Opinion ID: 614361
Heading Depth: 5
Heading Rank: 1

Heading: Picture Book and Powers Memorandum

Text: Taxpayers' strongest arguments concern the government's failure to disclose the full Picture Book and the information it obtained through the Powers Memorandum. As we discuss above, after the district court's 1967 decision but before oral argument on appeal, IRS Agent Powers sent a memorandum from Manila to McCarthy, the government's lead attorney at trial and on appeal. Powers told McCarthy that he had a copy of the full Picture Book, and that it had been prepared before the raid to identify the buildings to be raided and, where possible, to show the location of the records to be taken in the raid. Powers clarified that Chandler's notes, which Taxpayers had introduced at the district court, very definitely tie into the pictures and map by reference numbers. Powers also reported that Lukban and Nocon told him that Chandler's notes were prepared by him for the benefit of Col. Lukban. Despite receiving the Powers Memorandum before oral argument, McCarthy never informed Taxpayers, or us, that the government had a copy of the full Picture Book. Nor did he inform Taxpayers that he now knew, based on the Powers Memorandum, that both Lukban and Nocon were of the opinion that Chandler had written his notes in the Picture Book for the benefit of Col. Lukban. In describing the two parts of the Picture Book then in the record (i.e. the parts introduced by Taxpayers before the district court), McCarthy had filed an appellate brief describing Chandler's testimony that he did not give these or like papers to anyone other than the informer Spielman, and that he did not remember giving the exhibits to Colonel Lukban, the NBI, or Secretary Diokno. McCarthy wrote in the brief that [t]here is absolutely no evidence in the record that these two exhibits were ever in the possession of the NBI other than the hearsay suggestion made by counsel for the appellants in his examination. Finally, McCarthy wrote, By no stretch of the imagination can these two exhibits be characterized as instructions or directions by Mr. Chandler to the NBI or to anyone else. In light of the Powers Memorandum and the complete Picture Book that we now know were in the government's possession, we conclude that McCarthy was not entirely forthright in his representations to this court. He accurately described Chandler's testimony before the district court, and accurately described the state of the record in that court. McCarthy's statement that Chandler had not given the notes directly to Lukban was supported by what Chandler had told McCarthy in Rome. But McCarthy's statement that there was absolutely no evidence in the record that these two exhibits were ever in the possession of the NBI, when he had recently received a memorandum stating that those very exhibits were prepared before the raid to identify the buildings to be raided and ... to show the location of the records to be taken, and his statement that the exhibits cannot be characterized as instructions or directions by Mr. Chandler to the NBI, were not forthright. They concealed, rather than revealed, the true state of affairs known to the government. Nevertheless, we conclude that McCarthy's failure to produce the full Picture Book, as well as his misleading statements, had limited effect on the district court's decision. First, neither the full Picture Book, nor the information contained in the Powers Memorandum, would have significantly changed the information available to the district court. The portion of the Picture Book not before the district court consisted of the photographs to which Chandler's notes correspond and the instructions written on those photographs. Although Taxpayers rely heavily on the instructions written directly on the photographs, the Powers Memorandum states that those instructions were written by Lukban, not Chandler. Second, all of McCarthy's representations to which Taxpayers take exception are contained in the section of the government's brief responding to Taxpayers' argument that the parts of the Picture Book introduced in the 1967 suppression hearing are instructions by Mr. Chandler to the NBI as to how to conduct the raids. The government responded to this argument by writing: Mr. Chandler freely admitted that most of the handwriting on these two exhibits was his, but that some of the handwriting ... appeared to be that of others and that the diagram part was not his because he had never been to the buildings drawn thereon. He stated that he did not remember drafting these specific exhibits but that he did make such notes and drawings when interviewing the informer Spielman and he drafted such things at Spielman's request for the purpose of reducing Spielman's story to paper. Mr. Chandler stated that the language in these two exhibits was Spielman's language and that all the information on these exhibits came from the informer Spielman and that he never had been to or made any personal investigation of the described premises himself. Further, Mr. Chandler explained that he did not give these or like papers to anyone other than the informer Spielman and that he did not remember giving the exhibits to Colonel Lukban, the NBI, or Secretary Diokno.... There is absolutely no evidence in the record that these two exhibits were ever in the possession of the NBI other than the hearsay suggestion made by counsel for the appellants in his examination. By no stretch of the imagination can these two exhibits be characterized as instructions or directions by Mr. Chandler to the NBI or to anyone else. The only logical explanation for [the exhibit] is that it contains responses or answers from a person being interviewed. Taxpayers are correct that the Powers Memorandum makes clear, contrary to the last sentence of the first quoted paragraph, that the Picture Book exhibits were in the possession of the NBI. The Powers Memorandum also suggests that Chandler wrote his notes intending that they be given to the NBI. Taxpayers are also correct that the question of whether Chandler's notes were intentionally provided to the NBI was discussed both in the district court opinion and in our original opinion. See Stonehill I, 274 F.Supp. at 422 (noting that Chandler's notes came into possession of the [NBI]); Stonehill II, 405 F.2d at 741 (noting that Chandler's notes inadvertently fell into the hands of the NBI); id. at 753 (Browning, J., dissenting) (The majority finds that [Chandler's notes] `inadvertently fell into the hands of the NBI'...; the district court found only that these documents `thereafter came into the possession of' the NBI.). The primary focus of the government's argument in its brief, however, and the focus of our majority opinion in 1968, was not on whether Chandler intended that the notes be transmitted to the NBI. Rather, the focus was on whether the notes were instructions from Chandler, or were simply Spielman's information as recorded by Chandler. In recounting the facts, the majority concluded, incorrectly, that Chandler's notes inadvertently fell into the hands of the NBI. The majority wrote, further: When the United States agents made Spielman's information available to the Philippine authorities, they were not requesting any action whatsoever. Stonehill II, 405 F.2d at 746. But the primary focus in both courts was on whether Chandler was conveying Spielman's information or was conveying his own instructions. Nothing in either the full Picture Book or the Powers Memorandum suggests that Chandler was conveying his own information and instructions. Indeed, Chandler's statements to McCarthy and Huckabee in Rome suggest that he was conveying Spielman's information and instructions, as he testified at the suppression hearing.