United States v. Biaggi

909 F.2d 662 (2d Cir. 1990)

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Nature of the Case

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Facts

In 1975 Wedtech was accepted into the Small Business Administration's 'Section 8(a)' program, under which minority-owned businesses are eligible for government contracts without competitive bidding. See 15 U.S.C. § 637(a) (1988). Mariotta (D), the president is of Puerto Rican descent. Mario Biaggi (D), then a Congressman from the Bronx, met Mariotta and Fred Neuberger, a co-owner of Wedtech. Biaggi was at that time a partner in a small law firm, known as Biaggi & Ehrlich. His law partner was defendant Bernard Ehrlich. Wedtech retained Biaggi & Ehrlich, initially at an annual retainer of $20,000. The retainer was subsequently increased in stages to $150,000. Biaggi withdrew as a member of the law firm in 1979 after the House of Representatives adopted Rule XLVII, which limited the outside income of members of the House to 30 percent of their salaries. The law firm bought his partnership interest for $320,000 to be paid over a ten-year period. Biaggi remained in an 'of counsel' relationship to the firm. Biaggi's son, defendant Richard Biaggi, became a partner in the firm in 1983. Among the benefits achieved for Wedtech by its lobbyists and lawyers were the awards of a $ 27 million contract in 1982 to make small engines for the Army and a $ 24 million contract in 1984 to make pontoons (raft-like structures carried on ships to aid in unloading) for the Navy. Wedtech ultimately filed for bankruptcy at the end of 1986. Eventually, Ds (6 parties) were brought to trial for various crimes. During the trial, Mariotta sought to prove that P had offered him immunity if he would give what P regarded as truthful information regarding wrongdoing by other Wedtech officers and various public officials and that Mariotta, in response to this offer, denied knowledge of any such wrongdoing, thereby 'rejecting' immunity. The Government did not dispute that it made the offer. Marriotta was prevented from introducing this evidence. Mariotta argued to the District Court that his denial of knowledge of others' wrongdoing, expressed to the Government at a time when admitting such knowledge would have secured him immunity from prosecution, is powerful evidence of 'consciousness of innocence,' tending to preclude a finding that he had such knowledge. Marriotta was convicted and appealed.