Opinion ID: 368287
Heading Depth: 2
Heading Rank: 1

Heading: Facts relating to grand jury conduct

Text: 4 The facts relating to the first two questions are largely undisputed. 5 One Dennis Taylor was a senior staff attorney for the Securities and Exchange Commission (SEC). From 1973 to 1975, he directed the SEC investigation of Delphi Capital Corporation (Delphi) and of several other companies whose stock was thought to have been manipulated by Delphi. Appellant Birdman was president of one of those companies, Uni-Shield International Corporation, while appellant Richman had had dealings with Uni-Shield stock. Mr. Taylor initiated discussions with the United States Justice Department regarding possible criminal prosecutions of subjects of the SEC investigation, and in May 1975 the Philadelphia Strike Force of the Justice Department asked the SEC to turn over the Delphi investigation file. In June the SEC complied. 6 On June 13, 1975, the Justice Department designated Mr. Taylor as its Special Attorney authorized to conduct the grand jury proceedings at issue here. After this appointment, Mr. Taylor remained in the SEC's employ and on its payroll, receiving no additional compensation from the Justice Department. He continued to act as an SEC attorney in matters relating to this case, and on at least one occasion acted as an officer of the SEC. On that occasion he took testimony of a witness for the SEC investigation, then immediately afterward examined that witness on the same subject before the grand jury for its investigation. 7 In all of his appearances before the grand jury, Mr. Taylor disclosed to witnesses and to the jury that he was both a special attorney with the Justice Department and an attorney employed by the SEC. When he took testimony for the SEC outside the grand jury room, he introduced himself solely as a staff attorney of the SEC. 8 On two occasions of which defendants here complain, 1 Mr. Taylor appeared before the grand jury with at least some of the trappings of a witness. On August 15, 1977, after being first duly sworn, Mr. Taylor made what the stenographer's transcript characterizes as a Statement to the jury: a monologue purporting to summarize various aspects of the investigation of Uni-Shield and to outline the proposed indictment. On September 6, 1977, again after being duly sworn, Mr. Taylor delivered what the stenographer's transcript characterizes as Testimony, wherein another Strike Force attorney questioned him on the witness stand and he responded. On this occasion Mr. Taylor presented an account of how he had determined or confirmed the dates of the overt acts listed in the indictment. 9 On at least one occasion after his August 15 appearance on the witness stand, Taylor, introducing himself as special attorney with the United States Department of Justice and also an attorney with the United States Securities & Exchange Commission, examined a witness before the grand jury. He also assisted in drafting the indictment with the Justice Department attorneys from the Philadelphia Strike Force. Further, he was present in the grand jury room when one J. Douglas McCullough, then a Strike Force attorney, recommended return of the indictment to the grand jury; Mr. Taylor did not himself make the recommendation to the grand jury. 10 The grand jury returned indictments against both appellants. It charged Mr. Birdman with conspiracy, mail fraud, securities fraud, securities price manipulation and failure to file required securities reports; Mr. Richman was charged with conspiracy. A subsequent indictment charged Mr. Richman with mail fraud, securities fraud and securities manipulation. 11 After learning of Mr. Taylor's participation in the grand jury proceedings, defense counsel moved for disclosure of all testimony before the grand jury and for dismissal of the indictment. The district court ordered the Government to turn over to defendants all statements or testimony by Mr. Taylor and other SEC employees appearing before the grand jury. After hearings and after considering the statements and testimony by SEC employees, the district court denied the request for full disclosure of all grand jury testimony and denied the motions to dismiss the indictments. 12