Court Opinion

ID: 9483488
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:21:50.406879+00
Date Added: 2024-06-11T17:49:39.096383
License: Public Domain

NIEMEYER, Circuit Judge,
dissenting:
Carl Smith, a regional HUD manager in West Virginia, was convicted by a jury of accepting a $60,000 in-kind bribe, failing to report the income on his income tax returns, and lying to a grand jury. Interpreting broadly a nonprosecution clause contained in a use-immunity agreement, which Smith had obtained in connection with his testimony against co-employees, the majority effectively concludes that Smith obtained immunity from virtually all prosecutions for federal criminal conduct and therefore must be released from any punishment for his crimes. Because I believe firmly that the agreement, on its face and as described by the parties to it, was never intended to reach so far, I would affirm the convictions.
I
When Carl A. Smith was subpoenaed to give testimony during the prosecution of HUD consultant Frank Vincent, Smith retained Robert King, a former assistant United States attorney, to represent him. In exchange for Smith’s cooperation King demanded, on behalf of Smith, a use-immunity agreement in the standard form. He also requested that additional language, previously used by U.S. attorneys, be added to the standard form agreement: “The United States will not prosecute ... Mr. Smith for any federal offense based on information now in the possession of the government.” Although Assistant United States Attorney Mary Feinberg suspected Smith at that time of illegal conduct, she concluded that, because her investigation had developed no evidence of wrongdoing, the United States gave up nothing in agreeing not to use against Smith any testimony he gave under the agreement and not to prosecute Smith based on the government’s then existing knowledge. The agreement was thus signed on October 20, 1989.
Following Frank Vincent’s trial, the investigation into the activities of the West Virginia HUD office wound down for a time, until a tip, that Maurice Toler had bought Smith a farm combine in conjunction with some HUD activities, reopened it. The renewed investigation uncovered evidence of not only the bribe which was the subject of the tip but also other gifts in kind from Toler to Smith, as well as other improprieties concerning Toler’s work on a HUD project known as Lemma Village. As the result of this information, Smith was indicted.
*866Before trial, Smith invoked the use-immunity agreement to preclude the United States from using any information in the possession of the government as of October 20, 1989, when the agreement was signed. The question considered by the district court was whether in the agreement the phrase “information now in the possession of the government” referred to any information or just incriminating information.
After hearing testimony from the parties about their intent when signing the agreement, the district court concluded that because the operative language had previously been used by the U.S. attorney’s office but had been requested by Smith’s attorney, it was to be construed without favor to either party. The court thereupon held:
[T]he United States and Mr. Smith have agreed that the United States will hot prosecute Mr. Smith for any federal offense based on information of the commission of any such offense in the possession of the government at the date of the agreement on October 20, 1989.
[T]he United States is precluded from using any information which was in the possession of any agency of the government on October 20, 1989 insofar as it would then have indicated the commission of a crime on the part of the defendant.
(Emphasis added.)
During trial, the district court conducted a hearing eách day to determine whether the government’s proffered evidence for that day should be excluded by reason of the use-immunity agreement as interpreted by the court. Following this procedure, the district court excluded notes of interviews conducted before October 1989, during the earlier HUD investigation, and certain HUD documents (a Smith memorandum requesting waiver of bidding requirements for Lemma Village, a letter from Toler to Smith seeking quicker HUD payments, and documents and testimony by Smith’s deputy about them). The court also excluded testimony about Smith’s 1987 and 1988 tax returns by IRS agents who audited them prior to October 1989, although it allowed certain testimony by them on the ground that “none of it would be, in any manner, helpful to the government prosecution of Mr. Smith.” The court did, however, admit documents that were in possession of the government which did not indicate the commission of a crime as of October 1989, such as the HUD contract, other standard HUD documents concerning Lemma Village, Smith’s tax returns, and a transcript of Smith’s grand jury testimony.
The jury found Smith guilty on all counts, and the court sentenced him to 54 months imprisonment. This appeal followed.
Smith now contends that it was error for the district judge to have interpreted the specially added language in a manner that excluded only incriminating evidence. He contends that the plain language, “information now in possession of the government,” means all information in possession of the government on which it would rely to prove a case against Smith. At argument, however, counsel for Smith conceded that some information about Smith, including his name and identification, could not have been intended. For example, had Smith robbed a bank after October 1989, Smith’s counsel conceded, the government could use knowledge held prior to October 1989 that the bank was federally insured to prosecute Smith' for violating the federal prohibition against robbing a federally insured bank.
II
The language of the nonprosecution clause at issue reads:
The United States will not prosecute of [sic] Mr. Smith for any federal offense based on information now [October 20, 1989] in the possession of the government.
This language is a straightforward agreement not to prosecute specifically identifiable offenses. The offenses are qualified in two respects: (1) they must be federal offenses, and (2) they must be ones that could be prosecuted on October 20, 1989, *867based on information then in possession of the government. Any other offense is not included within the scope of the agreement. The object of any analysis, therefore, must begin with the identification of those offenses immunized by the agreement, leaving all others for future prosecution.
This inquiry need not occupy us long, because the parties agree that as of October 20, 1989, the government did not have information on which to base a prosecution against Smith for any federal offense. It is not surprising that the government witnesses, therefore, testified that the nonpro-secution clause of the use-immunity agreement was of no moment. From the government’s point of view it was giving up nothing. As Assistant United States Attorney Feinberg said, “I feel he [Smith] is guilty. I have not been able to develop any information that he’s guilty so we are not giving up anything.” Assistant United States Attorney Wayne Rich testified:
I don’t know that it [the agreement] was illusory and meant nothing. What it meant was that we agreed not to use any information in our possession which was indicating that Mr. Smith had committed any crimes with inculpatory type information, and since we didn’t have any, any information to that effect on October 20, 1989, we, the United States, were not giving up anything by including that provision. That’s what it meant.
And from Smith’s point of view, he was receiving the assurance that the government was not holding back a prosecution that it could later launch after it had obtained the benefits of his cooperative efforts.
In determining the proper interpretation of the agreement, it is also useful to understand what the agreement is not. All parties agreed, for instance, that it was not a full transactional immunity agreement, immunizing Smith for all crimes that he may have committed up to that point in time. Smith’s attorney testified:
Q: Will you agree with me, Mr. King, that that is not a blanket immunity for all offenses as of the date of this agreement?
A: Yes.
Q: And it’s not a transactional immunity agreement in the sense that he is not going to be prosecuted for certain types of offenses, that is, tax offenses or extortion offenses or any other enumerated offenses; is that correct?
A: I would characterize it as a nonpro-secution agreement.
Q: Well, my question—
A: I characterize it as a nonprosecution agreement rather than a transactional immunity situation.
Smith’s attorney went on to point out that a transactional immunity agreement would be broader than that which he actually obtained. The nonprosecution clause is also not an agreement to control the admissibility of evidence or information, or to immunize such information from introduction in any future prosecution. Evidence or information that could be evidence was not the object of the negotiations. Rather the agreement focused on the prosecution of offenses: “The United States will not prosecute ... Mr. Smith for any federal offense_” (Emphasis added.)
Again, Smith agrees. His attorney testified:
[Paragraph 3 [the nonprosecution clause] protects him [Smith] from prosecution for any offense based on information in possession of the government on or before the execution of the agreement, October 20, 1989.
(Emphasis added.)
On October 20, 1989, the government did know that Smith had filed tax returns over the years, had carried out duties of his office as a HUD manager under suspicious circumstances, and had indeed testified before the grand jury. But the known evidence of those activities did not support a prosecution for any federal offense. And about this, Smith agrees. When information subsequently came from a coconspirator to the attention of the government that Smith had committed federal offenses, the offenses could therefore be prosecuted, because they were not included in the specifically designated offenses for which immunity had been given.
*868The majority, overlooking as the object of the agreement the identified offenses for which the government could not prosecute, aimed at the “information-in-possession-of-the-government” language, observing that the word “information” is not qualified by the word “inculpatory,” as found by the district court. I would submit that such an analysis is too narrow and fails to take into account the entire sentence. The sentence identifies “information” as that on which a prosecution could be based. While the word “inculpatory” is not used, that intent is certainly conveyed by the language.
The effect of the majority’s interpretation of the nonprosecution clause is to provide Smith with transactional immunity, or more, and to preclude any future prosecution of Smith for virtually any federal offense, a result never intended by the parties. If Smith were to rob a federally insured bank tomorrow, the majority would have him immunized from prosecution, because the government had information as of October 20, 1989, that the bank was federally insured, a necessary element of federal bank robbery. Not even counsel for Smith has pressed for that interpretation, so conceding at oral argument.
Ill
While I believe that the agreement was only intended to immunize “offenses” and not “information,” the majority interpretation, if accepted, leads at most to an ambiguity, leaving the agreement open to interpretation based on extrinsic evidence. See Hartman v. Blankenship, 825 F.2d 26, 29 (4th Cir.1987) (recognizing the helpfulness of extrinsic evidence in interpreting the terms of an ambiguous plea agreement). The district court took evidence about intent and found as a fact that the parties did not intend to immunize the offenses of which Smith was convicted in this case. The court’s findings are consistent with at least some of the testimony. For example, Assistant United States Attorney Rich, who negotiated the agreement on behalf of the government, testified that the agreement intended to provide that “any information we [the government] had that showed criminal wrongdoing by Carl Smith wouldn’t be used against him.” He also testified about the intent that “we [the government] wouldn’t use any inculpating information we had in our office against Mr. Smith. And, in fact, since we didn’t have any, as Ms. Feinberg indicated, we weren’t giving up anything.”
Our scope of review of the district court’s factual findings is narrow, and when those findings are supported by substantial evidence, as in this case, we must affirm.
I therefore strongly, but respectfully, dissent.