For more than a century after the founding of the Republic, the permissible scope of government appeals from adverse rulings in criminal cases was not in dispute. Independent of the double jeopardy provision of the Constitution, early common law did not provide a right of appeal for the Government in criminal cases.1 Beginning in 1907, federal enactments authorized Government appeals in limited circumstances.2 Despite this, courts generally made clear their disposition to interpret statutory authority strictly against the right to appeal.3 The subsequent decades-long trend toward expansion of the Government's right to appeal in criminal cases culminated in the Omnibus Crime Control Act of 1970,4 which amended the Criminal Appeals Act to allow Government appeals from district court orders of dismissal and certain other types of rulings.5

Today we are asked to determine the boundaries of congressional authorization for Government appeals from orders in criminal cases, pursuant to 18 U.S.C. § 3731. The issue before us arises out of a criminal prosecution against Joseph M. Margiotta, long-time chairman of the Republican Committee of both Nassau County and the Town of Hempstead, New York. The Government charged Margiotta with mail fraud6 and extortion7 for activities involving an alleged political patronage scheme. The intricate tale of fraud unfolded during a trial lasting three weeks, at which nearly seventy witnesses testified. Following the close of the trial, the jury deliberated for eight days. After it stated that it was hopelessly deadlocked, the judge declared a mistrial. In anticipation of another closely fought contest at retrial, the Government sought reconsideration of a number of legal and evidentiary rulings Judge Sifton made at the trial. After entertaining the Government's requests, Judge Sifton entered an order in which he stated that the challenged rulings would be followed at the retrial.

The Government appeals to this Court for review of this order. We find those portions of Judge Sifton's order indicating the court would abide by certain jury instructions at retrial not appealable under § 3731. The portions of the order concerning the judge's evidentiary rulings stand on a different footing. Clearly, they are appealable pursuant to the Criminal Appeals Act. We conclude, however, that the district court acted well within its discretion in making each of the contested evidentiary rulings. Accordingly, we dismiss the appeal from the order dealing with the jury instructions, and affirm the order on the evidentiary rulings.8

We shall attempt to fit a convoluted set of circumstances into a framework of coherence. As we have stated, defendant-appellee, Joseph M. Margiotta, was at all relevant times the chairman of the Republican Committee of both Nassau County and the Town of Hempstead, New York. Although he held no elective office, his power and prestige as County and Town Republican Chairman, according to the Government, gave him substantial control over public officials in Hempstead and Nassau County who had been elected to office as candidates of the Republican Party. As a result, it was charged, Margiotta was able to exert influence over the appointees of these officials. These political connections purportedly offered Margiotta the opportunity to indulge in a lucrative fraudulent scheme involving the distribution of insurance commissions on municipal properties to his political allies.

In November, 1980, a federal grand jury indicted Margiotta on one count of mail fraud, in violation of 18 U.S.C. § 1341 (1976), and six counts of extortion, in violation of 18 U.S.C. § 1951 (1976). The mail fraud count (Count One) was based on a scheme to defraud the Town of Hempstead, Nassau County, New York State, and their citizens (1) of the right to have the affairs of the Town, County and State conducted honestly and free from corruption, and (2) of the right to Margiotta's honest participation in the governmental affairs of the Town, County, and State. The factual predicate underlying Count One was an insurance commission ruse in which, pursuant to an alleged secret agreement, Margiotta contrived the appointment of Richard B. Williams & Sons, Inc., an insurance agency, (hereinafter the Williams Agency) as Broker of Record for the Town and County. In return, the Agency paid portions of its commissions to insurance brokers and other persons Margiotta had designated. Counts Two through Six charged Margiotta with violating the Hobbs Act by inducing the Williams Agency to make the payments of the insurance commissions under color of official right and by means of the wrongful use of fear.

On January 6, 1981, Margiotta filed a pretrial motion to dismiss Count One,9 alleging, inter alia, that Count One failed to state an offense under § 1341, that the Count was duplicitous, and that it was unconstitutionally vague. In response to these claims, the Government submitted an affidavit enumerating hundreds of items sent through the mail upon which fraudulent use of the mail could be grounded. Judge Sifton ruled that Count One stated an offense but ordered the Government to elect a single mailing to submit to the jury. The Government appealed that ruling to this Court, which held that the order was appealable and that the Government could proceed to trial on numerous specified mailings, United States v. Margiotta, 646 F.2d 729 (2d Cir. 1981).

Trial commenced on March 27, 1981. The Government presented evidence of a scheme of fraud spun into a web of political power. The involvement of the Nassau County Executive and the Presiding Supervisor of the Town of Hempstead in maintaining the properties owned and operated by their respective jurisdictions fostered the development of this artifice. One aspect of property maintenance was the provision of insurance coverage. As a matter of practice, the sole responsibility for obtaining insurance on properties owned by the County and the Town was delegated to a Broker of Record designated by these entities and serving at their pleasure. Upon placing an insurance policy on municipal property, the Broker of Record received, as a commission, a portion of the money paid by the municipality for the insurance policies as well as for their renewals and extensions.

According to the Government, this municipal insurance activity became the basis for a scheme to defraud the citizens of Hempstead and Nassau County in 1968. At that time, Richard B. Williams, founder of the Williams Agency, decided to seek the position of Broker of Record for the Town of Hempstead, then held by Mortimer Weis. A long-time political associate of Joseph Margiotta, Williams allegedly met with Margiotta and Weis to fashion an acceptable arrangement. The Government argued that a secret "deal" was struck: the Williams Agency would be named Broker of Record for the Town of Hempstead, and Weis would become a $10,000 a year consultant to the Town. In return for the appointment, the Williams Agency would make "kickbacks" amounting to 50% of its commissions to licensed insurance brokers and others designated by Margiotta. Thereafter, the Government contends, Ralph Caso, the Presiding Supervisor of Hempstead, appointed the Williams Agency as Hempstead's Broker of Record based on Margiotta's recommendation. In 1969, the Williams Agency began to write insurance for the Town of Hempstead and to make distributions of portions of its commissions. In 1970 Caso was elected County Executive of Nassau County. After his election, the Government charges, Caso met with Margiotta and Williams. Soon thereafter, the Williams Agency was appointed Broker of Record for Nassau County and commenced to distribute 50% of the commissions it earned on Nassau County properties to brokers and others politically allied with Margiotta. Between 1969 and 1978, the Government maintains, the compensation paid the Broker of Record in connection with this scheme totalled in excess of two million, two hundred thousand dollars.

To support its theory that the insurance arrangement was a scheme to defraud, the Government sought to prove that Margiotta tried to conceal the practice by directing the preparation of fictitious property inspection reports. Thus, it would create the appearance that the recipients of the insurance proceeds were legitimately earning their commissions. The Government, in addition, presented evidence showing that Margiotta tried to disguise this activity by misleading the State Investigation Commission when it inquired into the insurance commission payments in 1977 and 1978.

At trial Margiotta attempted to prove that he had no secret agreement with the Williams Agency for the distribution of insurance commissions as a quid pro quo for procuring the appointment of the Agency as Broker of Record. He offered a defense of good faith. While admitting that he recommended the Williams Agency as Broker of Record for both Hempstead and Nassau County, and that he directed the distribution of insurance commissions to his political allies, he argued that this activity was merely a longstanding patronage practice that had been undertaken for decades by both Republicans and Democrats in Nassau County. He further asserted that he was not responsible for the preparation of falsified inspection reports, and that he terminated distribution of insurance commissions after a New York state law was changed in 1978 to prohibit it.

After deliberating conscientiously for more than one week, the jury announced it was unable to reach a verdict. The court declared the mistrial we noted above.

In anticipation of a second trial, the Government applied to the district court for reconsideration of several rulings concerning its jury instructions and also decisions on admissibility of evidence at the trial. The Government sought a definitive order as to whether the court would make the same rulings at retrial. In an order entered on June 1, 1981, Judge Sifton stated that the legal and evidentiary rulings challenged by the Government would be followed on retrial.

The Government challenges several portions of the court's jury instructions. As we have noted, Count One alleged that Margiotta committed a violation of the mail fraud statute when he devised a scheme to defraud the citizens of Nassau County and the Town of Hempstead (1) of the right to have the affairs of those entities conducted honestly, free from corruption, fraud, and dishonesty, and (2) of Margiotta's honest and faithful participation in the governmental affairs of those entities. The Government sought a charge that a special fiduciary relationship need not be established for it to prove the first "prong" of Count One.10 Judge Sifton stated, however, that his unitary instruction was correct for the Government to prevail on the mail fraud charge, it would have to show that the scheme was devised by someone who, like a public official, owes some kind of special fiduciary duty to the citizenry.11 The Government also challenges Judge Sifton's related jury instruction that a violation of mail fraud under Count One required an additional showing of willful concealment.12 The Government, moreover, contests those portions of the jury instruction concerning Counts Two through Six, which charged Margiotta with violating the Hobbs Act by inducing the Williams Agency to make the insurance payments under color of official right and through the wrongful use of fear. The district court declined to instruct the jury that the defendant could be found guilty, as a principal, of extortion under color of official right. Instead, the court instructed that Margiotta could be found guilty of this offense pursuant to 18 U.S.C. § 2(b) only if the jury concluded that he had caused public officials acting under color of official right to induce a victim to part with money.13 Finally, the Government takes issue with those portions of Judge Sifton's order stating that the court at retrial will be bound by rulings excluding: (1) evidence that defendant's conduct violated New York law; (2) evidence of a prior similar act involving employee salary increases; and (3) certain statements of defendant's attorneys. The Government presents these contentions to this Court on an appeal from Judge Sifton's order pursuant to 18 U.S.C. § 3731. We turn at once to whether Judge Sifton's rulings are appealable.

The right of the Government to appeal from an adverse ruling in a criminal case is governed by the Criminal Appeals Act, 18 U.S.C. § 3731 (1976). See United States v. Martin Linen Supply Co., 430 U.S. 564, 97 S. Ct. 1349, 51 L. Ed. 2d 642 (1977); United States v. Alberti, 568 F.2d 617 (2d Cir. 1977).14 Amended in 1970 as part of the Omnibus Crime Control Act,15 Section 3731 presently provides in pertinent part:

In a criminal case an appeal by the United States shall lie to a court of appeals from a(n) ... order of a district court dismissing an indictment or information as to any one or more counts, except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution.

An appeal by the United States shall lie to a court of appeals from a decision or order of a district courts (sic) suppressing or excluding evidence ... not made after the defendant has been put in jeopardy....

The provisions of this section shall be liberally construed to effectuate its purposes.16

Determining whether those portions of the order stating that the court would abide by its jury instructions are appealable calls for a two-step inquiry. The threshold question is whether the adverse action taken by the district court is an action from which the statute authorizes a Government appeal. Specifically, does the order constitute a "dismiss(al) ... as to any one or more counts" of an indictment? See United States v. Alberti, supra, 568 F.2d at 621 (order granting new trial does not meet threshold requirement of a dismissal); United States v. Taylor, 544 F.2d 347 (8th Cir. 1976). If the adverse ruling by the district court does fall within the ambit of the statutory language, we must then determine whether the appeal is barred because the double jeopardy clause of the Constitution would prohibit further prosecution. United States v. Wilson, 420 U.S. 332, 337, 95 S. Ct. 1013, 1018, 43 L. Ed. 2d 232 (1975); United States v. Alberti, supra, 568 F.2d at 620. We hold that § 3731 does not authorize a Government appeal from those portions of Judge Sifton's order relating to the jury instructions. We are of the view that this ruling does not meet the threshold statutory requirement of an order "dismissing an indictment ... as to one or more counts...."

In light of Congress's mandate that the provisions of § 3731 are to be liberally construed,17 it is clear that Congress intended to remove all statutory barriers18 to Government appeals from dismissals. United States v. Wilson, supra, 420 U.S. at 337, 95 S. Ct. at 1018. The scope of the double jeopardy prohibition on Government appeals from dismissals has frequently been the subject of inquiry by both courts and commentators.19 But the outer limits of the category of "dismiss(als) ... as to one or more counts" have thus far not been defined with clarity. To decide this case it is necessary to pour content into the heretofore nearly empty vessels of these statutory words and to attempt to articulate functional guidelines20 for determining appealability pursuant to § 3731.

We agree that appealability from a dismissal under § 3731 does not require formal dismissal of an entire count of an indictment. If it did, appealability might often turn on mere pleading technicalities, such as whether the Government happened to plead the allegations affected by the challenged ruling in a separate count or together with other allegations. Instead, appealability from a "dismiss(al) ... as to one or more counts" under § 3731 requires that the district court have taken some action for instance, striking a factual allegation from the indictment that has the practical effect of eliminating an independent basis upon which a conviction could be secured. One court has defined a dismissal of a count or a portion thereof, for purposes of appeal, as the elimination of "any discrete basis for the imposition of criminal liability that is contained in the indictment." United States v. Sanabria, 548 F.2d 1, 5 (1st Cir. 1976), rev'd on other grounds, 437 U.S. 54, 97 S. Ct. 2170, 57 L. Ed. 2d 43 (1977). A brief examination of three principal cases will clothe these abstract words with fuller meaning.

In United States v. Sanabria, supra, defendant-appellee Sanabria and fifteen others were charged in a one-count indictment with conducting an illegal gambling business involving both a numbers and horse betting operation, in violation of 18 U.S.C. § 1955. The district court excluded the Government's evidence of numbers activity on the ground that the defendant was not provided with sufficient notice of this charge. The Court of Appeals for the First Circuit found the district court's action reviewable under § 3731. Although its ruling did not strike an entire count from the indictment, its action eliminated one basis for obtaining a conviction. Id. at 5. The numbers activity could have served as a distinct factual predicate for § 1955 liability and thus could have supported a separate count in the indictment. As a result, the First Circuit held that exclusion of the numbers activity eliminated a "discrete basis for the imposition of criminal liability." Id.21

In United States v. Alberti, supra, Alberti was charged in a single-count indictment with knowingly making false material statements under oath before a grand jury in violation of 18 U.S.C. § 1623 (1970). After the jury returned a verdict of guilty, Alberti moved for a new trial on the ground that newspaper publicity had a prejudicial effect on the jury's deliberations. In granting his motion, the court struck from the indictment a number of specifications of perjury it ruled could not independently support a conviction. We found the district court's order appealable under § 3731 because it had the "practical result" of dismissing a substantial part of the single count in short, the allegations stricken could have independently supported a conviction.

Finally, in United States v. Margiotta, supra, we had an earlier opportunity to consider the reach of § 3731. In denying Margiotta's pretrial motion to dismiss Count One, the mail fraud count, the district court ordered the Government to elect a single mailing from the numerous mailings described in the Count. In an opinion by Judge Newman, we reasoned that each of the mailings is a "discrete basis" of criminal liability or rather an independent predicate on which a conviction could be based. We found the district court's order appealable pursuant to § 3731. Judge Sifton's ruling discussed in the earlier Margiotta opinion implied that every one of the mailings was a valid basis for conviction because he allowed the Government to elect to proceed on any one of them. Consequently, in "dismissing" all the mailings other than the one the Government would have selected, the order eliminated independent grounds on which a conviction could be obtained.

In each case, the Government challenged a ruling which struck factual allegations or excluded evidence that could lay an independent basis for a criminal penalty. From the holdings in these cases a governing principle may be distilled when an order precludes consideration of an independent ground for a conviction, even if that predicate is not formally pleaded as a separate count in the indictment, the order is appealable by the Government under § 3731, where the double jeopardy clause does not prohibit further prosecution.

Measured against these guidelines, those portions of Judge Sifton's order stating that the jury instructions delivered at the first trial would be followed at retrial do not operate as a dismissal. The Government argues, however, that the district court's unitary instruction that the jury had to find a breach of fiduciary duty to convict Margiotta under Count One had the effect of striking a "discrete basis for the imposition of criminal liability" from Count One. Such an instruction, the Government asserts, eliminated the distinction between the two "prongs" of Count One defrauding citizens of their right (1) to have their governmental affairs conducted free from corruption and (2) to have Margiotta's honest participation in those affairs. Thus, the Government claims, if it is correct that a breach of fiduciary duty for only one of these "prongs" must be proved, the merits of which we do not reach, Judge Sifton's failure to distinguish the two "prongs" had the effect of eliminating a possible basis for conviction.

Such is not the consequence. The two "prongs" are not separate grounds but rather are mirror images of the single scheme of mail fraud set forth in Count One. By allegedly failing to participate in the governmental affairs of Nassau County and the Town of Hempstead in an honest and faithful manner (prong # 2), the defendant deprived the citizens of Town and County of the right to have their governmental affairs conducted without corruption (prong # 1). Consequently, the two "prongs" of Count One are not independent grounds but are alternate descriptions of the single fraudulent scheme:22 the distribution of insurance commissions on municipal properties to brokers and others Margiotta designated. As a result, Judge Sifton's unitary jury instruction is quite different from the appealable orders in the cases cited to us and referred to above. As we have noted, the orders in those cases eliminated factual allegations of "discrete" acts that could give rise to separate criminal liability. In contrast, the order in this case merely construed one of the requisite legal elements constituting the mail fraud offense. While the jury instruction increased the Government's burden of proof beyond that which it prefers to carry, the instruction did not preclude consideration of any discrete acts or factual predicate which could give rise to criminal liability. The instruction can hardly be viewed as a dismissal since the jury may convict the defendant if it finds that the Government meets its burden of proof respecting fiduciary duty.23

Moreover, that portion of the order which stated that, at the second trial, the jury will be instructed that willful concealment is an element of the mail fraud offense alleged in Count One is also not appealable under § 3731.24 The Government argues that this Court has jurisdiction to review this portion of the order because the court's instruction strikes an independent basis for imposition of criminal liability.25 Rather than eliminating discrete grounds or any factual predicate for a criminal penalty, this portion of the order merely enumerates the requisite legal elements of the mail fraud offense the Government must prove to obtain a conviction.

Finally, the Government seeks review of that portion of the district court's order concerning Counts Two through Six. These counts charged the defendant with violating the Hobbs Act by inducing the consent of the Williams Agency under color of official right and the wrongful use of fear. The Government asserts that Margiotta, although he is not a public official, could be found guilty as a principal of extortion under color of official right because of his influence in the appointment process. The district judge declined to instruct the jury that Margiotta could be found guilty, as a principal, of obtaining money under color of official right. Instead, the court instructed the jury that he could be found guilty by operation of 18 U.S.C. § 2(b), which establishes aider and abettor liability: "(w)hoever wilfully causes an act to be done which if directly performed by ... another would be an offense against the United States is punishable as a principal." 18 U.S.C. § 2(b) (1976). Aider and abettor activity, then, is made punishable under 18 U.S.C. § 2(b) to the same extent as activity of a principal. As a result, the court's jury instruction concerning the Hobbs Act charges does not strike from the case an independent basis of liability and is therefore not appealable under § 3731.

The Government also challenges three rulings excluding certain evidence that Judge Sifton indicated will remain unchanged at retrial. The order based on evidentiary rulings is appealable. 18 U.S.C. § 3731 (1976) ("order(s) ... suppressing or excluding evidence"); United States v. Horwitz, 622 F.2d 1101 (2d Cir. 1980), cert. denied, 449 U.S. 1079, 101 S. Ct. 854, 66 L. Ed. 2d 799 (1981) (conditional form of suppression order does not deprive Court of Appeals of appellate jurisdiction under 18 U.S.C. § 3731).26

We turn now to the merits and affirm those portions of the order which state that the court will follow these evidentiary rulings at retrial.

At trial, to rebut Margiotta's defense of good faith, the Government sought to introduce evidence that, during the period of time when many of the acts alleged to be part of the insurance commission fraud were committed, Margiotta was also engaged in a similar scheme approval of salary increases for certain employees of the Town of Hempstead on the condition that they contribute 1% of their salaries to the Republican Party. While evidence of prior similar acts may be relevant to determine a defendant's intent in bribery and extortion cases, see United States v. O'Connor, 580 F.2d 38 (2d Cir. 1978); United States v. Baneth, 155 F.2d 978, 980 (2d Cir. 1946), trial courts exercise broad discretion in determining the admission of such evidence. See United States v. Benedetto, 571 F.2d 1246 (2d Cir. 1978); United States v. Gubelman, 571 F.2d 1252 (2d Cir.), cert. denied, 436 U.S. 948, 98 S. Ct. 2853, 56 L. Ed. 2d 790 (1978). In deciding whether evidence of prior similar acts should be admitted, trial courts should undertake a two-step inquiry under Rules 403 and 404 of the Federal Rules of Evidence. First, the trial court should determine under 404(b) whether the evidence offered has relevance to an issue at trial other than for the purpose of "prov(ing) the character of a person in order to show that he acted in conformity therewith." Second, if the evidence is relevant, the court should determine whether the probative value of the evidence is substantially outweighed by the danger of prejudice to the defendant. United States v. Williams, 577 F.2d 188, 191 (2d Cir.), cert. denied, 439 U.S. 868, 99 S. Ct. 196, 58 L. Ed. 2d 179 (1978); United States v. Benedetto, supra, 571 F.2d at 1248-49. When the trial judge has made the requisite analysis, his broad discretion will not be lightly overturned. United States v. Deaton, 381 F.2d 114, 118 (2d Cir. 1967). Judge Sifton undertook a careful analysis, noting that the probative value for rebutting the defense of good faith to extortion was slight in view of Margiotta's contentions that the 1% salary arrangement was a patronage practice conducted openly and in good faith.27 As a result, Judge Sifton acted within his discretion in concluding that the probative value of this evidence was substantially outweighed by the potential unfair prejudice to the defendant.

The second category of evidence excluded by the district court consisted of statements made by Margiotta's attorneys in a memorandum submitted to the Attorney General to persuade the Department of Justice that Margiotta should not be indicted. These statements concerned the reasons for preparing the inspection reports and the circumstances in which payments were made to certain individuals pursuant to the insurance commission patronage system. According to the Government, the statements in this memorandum were admissible because they were inconsistent with the defendant's trial testimony. Margiotta, however, asserts the memorandum was properly excluded because the statements it contained were made in an interview with Government attorneys pursuant to an immunity agreement.

Statements made by an attorney concerning a matter within his employment may be admissible against the party retaining the attorney. See F.R.Evid. Rule 801(d) (prior statement not excludable as hearsay if statement was authorized by the party or is "a statement by his agent or servant concerning a matter within the scope of his agency or employment"); Vaccaro v. Alcoa Steamship Co., 405 F.2d 1133, 1137 (2d Cir. 1968); United States v. Dolleris, 408 F.2d 918 (6th Cir.), cert. denied, 395 U.S. 943, 89 S. Ct. 2014, 23 L. Ed. 2d 461 (1969). Judge Sifton ruled that the Government could not make use of these statements, not because the attorneys had no authority to make them, but because the Government offered no evidentiary basis for concluding that the statements originated elsewhere than in the interview or that Margiotta had waived the immunity afforded him. The immunity agreement encompasses both direct and indirect use of information obtained at the meeting. Furthermore, there is a presumption against the waiver of constitutional rights, see Glasser v. United States, 315 U.S. 60, 70-71, 62 S. Ct. 457, 464-65, 86 L. Ed. 680 (1942), and for an effective waiver, there must be "an intentional relinquishment or abandonment of a known right or privilege." Johnson v. Zerbst, 304 U.S. 458, 464, 58 S. Ct. 1019, 1023, 28 L. Ed. 1461 (1938), cited in Brookhart v. Janis, 384 U.S. 1, 4, 86 S. Ct. 1245, 1246, 16 L. Ed. 2d 314 (1966). In light of the broad language of the immunity agreement and the absence of clear evidence of a waiver of the defendant's privilege against self-incrimination, we find that Judge Sifton acted well within his discretion in excluding the statements contained in the memorandum.

The district court also excluded evidence that the defendant's conduct violated New York law regarding the purchase and sale of public office. Section 17-158(3) of the New York Election Law provided that "any person" who "(m)akes, tenders, or offers to procure, or cause any ... appointment for any public office or place, upon the payment of any valuable consideration, or upon an understanding or promise thereof," was guilty of an offense. (emphasis added). Even if the position of Broker of Record for the Town of Hempstead or the County of Nassau were a "public office or place" within the meaning of this statute,28 Judge Sifton acted well within his discretion in concluding that the probative value of the evidence is substantially outweighed by the danger of unfair prejudice and confusion of the issues. Fed.R.Evid. 403. Since there was no showing that the defendant was aware of the statute, admission of the evidence of any violation of the statute would be of slight probative value in determining defendant's intent or lack of good faith. Judge Sifton correctly noted the danger that the jury might infer a violation of the federal laws merely from evidence of a violation of state law.29

Accordingly, we dismiss the Government's appeal from those portions of the order relating to the jury instructions, and we affirm the district court's order on the evidentiary rulings.