The court concluded with a discussion of the rationale behind the Speech or Debate Clause's application to an indictment: It cannot be doubted, therefore, that the mere threat of an indictment is enough to intimidate the average congressman and jeopardize his independence. Yet, it was to prevent just such overreaching that the Speech or Debate Clause came into being. A hostile executive department may effectively neutralize a troublesome legislator, despite the absence of admissible evidence to convict, simply by ignoring or threatening to ignore the privilege in a presentation to a grand jury. Invocation of the constitutional protection at a later stage cannot undo the damage. If it is to serve its purpose the shield must be raised at the beginning. [Id.] The court did note that indictments against Members of Congress for illegal conduct beyond the scope of the Speech or Debate Clause would not be foreclosed by its ruling. "All that is required", Judge Weis declared, "is that in presenting material to the grand jury the prosecutor uphold the Constitution and refrain from introducing evidence of past legislative acts or the motivation for performing them." [Id. at 206] Status.-The case is closed. The complete text of the February 18, 1977 opinion of the district court is printed in the "Decisions" section of Court Proceedings and Actions of Vital Interest to the Congress, Part 1, April 15, 1977. The complete text of the April 13, 1978 opinion of the court of appeals is printed in the "Decisions" section of Court Proceedings and Actions of Vital Interest to the Congress, Part 5, September 15, 1978. The complete texts of the June 18, 1979 opinions of the Supreme Court are printed in the "Recent Decisions" section of Court Proceedings and Actions of Vital Interest to the Congress, September 1, 1979. The complete text of the February 27, 1980 opinion of the district court is printed in the "Decisions" section of this report at p. 634. The complete text of the November 3, 1980 opinion of the court of appeals appears in this report at p. 649. United States v. Diggs No. 78-2827 (D.C. Cir.), cert. denied No. 79-1343 (U.S. Supreme In March 1978, Representative Charles Diggs, Jr., of Michigan was indicted in the U.S. District Court for the District of Columbia. He was charged with 14 counts of violating 18 U.S.C. § 1341 (mail fraud) and 21 counts of violating 18 U.S.C. § 1001 (false statement) 1 118 U.S.C. § 1341 reads, in pertinent part: Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representation, or promises ✦ ✦ ✦ for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Post Office Department, or takes or receives therefrom, any such matter or thing, or knowingly causes to Le delivered by mail according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined not more than $1,000 or imprisoned not more than five years, or both. 18 U.S.C. § 1001 provides the same penalties for anyone who in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsities, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entity Prior to trial the Government dismissed three counts under each statute. Briefly summarizing the indictment, counts 1 through 4 alleged that Rep. Diggs engaged in a scheme to defraud the United States by inflating the salary of Felix R. Matlock, a Congressional employee, as a means of paying various personal, business, and House of Representative expenses; counts 5 through 7 and 8 through 11 charged that Rep. Diggs placed on the Congressional payroll Jeralee Richmond and George Johnson as compensation for services rendered either to defendant Diggs personally or to his family business, the House of Diggs, Inc. Counts 12 through 29 alleged that the defendant filed materially false and misleading Payroll Authorization Forms with the House of Representatives Office of Finance-counts 12 through 20 charged that he concealed from the office the fact that he inflated the salaries of Jean G. Stultz, Felix Matlock, and Ofield Dukes with the intention of using the increase in their salaries to meet his own personal and Congressional obligations, and counts 21 through 23 and 24 through 29 charged that he placed George G. Johnson and Jeralee Richmond on the payroll to compensate them for services that were unrelated to his Congressional duties. On September 26, 1978, the trial began and Rep. Diggs was subsequently found guilty on all 29 counts. He was sentenced on November 20, 1978 to serve three years on each count, to run concurrently. Four days later he filed a notice of appeal to the U.S. Court of Appeals for the District of Columbia Circuit. In his appellate brief of May 14, 1979, Rep. Diggs asserted that while it might not be proper to use a portion of an employee's salary to pay a Member's personal expenses, using a portion of such salary to pay for official Congressional expenses was proper because a Member has the discretion to determine both the salaries and responsibilities of his employees. In this regard, the defendant noted that the Government, as well as the district court, took the position that payment of either personal or Congressional expenses out of an employee's salary was illegal. This failure to distinguish between salary used to pay official expenses and salary used to pay personal expenses, said the defendant, resulted in District Judge Gasch's erroneously instructing the jury that: (1) diverting employees' salaries for payment of Congressional expenses was unlawful; and (2) the defendant could not have acted in good faith if, at the time he approved the payroll authorizations of the employees in question, he intended that a portion would be used to pay for official obligations. Accordingly, the defendant sought a reversal of his convictions under counts 1-4 and 12-20. Rep. Diggs also attacked his convictions under counts 5-11 and 21-29 on the grounds that a Member's discretion to fix an employee's salary_and duties cannot be questioned so long as the salary does not exceed the legal limit. On November 14, 1979, the court of appeals, in an opinion by Circuit Judge Malcolm Wilkey, affirmed the defendant's conviction on each of the twenty-nine counts. [United States v. Diggs, 613 F.2d 988 (D.C. Cir. 1979)] Judge Wilkey first discussed the scheme to defraud involving the inflated salaries of the Congressional (as opposed to non-Congres sional) employees. Initially, the court held that drawing on clerk-hire funds to meet either the defendant's personal or Congressional expenses was illegal. The court rejected Rep. Diggs' contention that while use of the clerk-hire allowance for personal expenses may have been improper, the use of the fund to pay district office expenses was permissible. "The obvious reading of [the] payroll form," Judge Wilkey said, "is that the monies received will accrue to the employees' sole use and benefit for services rendered. It rules out by implication any other use of the funds." [613 F.2d at 995] The court then rejected the defense argument that using clerk-hire funds to compensate employees for paying district office expenses fell within Rep. Diggs' discretion to determine both the salaries and responsibilities of his employees if the latter related to "official and representative duties." Judge Wilkey declared that: The defendant's argument erroneously equates a congressman's discretion to define the duties of an employee with the unfettered power to divert monies intended for one purpose to another, completely unauthorized purpose... [T]he allowance for clerk-hire and the allowance for district office expenses were separate and distinct. No House regulation or order authorized the commingling of these funds, either directly, or, as in this case, indirectly. Had Congress intended that the clerk-hire funds be used to pay expenses of the district office it could have so provided. [Id. at 995-6 (footnotes omitted)] The Judge pointed out that subsequent to Rep. Diggs' conviction, the House Administration Committee published Committee Order 30 (Transfer Among Allowance), effective January 3, 1977, which permitted the transfer of up to $15,000 from the clerk-hire allowance to two other funds, from which allocation could be made to cover other expenditures including official expenses. The court continued: The order has no retroactive effect. Adoption of the order to permit the transfers here at issue thus strongly suggests that this practice was not permitted prior to the effective date of the order. Even if the order were retroactive, it would not justify the defendant's conduct in this instance. A congressman may transfer funds from the clerk-hire allowance to the allowance for official expenses provided he certifies to the House Office of Finance of his election to do so. Diggs certified the opposite. If the new order had been in effect, Diggs made false statements even by that standard. [Id. at 996 (footnotes omitted)] Judge Wilkey then turned to the applicable law on mail fraud, noting that proof of fraudulent intent was critical. After reviewing the testimony on this issue at the trial, he found that it was "entirely within the province of the jury to resolve the conflicting testimony. The jury concluded that the defendant personally devised and directed a scheme to divert portions of three employee's salaries to meet his personal and official expenses. We hold there was ample evidence to support this conclusion." [Id. at 998] The court also held that the actual scheme to defraud had been clearly established and that the mails were used for the purpose of executing the scheme. Finally, the court held that the defendant's omissions on the payroll authorization forms were "material" for purposes of 18 U.S.C. § 1001, regarding false statements. Judge Wilkey next considered the defendant's contention that the trial judge erred in depriving him of his good faith defense and in directing the jury, as a matter of law, that diverting employee's salaries for payment of Congressional expenses was unlawful. He stated: Viewing the disputed portion of the instruction in connection with the whole charge, we find that the instruction correctly informed the jury on the question of the defendant's good faith . . . We need not reiterate the reasons for our conclusion that diverting employee's salaries to meet either the defendant's personal or official expenses was unlawful. The judge merely combined under one heading two kinds of illegal payments; he was not required to deal with each separately in the instruction. [Id. at 1000] Focusing on the scheme to defraud the Government by placing two non-Congressional employees on the House payroll, Judge Wilkey rejected the defendant's argument that Ms. Richmond and Mr. Johnson were properly compensated because they each had some official responsibilities: We see no significant difference between Bramblett v. United States, [97 U.S. App. D.C. 330, 231 F. 2d 489 (D.C. Cir.), cert. denied, 350 U.S. 1015, 76 S.Ct. 658, 100 L.Ed. 874 (1956)] in which the employee performed no congressionally related work while on the congressional payroll and this case in which only a nominal percentage of Richmond's and Johnson's responsibilities were congressionally related. The difference is merely one of degree and not of substance. There was sufficient evidence from which the jury could conclude that the defendant in fact placed Richmond and Johnson on the payroll with the intention of compensating them for services rendered to the House of Diggs or the defendant. The defendant's representations to the House Office of Finance that Johnson and Richmond were bona fide congressional employees therefore were fraudulent and material, in violation of 18 U.S.C. Section 1001. [ Id. at 1002] Judge Wilkey also concluded that the mail fraud violations were proven with respect to the two employees. Finally, the court found without merit the defendant's claim that the trial court erred in failing to grant his motion for discovery and an evidentiary hearing on the allegation of selective prosecution. "As a preliminary matter," the court said, "the defendant has not demonstrated to our satisfaction that he was singled out for prosecution . . . Even assuming that the defendant's evidence of selective enforcement somehow was sufficient, he has not shown that the decision to prosecute was based on an unjustifiable standard." [Id. at 1003] In a strong dissent, Judge Leventhal took issue with the majority on its approach to the thirteen counts of the indictment relating to the kickbacks which Rep. Diggs used to defray Congressional (as opposed to personal) expenses. He disagreed with the view of the majority, the trial court, and the Government that "these two quite different situations" (i.e. kickbacks for personal debts and those for congressional office expenses) should be merged". By doing so, Judge Leventhal insisted, "the [trial] court virtually obliterated appellant's good faith defense as to salary increases expended for official purposes." [613 F.2d at 1005 (Leventhal, J., dissenting)] Although Judge Leventhal agreed with the majority that no statute or rule expressly authorized the practice in which Rep. Diggs was engaged, he asserted that "[b]y the same token the applicable law is not explicit in determining the permissible use of clerk-hire funds... The question is whether the "duties" and "services" of a staff member may include incurring official expenses in order to assist the Congressman in the discharge of his congressional functions." [Id. at 1005-6] The Judge reviewed at some length the testimony of Mr. John Lawler, chief of the House Finance Office, and one of the government's main witnesses. In Judge Leventhal's view, his testimony was equivocal at best, and the jury would have been "well within its province" to conclude that Lawler supported the defendant's position that the clerkhire allowance might be used for expenses which were incidental to employment. Turning to Committee Order 30 (see discussion supra, p. 86), Judge Leventhal rejected the majority's reasoning that its promulgation without retroactive application meant that the practice it allowed was previously not permitted. Instead, he asserted, "Order No. 30 . . acknowledge(s) the justification for what had been an uncertain practice, coupled with an attempt to cope with the problem of abuse by putting a limitation as to amount." [Id. at 1007] Finally, Judge Leventhal pointed to both the testimony of the Director of Survey Research for the Obey Commission (who stated that the senior staff of the Commission had become aware of a number of practices related to allowances, including the increasing of clerk-hire salaries to compensate employees for paying official expenses) and the actions of the House Committee on Standards of Official Conduct (which did not pursue charges that Rep. Diggs had violated House rules by using funds for Congressional expenses) to buttress his arguments. On February 29, 1980, the defendant filed a petition for a writ of certiorari in the U.S. Supreme Court. On June 2, 1980, the petition was denied. [446 U.S. 982] Status-The case is closed. The complete text of the November 14, 1979, opinion of the court of appeals is printed in the "Decisions" section of this report at p. 584. United States v. Diggs Civil Action No. 79-2148 (D.D.C.) As a follow-up to its criminal prosecution (see page 84 of this report for a discussion of that case) the United States, in August 1979, filed a |