrals to lawyers. Thus, the district court did not 

exclude evidence which related to Rywelski's belief about 

whether an agreement or understanding had been formed. 

It excluded only that which was irrelevant -- evidence as to 

whether Rywelski had a criminal state of mind. Therefore, 

the district court's exclusion of that portion of Rywelski's 

testimony was not an abuse of discretion. 

III. 

Having considered all of the issues raised by Parise Jr. in 

this appeal, we find them to be without merit. Therefore, 

the judgment of the district court and its order denying the 

defendant's post-trial motion will be affirmed. 

 22 
GARTH, Circuit Judge, dissenting: 

Louis Parise, Jr. has been convicted and sentenced to 

serve thirty months in federal prison for racketeering. 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 exchange for 

referring injured union members to an attorney associated 

with Parise. The difficult question raised in this appeal is 

whether Parise's conduct qualifies as a "racketeering 

activity," which turns on whether his conduct constituted a 

violation of Pennsylvania's commercial bribery statute, 18 

Pa. C.S.A. S 4108. See 18 U.S.C. S 1962(c); Brokerage 

Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 521 

(3d Cir. 1998). If Parise's conduct did not violateS 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 when 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 Parise's 

conduct violated S 4108. I believe that the majority's broad 

interpretation of the "in relation to the affairs" language of 

S 4108 represents an unwarranted expansion of its scope 

contrary to its "carefully circumscribed" meaning, 

Brokerage Concepts, 140 F.3d at 528, and that the record 

reveals no evidence that Parise violated S 4108 when the 

statute is properly construed. Accordingly, I respectfully 

dissent. 

I. 

Pennsylvania is one of twenty states that criminalizes 

commercial bribery for influencing an agent's conduct "in 

relation to the affairs" of the agent's principal.1

_________________________________________________________________ 

1. States that presently criminalize commercial bribery for influencing an 

agent's conduct "in relation to the affairs" of the agent's principal 

include 

 23 
Pennsylvania's commercial bribery statute is representative 

of these statutes. Its text reads: 

 (a) Corrupt employee, agent or fiduciary .--An 

 employee, agent or fiduciary commits a misdemeanor 

 of the second degree when, without the consent 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 affairs of his 

 employer or principal. 

 .... 

 (c) Solicitation.-- A person commits a m isdemeanor of 

 the second degree if he confers, or offers or agrees to 

 confer, any benefit the acceptance of which would be 

 criminal under [subsection (a)] of this section. 

18 Pa. C.S.A. S 4108. Courts interpreting the "in relation to 

the affairs" language in the century since commercial 

bribery statutes were first enacted have held universally 

that the core of the offense is the breach of an agent's duty 

of loyalty. See, e.g., Note, Bribery in Commercial 

Relationships, 45 Harv. L. Rev. 1248, 1249 n.10 (1932) 

("The breach of fiduciary duty has been considered the 

foundation of the offense [of commercial bribery.]"). 

Pennsylvania is no exception: in Commonwealth v. Bellis, 

399 A.2d 397 (Pa. 1979), the Pennsylvania Supreme Court 

_________________________________________________________________ 

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 Miss. 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; Pennsylvania, 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; Texas, see Tex. Penal 

Code S 32.43; Utah, see Utah Code Ann.S 76-6-508 (1953); Wisconsin, 

see Wis. Stat. Ann. S 134.05. 

 24 
stated that "the purpose of [Pennsylvania's commercial 

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 Official 

Comment associated with S 4108, which states that the 

statute's purpose is to criminalize bribery in "relationships 

where a duty of fidelity is owed." This duty of loyalty is 

breached only when an employee acts contrary to the

interest of his employer. 

The precise scope of conduct criminalized by the "in 

relation to the affairs" language in state commercial bribery 

statutes identical to Pennsylvania's has been the subject of 

a substantial body of case law. These cases have 

established a consistent and certain meaning for the text 

we must interpret.2 According to these cases, the duty of 

loyalty protected by the statute is not violated unless the 

agent (here, Pegan or Rywelski) accepts a payment in 

exchange for conduct that puts the interests of the payor 

(here, Parise and Sacks) above the contrary interests of the 

principal (here, NMU, the union). See, e.g., D.E. Ytreberg, 

Annotation, Validity and Construction of Statutes Punishing 

Commercial Bribery, 1 A.L.R.3d 1350, 1361 (1965) (noting 

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 bribe 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 principal. See 

People v. Jacobs, 130 N.E.2d 636, 637 (N.Y. 1955) 

_________________________________________________________________ 

2. Although most of the cases have arisen outside of Pennsylvania, the 

fact that they have established a certain meaning for the text in question 

makes these cases a natural source of interpretive authority. See 

Simmler v. City of Philadelphia, 198 A. 1, 3 (Pa. 1938) (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 bursar for 

list of names of ocean liner passengers, because there was 

no evidence that release of the names of the passengers 

was contrary to the interests of the ocean liner company). 

Further, it is not commercial bribery to induce an agent to 

accept payment in an attempt to influence conduct over 

which the agent has no control. See State v. Nadeau, 105 

A.2d 194 (R.I. 1954) (overturning commercial bribery 

conviction of councilman for planning to accept payment to 

attempt to influence selection of city police chief, because 

councilman had no control over selection process). 

An illustrative example of these principles is People 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 scope of 

its sign making business beyond New York, and sought to 

have Graf travel to union headquarters outside of New York 

to encourage the union members outside of New York to 

allow the sign company to accept work there. When the 

union refused to pay Graf's travel expenses, management 

made a secret arrangement with Graf to do so. Graf was 

subsequently indicted and convicted of commercial bribery. 

The basis of the charge was that Graf had accepted 

payments from management that had induced him to act 

"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 Appellate Division 

agreed, noting inter alia that Graf had done nothing that 

could be construed as putting the interests of the sign 

company over those of his union. Even though Graf had 

secretly accepted payments to do union-related activity, 

"the action taken by [Graf] was favorable to the union." Id. 

at 687. This was insufficient to constitute commercial 

bribery, the court held, because the statute "requires 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 Concepts, 

 26 
140 F.3d at 528. Of course, this does not mean that it is 

impossible for payments made in exchange for an agent'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 under Illinois 

commercial bribery statute for referral payment scheme, 

but noting that plaintiffs had survived 12(b)(6) dismissal 

only "barely," and noting that "[i]f this set of facts were 

presented to us at the summary judgment stage, we would 

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) (Civil 

RICO) (denying motion to dismiss for failure to state a claim 

of corruption of a disinterested person under 18 Pa. St. 

Ann. S 4108(b) in a referral scheme involving health care 

company). However, it does mean that making payments in 

exchange for agents' referrals constitutes commercial 

bribery only when the agent has put the interests of the 

payor above the contrary interests of the agent's principal. 

See Jackson v. Radcliffe, 795 F. Supp. 197, 206 (S.D.Tex. 

1992) (Civil RICO) (holding that hospital that referred 

clients to a radiologist in exchange for 30% of the

radiologist's fees did not violate commercial bribery 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 support the 

view that Pegan and Rywelski acted in any way contrary to 

the interests of the union when they referred injured union 

members to Parise and Sacks. There is no evidence that 

Pegan and Rywelski put Parise's and Sack's interests over 

the union's because the union was completely disinterested 

in which lawyer an injured seaman retained for a personal 

lawsuit. 

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

will "influence his conduct in relation to the affairs of his 

employer or principal." 18 Pa. C.S.A. S 4108(a) (emphasis 

 27 
added). Although an individual seaman obviously has an 

interest in which lawyer represents him, an individual 

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 that the 

port agents were receiving referral fees, the port agents did 

not, under this Pennsylvania statute, owe an individual 

seaman a duty of loyalty. 

I begin with the union's position on its port agents 

accepting referral payments. The record reveals that the 

entire union leadership knew of the cash payments, and 

even encouraged them. Referral payments were considered 

rewards for loyal port agents, whose official duties 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 (usually port 

agents) to refer injured members to designated maritime 

lawyers in exchange for cash payoffs. Indeed, Parise, Sr. 

admitted that as union president he sometimes fielded 

member requests for legal referrals, and that he expressly 

allowed port agents to refer members to personal injury 

attorneys." Appellee's Br. at 8 (emphasis added and

citations omitted). In other words, the payments were 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 violating 

commercial bribery statute because employer knew of

payment and declined to stop it; employer's allowance 

reflected fact that payment could not have been contrary to 

employer's interest). 

Further, although the union had no interest in union 

members' selection of a personal injury lawyer, the

testimony of Pegan and Rywelski reveal that they were not 

acting contrary to the best interests of the union when they 

referred seamen to Parise Jr. and Sacks.3 John Pegan, the 

_________________________________________________________________ 

3. Pegan and Rywelski testified under immunity agreements, as did 

Sacks. 

 28 
port agent for Boston, first became acquainted with Sacks 

when Pegan became unsatisfied with the lawyer he had 

hired three years earlier to represent him in a personal 

injury action. App. 663. Acting on the advice of Louis 

Parise, Sr., Pegan consulted with Sacks, who advised 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 that 

Sacks was a good lawyer: Pegan testified that he "had 

heard" that Sacks "got good results in the injury cases." 

App. 667. Thus, when the union members in Boston were 

"not satisfied with [Boston maritime lawyers] . . . [and] 

want[ed] somebody else," App. 667, Pegan would refer the 

members to Parise, Jr. and Sacks. 

Similarly, there is no evidence that Deborah Rywelski, 

who acted as the port agent in Charleston, South Carolina, 

was acting contrary to the union's interest when she 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 explain 

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 you like 

what they've got to say, fine. [I]f you don't, I know some 

other attorneys I can send you to." Id. (emphasis added). As 

in State v. Nadeau, supra, the port agents had no control 

over which lawyer an individual seaman would eventually 

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 Rywelski 

placed the interests of Sacks and Parise, Jr. ahead of the 

interest of the union in accepting payments from Parise, Jr. 

Pegan thought that Sacks was a good lawyer, and even 

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 representation only 

if the member "liked what [Parise, Jr. and Sacks had] to 

say." The union leadership not only knew of the referral 

 29 
payments, but encouraged and even directed them. Given 

these facts, there is simply no evidence that the union had 

an interest in which lawyer a member retained and no 

evidence that Rywelski or Pegan acted against the interests 

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 not 

constitute commercial bribery. 

III. 

The majority's understanding of S 4108 is dramatically 

different from the one I have presented. As I see it, 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 Pennsylvania,4 

_________________________________________________________________ 

4. The few cases in Pennsylvania that interpretS 4108 do not address 

the issue at hand. United States v. Johns, 742 F. Supp. 196 (E.D. Pa. 

1990), aff'd, 972 F.2d 1333 (3d Cir. 1991) (table), is inapplicable 

because 

it involved the quintessential example of commercial bribery. In Johns, 

an employee, responsible for purchasing supplies and services for his 

employer, chose vendors for his employer in exchange for kickbacks from 

the vendors. The employer certainly had an interest in which vendors 

provided the employer goods and services. In this case, the port agents 

gave seamen (who were not the port agents' employers 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, had 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 third parties in their 

contractual dealings with the city and its agencies. The contracts at 

issue in Bellis were between the third party entities who paid the 

councilman a fee and the councilman's employer, the city. Thus, the 

councilman was taking money to help third parties gain advantages with 

his employer. In this case, the port agents did not receive referral fees 

from Sacks so that Sacks could represent the port agents' employer, the 

union, in its affairs. Rather, individual union members chose Sacks to be 

their personal lawyers to assist them in pursuing their personal, not 

union, claims. 

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

other jurisdictions interpreting the same or similar 

commercial bribery statutes is perplexing. As I have 

previously pointed out, some twenty states have 

commercial bribery statutes that contain S 4108's exact 

phrase. See note 1, supra. Most of the relevant cases 

(especially Graf, Jacobs, Nadeau, and Radcliffe) advance an 

interpretation of the commercial bribery statute that is very 

different from that offered in the majority's opinion, 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 cited and 

the other cases. Id. Hence, it neither reconciles those cases 

with its approach, nor explains why they were wrongly 

decided, if in fact it believes they were. 

2. Failure to identify any breach of loyalty owed to the 

 union as the employer of the port agents. 

My second objection is the majority's focus on union 

members, who are not the port agents' employers, as

distinct from the union itself, which is the port agents' 

employer. It should be remembered that the commercial 

bribery statute requires and Bellis emphasizes that an 

agent must possess an undivided loyalty to his principal, 

that is, his employer. The record reveals that none of the 

actions taken by the port agents in any way affected 

adversely or were disloyal to the union. Indeed, one would 

be hard pressed to argue that the port agent's referral 

activities were adverse to the union members, but of 

course, that is irrelevant. As I have stated repeatedly, 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 14-15, is a 

classic example of conflict of interest, falling within the 

purview of S 4108's reach. In Bellis, a city councilman 

accepted payment from third parties to negotiate on their 

behalf with the councilman's employer or principal. This 

 31 
action adversely affected the City of Philadelphia's interest 

and affairs. It would have been impossible for Bellis 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 it is the 

union which is the employer of the two port agents. An 

example furnished to me by one of my colleagues highlights 

this distinction. He posited: 

 Suppose an individual visits a hospital to receive an 

 inoculation required for foreign travel. After receiving 

 his shot, the patient asks the doctor if she knows 

 where the patient could get his vision checked before 

 departing. If the doctor refers the patient to an 

 optometrist from whom she had received payments in 

 exchange for referrals, is the doctor guilty of 

 commercial bribery (and, by extension, a RICO 

 violation)? Even assuming that making referrals is part 

 of the hospital's affairs, the doctor has not committed 

 commercial bribery because she has not acted contrary 

 to the interest of her employer, the hospital. 

Even if the referral is contrary to the patient's interest (as 

a referral to an allegedly poor attorney may be contrary to 

a union member's interest), the overarching principle upon 

which Bellis is predicated requires an agent's "undivided 

loyalty to his employer." Thus, extending the bribery statute 

to cover payments for "employment-related activity" leaves 

it without limit and far exceeds the text of the statute and 

the import of Bellis. 

3. Invading the function of the legislature. 

My third objection is that the majority's interpretive 

approach seems to me inconsistent with a proper judicial 

role. As the Supreme Court stated in United States v. Bass, 

404 U.S. 336, 92 S. Ct. 515 (1971), "legislatures and not 

courts should define criminal activity." Id. at 348, 92 S. Ct. 

at 523. Courts must be careful not to expand the reach of 

criminal statutes by judicial fiat because citizens should 

not be sent to "languish[ ] in prison unless the [legislature] 

has said they should." Id. (quoting Henry Friendly, Mr. 

 32 
Justice Frankfurter and the Reading of Statutes, in

Benchmarks, 196, 207 (1967)); see also Yates v. United 

States, 354 U.S. 298, 310, 77 S. Ct. 1064, 1072 (1957) 

(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 simply to 

reject the long-established meaning of the "in relation to the 

affairs" language, and has substituted its own, much 

broader interpretation. As the majority acknowledges, a few 

months ago our Chief Judge stated in a civil RICO case 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 criminal 

under the statute. The majority turns the Brokerage

Concepts holding on its head--the case stands for the 

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 should not 

be limited in accordance with established principles of 

criminal statutory interpretation. The Brokerage Concepts 

case requires that the courts not expand S 4108 beyond its 

current parameters; I submit that a broadening of the 

scope of conduct criminalized by S 4108 is best left to the 

Pennsylvania legislature. 

4. Majority's misapplication of its broad reading of 

 S 4108 to this case. 

My fourth objection relates to the majority's application of 

its newly fashioned standard to the facts of this case. The 

majority reasons that port agents regularly referred injured 

union members to lawyers, such that paying port agents for 

those referrals influenced their work-related conduct. 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' testimony, 

payments were the standard practice in the union: the 

question was not whether the port agents would be paid for 

their referrals, but who would pay. App. 160-66. Even the 

Government's brief concedes this, stating that the union 

"historically allowed its officials (usually port agents) to 

 33 
refer injured members to designated maritime lawyers 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, absent any 

record evidence of adverse effects on the union, 5 I do not 

understand how the majority can conclude that making 

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 agents 

referring union members to lawyers when no payments

were involved. The record only supports the view that port 

agents regularly engaged in activities of no concern 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 the 

injured seamen and enhanced their income by making 

attorney referrals. 

5. Overextended reading of the port agents' scope of 

 employment. 

My fifth and final objection has to do with the actual and 

not the hypothetical functions of the port agent. The record 

discloses that their established duties embraced primarily 

accounting and financial reporting. App. 743.6 Any referrals 

_________________________________________________________________ 

5. The majority refers to Mr. Gerasimos as having provided legal referrals 

without receiving any payments. Maj. Op. at 19. Gerasimos, 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 referrals obviously was 

not a port agent. 

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

of 

a port agent. Kenneth Gerasimos, a union vice-president and former port 

agent of NMU, agreed that the constitution and by-laws accurately 

reflected the duties of a port agent, which provides: 

 Branch [port] agent shall be responsible for implementing the 

 directives of the division chairman and council in the port or 

ports 

 of their jurisdiction. They shall be prepared to account 

financially or 

 otherwise for the activities of their port or ports whenever 

demanded 

 by the division chairman. In any event, they shall prepare and 
 forward to the district treasurer a weekly financial report showing 

in 

 34 
made, whether to doctors, lawyers, therapists, accountants, 

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, their 

employer, and indeed could not be deemed evidence of 

disloyalty to the union. On the other hand, had the port 

agents falsified their financial reporting and accounting or 

disclosed to a third party confidential union information in 

return for a payment by a third party, that falsification or 

disclosure would have been evidence of disloyalty to 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 sanctioned, 

and indeed they were not, for taking monies for referrals, 

but common sense dictates that had they affected their 

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 liability being 

visited upon them. 

IV. 

Given Louis Parise, Jr.'s intimate involvement in his 

father's schemes over a period of years, he may have 

violated several criminal statutes. However, the United 

States prosecuted Parise, Jr. on a RICO charge based only 

on a tenuous reading of a rarely used state criminal 

statute. In the course of affirming Parise, Jr.'s conviction, 

the majority has extended the statute just enough to 

include his conduct within its grasp. A fair and consistent 

interpretation of the statute, however, reveals that Parise, 

Jr. has been convicted and sentenced to serve thirty 

_________________________________________________________________ 

 detail weekly income and expenses and complying with all other 

 accounting directions issued by the district treasurer. 

The majority relies upon the preamble of the NMU constitution, rather 

than this provision specific to port agents, to define the scope of the 

port 

agents' employment. The preamble describes the union's purpose with 

respect to its members, while the provision above cited describes the 

port agents' duties with respect to the union. 

 35 
months in prison for conduct that did not constitute 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