PIPEFITTERS v. UNITED STATES
Legal provision: Federal Election Campaign
Argument of Morris A. Shenker
Chief Justice Warren E. Burger: We will hear arguments next in Number 70-74, Pipefitters Local Union against the United States.
Mr. Shenker you may proceed whenever you are ready.
Mr. Morris A. Shenker: Mr. Chief Justice and may it please the Court.
This case involves an indictment that was returned in the City of St. Louis charging a labor union, Local 562 -- Pipefitters Union Local Number 562 and three individuals that conspire to make unlawful -- to make political contributions from that Local.
The indictment in the case alleged that a political fund was established from which fund contributions would be made and the indictment stated that this fund was the fund of the Local Union.
There was no allegation in the indictment that the contributions were made involuntary by the members of the union and non-members of the Union who worked under the jurisdiction of the Union, who made these contributions.
And the indictment alleges that as part of that scheme or artifacts that the funds were collected by officers, stewards, members, and employees of the fund -- that is of the union and they were also collecting that the members and the officers of the Union were collecting for the fund.
Pre-trial motions were filed and in the pre-trial motions, it was alleged that the indictment was attacked on the ground that it was not charged that the contributions were made involuntarily on the ground that it was not alleged in the indictment that the payments were union dues and that the gist of the pre-trial motion was -- and the gist was that this was really a parallel political fund that was set up by the Union and that for purpose of receiving and making political expenditures.
Receiving political contributions or making political expenditures and we contended that there was no violation shown on the face of the indictment.
A bill of particulars was requested but instead of the bill of particulars, the government merely filed a court memorandum and in that memorandum, the government stated that it was not necessary that it was no necessity to prove that the funds were not volunteered.
That voluntariness was not an essence of the crime that was charged.
The government's theory of the case at the trial was that they submitted an instruction and that instruction which was set up in appellants and petitioners’ brief in pages 12 and 13 lists a number of grounds.
The original 10 grounds which are listed on page 12 were submitted by the government and that the request of the defendants’ additional grounds were at it and that basis, the Court instructed the jury and gave that as the task that those are the matters which the jury could consider whether the fund was in fact a fund of the Union or rather that was a voluntary political fund.
That was established by the union.
The defendants’ requested instructions where in it would specifically state as to that making voluntary payments as a defense and the Court said in the instruction however, the mere fact that the payments into the fund may have been made voluntary by some or even all of the contributors thereto does not of itself.
The Court said it means that the monies that were paid into the fund was not union money and it is on that theory on which the case was tried.
The defendants also submitted two instructions which I will refer to later.
They submitted many instructions, but two particular instructions which we thought set up specifically the law that should be governed in accordance with the prior decisions of this Court.
But the Court refused all of the requested instructions from the defendants and the only ones that the Court incorporated were those which are set out in the footnote on page 20.
Now the facts were as follows.
But first let me say this, let me say this.
The jury found the defendants guilty and the individuals as well as the union?
The union was fined $5,000.00 and each defendant was sentenced to one year in jail and a punishment, an additional fine of $1,000.00.
The history of the fund is this.
In 1949, a political fund was established by this, a voluntary political fund was established by this union and it was administered independently openly and notoriously and they made contributions of hundreds of thousands of dollars from 1949 on until the date of the conviction.
But there was one change that took place in this fund in 1963.
The union negotiated a contract with the employers who provided for a check off system and when they provided for the check off system, they consulted with their lawyer, a very prominent labor lawyer in the St. Louis who has devoted most of his lifetime to labor law, Mr. Harry Craig whose name is mentioned and who was a witness in the case.
And Mr. Craig at that time suggested, in view of a decision that was in the law that prevailed that the Eastern District of Missouri.
It was a case wherein the Teamsters were prosecuted at Local 688 was prosecuted for making contributions from the union to which the judge sustained a motion to dismiss after the evidence was in on the ground that this was -- that the money came in voluntarily to the Union.
Mr. Craig first suggested that there should be a check off of the political contributions that is the voluntary political contributions in the same manner as they checked off the other monies that was collected by the Union but it would be paid specifically to the voluntary political fund.
After a while, Mr. Craig changed his mind and provided a form which was to be filled out by each of the members that wanted to contribute to the political fund and that is where in they provided and stated in the form that they are willing to make voluntary contributions.
They are willing to contribute so much per day’s work and that they can cancel that whenever they desire.
They can discontinue giving that money and that they understood it is voluntary and that they understood specifically that this money is being given for political and other purposes to be administered by this independent fund.
After that was done, then it was decided to continue to collect the money in the same manner which they did before.
That is the foreman or the stewards on the job continued to collect the money and send it in to this political organization, that is to this voluntary of political, charitable, and educational fund.
Chief Justice Warren E. Burger: Mr. Shenker?
Mr. Morris A. Shenker: Yes.
Chief Justice Warren E. Burger: Could any of the contributors specify the candidates they wanted to contribute to or the particular political party?
Mr. Morris A. Shenker: No sir, this was a complete fund -- a fund that was all put in together of all the people that contributed and then those people and then they have political meetings often and would endorse candidates and they had an administrator of the fund who could act as he sought it and that which have brought powers to act.
But an answer to that question, I might tell you, that it so happens that most of the contributors that does –- Well, I put it like this, all the witnesses that testified were testified that they were democrats and they contributed to the democratic party and then one person that testified, he said he was a republican and that he did not contribute to the fund.
That was one of the witnesses that testified so that -- that question would answer your question directly.
They did not specify.
Well, they could stop contributing anytime they wanted.
Of the evidence that was offered, the government introduced 12 stewards and foreman who collected the money.
Some of those, at least one foreman as I recall, it is in the record testified that even though he collected contributions, he himself never contributed.
They also testified that in many of these other government witnesses.
They also testified that in many instances, when some people did not contribute that he called and asked the director or other people who were in charge of the fund and they told him there is nothing to be done that is strictly voluntary.
And that that went on two years.
And additionally, 77 witnesses testified before the defendant and there out of those 77, 32 testified that they either never contributed to the voluntary political fund either contributed that sometimes and not contributed at other times or contributed whenever they felt like it as many times they did not contribute.
The testimony also shows that while there was a complete record kept of the money that was received that there was no way from the records to determine if anyone paid often full or continuously paid or whether there was a way of finding out from the records if a person was delinquent and did not pay.
The evidence also showed that no effort was ever made to get people to pay off anything that may have been delinquent or that they may not have paid in accordance with their written instrument wherein they agreed to contribute to the voluntary fund.
Unknown Speaker: Mr. Shenker, does the record show what percentage of the union members signed the contribution agreements?
Mr. Morris A. Shenker: I do not recall that.
It does not show, Your Honor.
But for the sake of discussion, I think while the record does not show I would have to say that a large number of the people of the members of the union as well as the people that worked under the jurisdiction of that union did sign that agreement.
It was a fund that was administered, that had separate bank accounts.
They have a separate name.
They made payments out of that fund by check.
It was audited.
There was -- No discrepancies were found.
The government agents had the (Inaudible) over a period or year, in fact that it turned them to us just before the trial and they testified they could find no shortages of any kind.
Unknown Speaker: Was any of the money used for other than political purposes?
Mr. Morris A. Shenker: Yes, it was sometimes in connection with the charitable contributions.
Substantial amounts were used in connection with charitable contributions. On one occasion, there was a contribution made towards some payment on behalf of some people that were benefits.
It was not in the union benefits.
It was made as a contribution.
They also invested some money in buying a place in Clarksville, Missouri which is about approximately 60 miles from the city where the main office is which place -- that it were going to have recreation facilities where it could also hold political meetings and --
Unknown Speaker: Was that a union facility?
Mr. Morris A. Shenker: No sir.
No sir, it was a facility belonging to a voluntary fund.
Voluntary political --
Unknown Speaker: But the fund was used for -- I mean the union would use it for recreation?
Mr. Morris A. Shenker: No sir, the people that paid into the fund would use it.
Unknown Speaker: I see.
Mr. Morris A. Shenker: And then it was next to -- it was next to another facility that was helped by the welfare fund of the said --
Unknown Speaker: Well then I take it that Mr. Shenker, the issue here in this case is not the question of the constitutionality of the statute insofar as it prohibits the union from using membership dues normally paid in and checked off for political purposes?
Mr. Morris A. Shenker: Well, we say that that is not an issue, that we say that this was money that was given specifically for that purpose.
Unknown Speaker: Well, you are not challenging the law insofar as it would apply the use of membership dues?
Mr. Morris A. Shenker: Well, we are not challenging it that way unless, unless this Court were to hold -- unless this Court were to hold that we are not permitted to do what we did, that of course, we would challenge.
But basically --
Unknown Speaker: Well, do you --
Mr. Morris A. Shenker: Let us put it like this --
Unknown Speaker: Do you or did you in the lower court challenged though?
Mr. Morris A. Shenker: We challenged the constitutionality of the law.
Unknown Speaker: Right across the board?
Mr. Morris A. Shenker: Not in so many words.
We did not challenge it because we do not consider that dues and we never did consider that dues.
In other words, the question is this?
We did not consider that dues.
So therefore, we did not challenge the law on that manner.
Unknown Speaker: Well, you did not ask for a dismissal of the indictment on the basis of the law in its entirety was unconstitutional, did you?
Mr. Morris A. Shenker: I do not think so.
We did not.
Unknown Speaker: And you have never claimed that in this case?
Mr. Morris A. Shenker: We asked that this was vague and indefinite and uncertain.
We did contend that that the law was vague and we will point out to you particularly that it is vague insofar in the manner in which it was construed by the lower court that the law is --
Unknown Speaker: Mr. Shenker, the statute meets its contributions by any labor organization?
Mr. Morris A. Shenker: Right.
Unknown Speaker: In your position, there is no contribution here by any labor organization?
Mr. Morris A. Shenker: Yes.
Unknown Speaker: Is that the basis of --
Mr. Morris A. Shenker: That is exactly our contention, that this is not a contribution by a labor organization.
But we say that if it is being held unconstitutional -- if it is being held unconstitutional, in other words if the interpretation that was given to the lower court, we say it is unconstitutional as applied here.
But we are not challenging it at this point because we are really not concerned.
Unknown Speaker: Well, I gather if any labor organization makes a contribution.
It is immaterial whether the fund from which the contribution is made, union dues or some other funds of use, right?
Mr. Morris A. Shenker: Well, that seems to be the understanding accepting in our District, and if I may just say the cause of good faith as for as we are concerned, that is important in this case and that is why I am going to say that because we do not have to advise of counsel all the way on it.
And that is just that we did have a case where a union.
The Teamsters Union Local 5688 made a contribution and they tried them and the Court sustained a Motion for Judgment of acquittal and the Government did not appeal but what happened there was this where they did as the following that members were able to designate to the union that a part, a certain part of their dues shall be used for political purposes.
In other words, in the --
Unknown Speaker: There I gather the charge of the cause is the labor organization with the team --
Mr. Morris A. Shenker: That is right.
Unknown Speaker: -- who made the contributions?
Mr. Morris A. Shenker: That is correct.
Unknown Speaker: And your position here is that no labor organization is involved and the contribution is made by an organization separate from the labor law?
Mr. Morris A. Shenker: That is correct.
A parallel organization that was established by Local 562 --
Unknown Speaker: And you are also claiming that the Union, the labor organization did not compel members to make the contribution to the separate organization?
Mr. Morris A. Shenker: That is correct.
You brought me right to the very important question that we have here.
The Court instructed on the question about that it was not necessary that a contribution be voluntary.
In other words, we say that it did not make any difference whether the contribution was voluntary or not voluntary but at a trial below in the District Court somehow the government just did not get around to ever say that it was perfectly proper to have a parallel organization which could make political contribution as long as those contributions are voluntarily received and that it was perfectly alright for the officers and the agents of the union and the employees of the union to participate in it.
Now, on appeal, for the first time, the government and they agreed says that it is proper to have such an organization as long as the contributions are voluntary.
Now we submit that the least we should have that is that question determined -- be submitted to the jury to determine whether the contributions were or were not voluntary.
Unknown Speaker: Well, except as Mr. Justice Brennan has suggested what the statute prohibits is the making of the contribution by a labor organization and if the contribution was by the labor organization, there is a violation of the statute regardless of where those funds and the labor organizations came from.
Now if I gave your union $50,000.00 as a present last Christmas, right to the union, it would be a violation of the statute to make a political contribution with that $50,000.00 even though my gift was wholly voluntary?
Mr. Morris A. Shenker: That is correct.
With this exception and as I say you do not have to reach that.
You do not have to reach that because we contend that this was not a contribution by a labor union.
Unknown Speaker: I understand that.
Mr. Morris A. Shenker: But I want you to keep in mind the Teamsters case and say look which was the law in our district at that time, which law could be liable where it said that if it is a voluntary contribution -- that is a voluntary contribution to the union that the union could pass that money on.
But we do not have to reach that right now.
We are not concerned with that because we contend that this was not a contribution of the union.
Justice Thurgood Marshall: Mr. Shenker.
Mr. Morris A. Shenker: Yes sir.
Justice Thurgood Marshall: On your parallel lines, you remember way back if you look at the distance they get together, how parallel would the line be?
Mr. Morris A. Shenker: Well, the --
Justice Thurgood Marshall: Where did the –- Did you have an office?
Mr. Morris A. Shenker: We have an office next door, right across the hall from the union.
In other words it is a large building occupied --
Justice Thurgood Marshall: Members or non-members of the union?
Mr. Morris A. Shenker: Yes sir and here is who they were.
They were Local 562 had jurisdiction of certain large jobs.
Now there are small unions in the areas of the outside of Missouri who are not equipped to handle large jobs.
So Local 562 would have jurisdiction of large jobs and those instances some of the employees that were members of the other locals would come and work on these jobs.
Now under the Lehman Griffith (ph) originally they used to pay $8.00 a month as a contribution to the Union.
Under the Lehman Griffin (ph) Law, Mr. Craig, the union attorney said that it would be some question that if they are permitted to pay the $8.00 per month that therefore they would have to be permitted to join later the union and which would make this Local entirely too big and they would not be justified that expenditure rose that way.
So for that reason, they abandoned the $8.00 completely, but the people that worked on those jobs some of them did contribute to the political fund.
Justice Thurgood Marshall: $8.00?
Mr. Morris A. Shenker: Not all, they receive more than that.
They contribute as much as $2.00 a day.
In other words, they contributed and started off at a dollar a day and it finally went to $2.00 a day.
But it was all voluntary and the evidence showed that many of them testified that they did not -- many of them did not contribute at all as they did not affect their job.
Chief Justice Warren E. Burger: Mr. Shenker, I thought this case had been tried in District Courts entirely on the theory that this whole thing was a scheme and a plan and subterfuge to have this committee act like an independent committee when it was in fact the union functioning under another name.
Now, was that not the government theory?
Mr. Morris A. Shenker: That is where you finally wind up being tried.
We did not know what was being tried to be perfectly frank about it.
But we finally wound up that that is what was being tried.
That was tried that this was a shame in the scheme to put a union to make political contributions.
Now the reason that was voluntariness was important because if the people made the contributions voluntarily, why would they make that contribution if the union was to put him on pressure unless it was voluntarily.
Chief Justice Warren E. Burger: Well, was not the theory of the case much like the theory of the cases where the government or some other litigant tries to pierce the corporate veil and show that what pretends and purports to be one thing is really something else.
Was that not the whole idea of this case?
Mr. Morris A. Shenker: I think that is correct.
That was an attempt made to do it in that way.
Chief Justice Warren E. Burger: I think that is the thrust of the instructions to the jury?
Mr. Morris A. Shenker: That is being thrust that the instructions to the jury and if you will look at pages 72 and 73 of the defendants’ briefs and which were the instructions that we requested, there are many others but two of them particular there and if I could just take one second to read of them at least where that is on page 72 where we said, the Court instructs the jury that the law permits labor union members to set up a fund or organization for the collection of money to be used for making contributions to candidates for federal political office.
The law merely prohibits labor union money from being used for such purpose.
Therefore, if you find that contributions made to the political, educational, legislative, charity and defense fund were made by members of Local 562 voluntarily and did not constitute the payment of union dues or labor union money, you must find the defendants not guilty.
Now the Court refused, they gave these instructions in various ways and the Court refused this particular instruction in every way.
Now, it was not --
Unknown Speaker: Mr. Shenker, do I understand you to have answered Mr. Justice White earlier, that if we agreed that indeed this voluntary fund was simply an alter ego of the union?
Mr. Morris A. Shenker: Yes.
Unknown Speaker: And that you attack the face of the statute --
Mr. Morris A. Shenker: Yes.
Unknown Speaker: -- as unconstitutional because you say what, the -- prohibits Congress to enact or enacting a law prohibiting labor unions for making contributions?
Mr. Morris A. Shenker: If those contributions are made voluntary.
Unknown Speaker: Only if made voluntary?
Mr. Morris A. Shenker: Only if they are made voluntary.
In other words, and secondly we would say that it is vague that it does not spell out just what you can and what you cannot do.
And that it is restrictive as far as the First Amendment is concerned.
But now the point that we pointed out, that was a complete like getting back --
Unknown Speaker: Are you saying that, just to carry it on.
Let us assume that a union collects regular dues from its members but it also has them donate voluntarily pay other money, and with the consent, for the union to use it for political purposes?
Mr. Morris A. Shenker: Yes sir.
Unknown Speaker: And it would be -- they would be union funds.
There is no separate fund or anything else and the union uses that extra money for political purposes presumably that the statute forbids that?
Mr. Morris A. Shenker: I would say certainly the way they handled the Teamsters case in St. Louis that it does permit it.
In other words, it would automatically --
Unknown Speaker: The statute permits it?
Mr. Morris A. Shenker: Now, I would say it does.
It would automatically become a special fund.
Unknown Speaker: Well, but if it did not permit -- if it did not permit it you would say the statute was at least to that extent unconstitutional?
Mr. Morris A. Shenker: Yes sir.
In other words, all the legislative history shows.
It says that it should not be union money but if money is given for a special purpose, you could have a trust fund set up for political purposes.
You can do anything else.
I am sure the Court is permitted with the legislative history.
We set it out at great length in our brief.
Unknown Speaker: So you say the crucial thing in this case has to be whether or not the members voluntarily make contributions for political purposes and really if they are relevant, would they make it to a separate fund under the union?
Mr. Morris A. Shenker: No, no, quite a little bit far than that, a little far than that.
I would say this, that the crucial thing is here, that these people adopted to do anything and everything the legislative history, the lawyers and as well as three judges of the Court of Appeals said was that adequate to set up a parallel fund.
Unknown Speaker: So you were taking more precautions then --
Mr. Morris A. Shenker: That is right.
That is right.
We did not go all the way as the Teamsters are doing there.
We took precautions.
The thing that -- the thing that is really is so glad out here, as this case goes, there is not anything that these people did that was a violation of law.
You could take all the acts which -- normally they give all the instructions and there are all things which are set out that you can do by setting up a parallel organization that you can have the business agent to be active in it.
You can have the stewards.
You can have the foreman.
You can have everyone else be active in it and still they go on, turn this on and attempt to make this a violation, make this a violation under the conspiracy.
Now, I see that I only have a few minutes left and I would like to have permission to have some time for rebuttal.
Chief Justice Warren E. Burger: Very well Mr. Shenker.
Argument of Wallace
Mr. Wallace: Mr. Chief Justice and may it please the Court.
Since 1907, Congress has prohibited corporations and national banks from making contributions to certain political campaigns.
This legislation has been changed over the years in the history has recounted in previous opinions of this Court between the Auto Workers case in Volume 353 U.S. In 1943, Congress first extended the same prohibitions to labor unions on a temporary wartime basis and then 25 years ago in 1947, this prohibition against unions and against corporations, the same prohibition was made permanent in the statute under which the present prosecution was brought.
The legislative history of these provisions which has also been recounted in previous opinions shows a dual congressional purpose (a) to protect the electoral process from undue influence which in some instances Congress believed threatened the very integrity and the representative character of the elections and (b) to protect the individual stockholders and individual union members from having their funds used to support political causes they might disagree with or that they might prefer not to support financially.
And it seems to us not to be coincidental that the extension of these prohibitions to unions followed upon the protective legislation of the preceding decade such as the National Labor Relations Act, Norris-LaGuardia Act.
The result of that legislation like corporations, unions that became aggregations of economic power fostered an important way by government through the granting of special legal status and special prerogatives, legal powers which might induce individuals to pull their economic resources in these organizations.
And the Congressional concern that is manifested through the legislative history was the payments made by individuals to these organizations for reasons other than a desire to support particular candidates for public office might be diverted to that use.
Congress sought to assure through this legislation that when individuals join together for the purpose of supporting political campaigns, it will be done truly of their own volition.
It will be a matter of their own deliberate choice and not something that results from the power of organizations being applied to them.
Now in the present case, unlike the preceding ones in which this Court has considered the statute, disbursements from the Pipefitters Fund were made directly to Federal Political candidates.
So that is true in the sum of almost $100,000.00 in the 1964 Election and almost $50,000.00 in the 1966 Election which are the only two Federal Elections during the indictment period.
The indictment was in the Spring of 1968.
And there is no question about what these are contributions or expenditures within the meaning of the Act.
The entire issue is whether these contributions or expenditures were made by the union for purposes of applying the statute.
Unknown Speaker: You state the issue on page 24 of your brief.
So the issue in this case present as whether Congress did and may validly prohibit labor unions from using regular unions funds to make direct monetary contributions for political purposes to candidate in Federal elections and of course that is not the issue at all from the point of view of your opponents on the other side.
They said that issue is not here.
This is -- basically here, the issues are factual issues and that is whether or not these were union funds.
But even the issue as you stated.
Mr. Wallace, I am intrigued by that word “regular.”
That does not appear in the statute, why did you feel the need to put that adjective in there?
Mr. Wallace: Well, I do not think the statute requires that.
I think that the facts here permitted the word to be put in at the issue involved in this case shown by the evidence in this case.
Unknown Speaker: My brother White gave -- asked the question involving hypothetical case of voluntary contribution, truly voluntary contributions by labor union members to the union and ear-marked for further contributions to political cause of the candidates and those would be union funds but they would not be regular union funds, are you trying to carve up that case without adjective?
Mr. Wallace: Well, we felt that need not in this case take on that case and we are not arguing in this case that the union could never be the conduit for if you want to call them voluntary contributions that are made through a truly voluntary association.
I mean much of the difficulty in the discussion here and in the argument is because the word voluntary is such an imprecise word.
We mentioned this in our brief.
There is a great difference between consenting, doing what you are told to do without protest.
That kind of voluntariness and what we think Congress was trying to assure would be the freedom of choice that individuals would have in choosing to associate together politically and make contributions to political campaign which would be more element of their own free deliberate choice that this is what they desire to do rather than merely the kind of consent that we think the evidence in this case pointed to in a repeated testimony of many individuals that their contributions were voluntary.
Unknown Speaker: Well Mr. Wallace in that respect, what about the request to instruct that the jury could not convict unless the contributions were involuntary?
That was refused was it not?
Mr. Wallace: Well, that was refused.
I think it was properly refused considering the way the term voluntary had been used throughout that file.
Unknown Speaker: You mean the statute would permit conviction even though the contributions were voluntary?
Mr. Wallace: Under the statute, mere consent of the kind involved here that the use of the word “voluntary” implied throughout this trial is not a defense to be used by a corporation of its monies for political campaigns in the use by union of its money.
Justice William J. Brennan: I take it then you are willing to defend the instructions as given here and not rely on the failure to object to the instructions to the trial?
Mr. Wallace: Do you think the instructions were entirely proper?
We also think that the Court of Appeals acted properly in holding that a deliberate choice had been made on appeal not to preserve objections of the instructions and that it was within the priority of the Court of Appeals to refuse to pass on that issue?
Justice William J. Brennan: And you rely on that down here?
Mr. Wallace: Well, I believe that this Court sitting as a Court, should uphold the Court of Appeals judgment on that but we also stand out in the instructions.
We think that there was nothing wrong with these instructions in the context of this case and whether defending on both grounds Mr. Justice Brennan.
Justice Thurgood Marshall: Mr. Wallace, upon this very Union, with all the force that you can imagine, what each one of its members insisted that they contributed to the democratic party of St. Louis would violate the statute, will it or would it not?
Mr. Wallace: Now this statute is about contributions by the union of the union funds that that is what Congress sought to reach here.
Well, that is why I was trying to get to that?
Just where does the union contribute to funds here?
Mr. Wallace: Well that we believe was the question put to the jury.
As with any statute of this type, the question is whether the fact show what the statute makes unlawful happen here and --
Chief Justice Warren E. Burger: Like how many employees contributed to the fund in all?
I think these are not too clear to me I see a figure 2063 and another thing you have 2064 but was it some such number as that?
Mr. Wallace: I do not see that the record really establishes exactly how many contributed to the fund.
There are indications in the record that the parties were acting as if the great majority practically all of them contributed to the fund.
Chief Justice Warren E. Burger: Let me put these questions here that I put to Mr. Shenker.
I read this record on the opinion on the Court of Appeals and the instruction of the Trial Judge to see a case in which the government was alleging that this committee was just upfront that was in the same building on the same floor.
It was run by the officers of the union and that they call the contributions among themselves assessments and that that with a lot of other bits and pieces of facts added up the proposition that this committee really was in fact the union even though in name it had another name now.
Is that the theory that the government is standing on?
Mr. Wallace: That was the theory of our case throughout.
I think it was set forth very clearly in the indictment.
It is on page 14 of the appendix paragraph 10 of the indictment presents the case under that theory.
Chief Justice Warren E. Burger: Because if you can --
Mr. Wallace: This was the device being used by the union to make contributions of the union funds to political campaign.
Chief Justice Warren E. Burger: If this verdict cannot be read as a verdict by the jury that this committee was a front for the union and was in fact the union, the conviction could not stand, did it?
Mr. Wallace: I do not believe so.
That is exactly the issue that was put to the jury.
We have reproduced the pertinent portion of the instructions to the jury in our brief and if Your Honors want to turn to page 17 of our brief, the paragraph in the middle of that page put that precise issue to the jury.
It seems to me that that is what the jury was asked to decide and if you do not mind, I will just very quickly read through that paragraph.
In this case the evidence was offered by the government to the effect that funds were contributed to or on behalf of candidates for federal office and that such funds were paid out upon checks drawn upon Pipefitters Fund, I will call it.
It is necessary therefore that the evidence established that the Pipefitters Fund was in fact a union fund that the money there in was union money and that the real contributor to the candidates was the union.
As to this issue, the defendants contend that the fund in question was a bona fide entity separate and apart from the union established by the Voluntary Good Faith Act of members of Pipefitters Local 562 and others from which contributions to candidates were made on behalf of the persons who created the fund and not on behalf of the union.
On the other hand, the government contend that the fund was a mere artificer device set up by the defendants and others as a part of the alleged conspiracy to give the outward appearance of being an independent and separate entity but in fact constituting a part of union funds.
And much should be --
Justice Thurgood Marshall: Mr. Wallace, is there any bigger instruction explaining that?
Mr. Wallace: Not explaining that one, with that 19 factors listed which the jury should take into account in answering the question.
But the question is put; I think most succinctly in this paragraph and much of the argument in the briefs on the other side and in the oral argument on the other side seems to be based on the premise that the jury decided this issue of fact in favor of the defendants.
But of course, the verdict indicates that the factual issue was decided in support of the government’s theory of the case, that the fund was an artificer device through which the union was making contributions of the union money.
And we think there is ample evidence in the case to support this factual determination by the jury.
I would like to briefly recount some of that evidence to the Court.
In the first place, Local 562 had jurisdiction over all the major jobs in more than half of the State of Missouri and contractors in this area had to get their Pipefitters for major jobs from Local 562 during this period even though there were three other locals located in the area whose members regularly worked on jobs under 562’s jurisdiction.
Those jobs paid more than the jobs under the jurisdiction of the other local and the principle operating revenues of this local came from assessments imposed as fixed sums per day worked on each member of this local or each out of town.
They are working under the local’s jurisdiction in the pre-indictment period and smaller monthly dues were paid by the members which were passed through the international and large part.
The fund involved here, the Pipefitters fund was began in 1949 and at first, the assessments for the fund and for the union dues were made to gather and exactly the same way and applied and exactly the same way to both the members of the local and the out-of-towner.
The first 25 cents per day was paid by each man as a union assessment and 25 cents per day to the fund.
Later it was 50 cents per day to each and starting in January 1963, which is the indictment period, the Local stopped collecting assessments from the non-members but a pattern was established whereby each of these non-members would contribute to the fund at the same rate as the total of the daily contribution of a member of the Local to the fund and added to his assessment to the union.
And these were still being treated for all practical purposes collected in a manner that they have previously been collected as assessments.
Chief Justice Warren E. Burger: Was there any evidence of coercion or reprisal against employees who did not contribute?
Mr. Wallace: Well, there was evidence that they did not question about the contribution with an obligation that they had to the union.
There were some individual testimony that after failing to contribute, the man was not hired after that week again.
Chief Justice Warren E. Burger: These were the out-of-towners?
Mr. Wallace: These were out-of-towners.
But we do not rely on that testimony alone because most of the evidence, it seems to us indicates that both the union leadership and the members and the out-of-towners considered this just part of their regular obligations to the union that would be regularly paid and indeed were regularly paid.
And at one point, the union’s executive board conveyed this impression of the membership quite clearly.
This is recounted at page 11 of our brief.
In the middle of page 11, at the time that there was a 50 cent increase in the assessment, the daily assessment of union members.
The Executive Board minutes distributed to the members explicitly tied this to a 50 cent decrease in the contributions of the fund that would then be expected of the members of the Local.
And the quotation from the minutes distributed to the members was we believe when the details are explained to all of you.
All will agree as we do on this matter because this will not be one extra penny cost to members of Local Union 562.
The whole assumption is that every member pays the prescribed contribution to the fund. And therefore because the union treasury needed more money and adjustment would be made, 50 cents more to the treasury, 50 cents less to the fund for internal bookkeeping purposes.
It would not affect the financial obligations of the members at all.
Unknown Speaker: The difficulty is of course or one of the many difficulties in this case is that the jury -- the members of the jury were instructed that they could return a verdict to guilty in this case even if they found that every contribution to the fund was voluntary.
Now that is correct, is it not?
Mr. Wallace: That is correct.
But that instruction was given in the context of the entire instruction here --
Unknown Speaker: You are asking us to second guess the jury and if they will they could have not done that that reasonable man must have found all the contributions were involuntary and that is what you are asking us to do in this face of your argument?
Mr. Wallace: Well, what we are really saying is that the basic question put to the jury was were this really union monies that have been collected in the manner that union monies are collected or paid in as union monies?
Unknown Speaker: Well, if the union was just a conduit for voluntary contribution, I gather that you implicitly handed at least at the outset of your argument that those might not be regular union fund?
So if these were all voluntary --
Mr. Wallace: We think that is not the case.
Unknown Speaker: All are voluntary contributions and even then though this was simply an alter ego of the union, if they were all voluntary contributions made for political purposes by the contributors?
Mr. Wallace: Well, now that is -- you see that is where I stopped.
Unknown Speaker: No, but the jury --
Mr. Wallace: If the contribution was not made for political purposes, the instructions were even if these were voluntary contributions if they were union monies, they were being used illegally under the statute.
Unknown Speaker: Regular union monies.
Mr. Wallace: That is right.
And not political money, not funds that were voluntarily being contributed for the purpose of supporting political causes but assessments that were being made as part of their obligations to the union.
What Congress was concerned about was that the economic power of the organization would be brought to bear to get money with people who are really giving for other reasons.
And use that money -- and that money would be used by the organization for political purposes.
The issue put to the jury was, was this really money being given by these individuals to the union for union purposes because they wanted to support the union or thought that they were obligated to support the union even though they were voluntarily doing it in the sense they consented to make the payments that were asked of them.
Nonetheless, the question of the jury decided was that these union monies were not separate monies for a political purposes that were intended to --
Unknown Speaker: Well, we know, we may have -- the jury may have decided that every single one of these contributions of the voluntary contribution under the instructions.
Mr. Wallace: Voluntary.
Justice, the assessments are voluntarily paid when you are asked to pay your union assessment, you pay it.
Unknown Speaker: The difficulty as you rightly pointed out in your brief is that the adverb voluntary is a difficult one to define and no attempt was made to define that at the trial of this case, is that not correct?
Mr. Wallace: That is right.
But it was used over and over again in the testimony by people who said that they paid what they were asked to voluntarily.
And this portion of the instructions starts off a great deal of evidence has been introduced and whether the payments were voluntary and this is relevant but not the total answer of the question the judge said.
Unknown Speaker: Well I suppose, it is not even consistent for somebody to give something to a union for political purposes and also be able to say that after it is given, the money is union money.
I mean it belongs to union.
They just are going to use it for political purposes, is that not true?
Now, you say it is inconceivable under these instructions that the jury could have found that there were -- that these monies were union monies even though voluntarily given for political purpose?
Mr. Wallace: I think the instruction was clear on that.
I see the whole trial is based on the question of whether this was a bona fide political fund where people were making contributions for political purposes.
Or whether, they were really paying obligations that they thought they had to pay to the union because of the union’s economic power.
This was the whole theory of the case and much of the testimony looked in this direction.
I would like if may to refer Your Honors to the testimony of one man who was an out-of-towner working in this jurisdiction which is in Volume 2 of the record on page 757.
The cross-examination begins, sir, your testimony is that you got from $30.00 to $40.00 more per week when you are working on a St. Louis job?
Answer: Yes, approximately.
The question is, that is why you are willing to pay this $10.00 a week into the fund?
And then after some intervening questioning on page 759, the witness says it is to my interest to pay the voluntary donation because the wages are better under the St. Louis scale than they are in the case of Gerardo’s scale.
Question: Yes sir and it is a good deal for you to pay $10.00 a week in order to get $30.00 to $40.00 more pay a week out of that job?
The answer, yes.
That is the type of deal that you are saying is better for you?
And then the question and except for that you would not be voluntarily paying anything would you?
Now, in the context of a trial in which voluntary payments was used in that manner that this instruction was made and I think if you read it as part of the entire instruction, the theory of the case follows through from the indictment right through the instructions and it seems to us implements this longstanding congressional purpose.
Justice Thurgood Marshall: Mr. Wallace, nothing in the record has said that this money was used for “union purposes?”
Mr. Wallace: The record does indicate that strike benefits were paid and that the money was also used to purchase this retirement or recreation center.
It was also a time when the gift fund for petitioner Callanan was now deceased, was substituted for the political fund.
Justice Thurgood Marshall: At which time, as I understand is called mingled with the regular union fund, when they made those payments.
Mr. Wallace: The payments?
Unknown Speaker: Well, anyway Mr. Wallace --
Mr. Wallace: All we have is a record and accountant’s record of disbursement from the fund, there is not much in the way of indication of how the funds were handled.
Unknown Speaker: Well, in any event that -- and (Inaudible) that even though payments were made with political purpose or political purposes or union purposes, not the individual contributors?
Mr. Wallace: Disbursements from the fund?
Unknown Speaker: The $100,000.00 whatever it was in one instance $50,000.00?
That those were paid for union purposes to serve union end not to serve the individuals whose contributions made up the fund?
Mr. Wallace: But what the jury decided was that those were payments really made by the Union and that is what the statute prevails.
Unknown Speaker: One had to rely on pension on that strike benefit and all that if you rush?
Mr. Wallace: Well, it is just an indication that the leadership of the union treated this money as available to them not merely for political expenditures but for any union purposes.
Unknown Speaker: Including political expenditures?
Mr. Wallace: Including political expenditures.
Unknown Speaker: Mr. Wallace, how often (Inaudible) as a matter of fact, that follows through with the contributions to a union and still not have the union merely as a conduit for those things, if the union itself (Inaudible)
Mr. Wallace: Quite so, Your Honor.
I did not mean to say that the statute would permit the Union to make political contributions in a situation where voluntary contributions were being made to the union.
I do think --
Unknown Speaker: Even though they were voluntarily made for political purposes?
Mr. Wallace: Even though they were voluntarily made for political purposes.
It will be a different case from this one and I think a more difficult case.
Well, we believe that in light of the instructions given and the testimony before the verdict here, properly applied the statute to these facts.
It was a complicated factor determination that that does not mean that the statute is unconstitutionally vague.
It was the kind of actual determination that often has to be made in cases under the Sherman Act or in Criminal Fraud cases involving complex business transactions where factual judgment has to be made as to the substance of the transaction that was placed before the jury.
Your Honor, in light of the purposes, Congress had in mind, does the statute reach too broadly here, because I think the evidence in this case shows quite persuasively, that it was a reasonable judgment for Congress to make that no lesser measure would adequately protect individual members from having the economic power of these organizations brought to bear upon them in ways that would cause their funds to exactly to support political causes when their preference might really be not to support those cause or any cause.
Chief Justice Warren E. Burger: Thank you Mr. Wallace.
Mr. Shenker you have one minute left.
Rebuttal of Morris A. Shenker
Mr. Morris A. Shenker: One minute.
Mr. Chief Justice and may it please the Court.
Just two things.
One, there was no co-mingling of funds and two, that the political fund was given, the name of it was -- the full name was Political, Educational, Legislative, Charity and Defense Fund.
And there was not co-mingling.
I invite you to please which I knew you will read the instructions particularly those that are given in our brief from page 72 and 73 where we specifically asked the instructions which would have fitted in in line with the position that they have taken -- the Government has taken now.
I want to call the Court’s attention that the Government did not take this position at the trial and they would not -- did not take the position that they did not question that a union has a right to establish a political organization for the purpose of receiving ear-marked political monies directly for voluntary contributions.
Chief Justice Warren E. Burger: Mr. Shenker, what was the legislative purpose of this fund?
What were they going to do with the money for legislative purposes?
Mr. Morris A. Shenker: Well, that was such a thing.
I think that they would be authorized to hire a person to attend the sessions of the legislature and to keep advised on the manner on which the legislature of Missouri as well as in other states where in their people may be doing work with that.
They would --
Chief Justice Warren E. Burger: But laws related unions?
Mr. Morris A. Shenker: Laws related -- Relating to all matters.
In other words, they contributed substantial amount in excess, I believe during that period -- in excess of a $100,000.00 to charity during that period and kind of --
Chief Justice Warren E. Burger: What kind of things?
Mr. Morris A. Shenker: One of the things that contribute to the United Funds for instance as I recall I do not remember all the charities that contributed to various hospitals as I recall, I do not know if it was on the same years that contributed substantial sums to the (Inaudible) Foundation.
They contributed money --
Chief Justice Warren E. Burger: Some of it went to retired members of the union?
Mr. Morris A. Shenker: No, no, these which I mentioned did not.
All these charities which I mentioned have nothing to do with the union.
Chief Justice Warren E. Burger: Not from the charity fund but from the fund generally was it?
Mr. Morris A. Shenker: No, that was only one instance as I recall wherein there was a certain contribution made towards helping, some of the retirees and that was, I do not recall now but it was $10,000.00 out of some practically million dollars.
There was no co-mingling of funds at all.
Chief Justice Warren E. Burger: Going back to this legislative fund, were they interested in supporting a legislation that affected the union or was it an activity like the League of Women’s Voters that is for everybody’s benefit?
Mr. Morris A. Shenker: I would say that it was for everybody’s benefit but naturally they were laboring people and undoubtedly they were interested in liberal legislation, legislation which would be good not necessarily for their union but for labor generally.
They were constantly supporting liberal candidates, candidates with liberal backgrounds and the same thing on legislation.
Chief Justice Warren E. Burger: Thank you Mr. Shenker.
Thank you Mr. Wallace.
The case is submitted.