Opinion · District Court, S.D. California
United States v. Furer
47 F. Supp. 402
- Type
- Opinion
- Court
- District Court, S.D. California
- Jurisdiction
- California
- Date
- 1942-10-10
- Topic
- general
YANKWICH, District Judge (after stating the facts as above). The demurrers of the defendants to the indictment are overruled. The indictment charges conspiracy to defraud the United States and to commit an offense against the United States. The alleged object of the conspiracy is to secure a contract from Lockheed-Vega Corporations for the making of tools and parts of military airplanes by bribery or giving a commission or percentage of the gross revenues to diverse persons employed by the named corporations. Through the arrangement, set forth in the indictment, for the construction of airplanes on a “fixed fee” or “cost-plus fee contract”, the airplane corporations became the agents of the United States in letting the contracts (or subcontracts) for parts.
Citator
UpLaw has not yet analyzed United States v. Furer. The absence of a flag is not a finding that it is good law.
- Cited by
- 6 opinions
UNITED STATES v. FURER, (S.D.Cal. 1942)
47 F. Supp. 402
UNITED STATES v. FURER et al.
No. 15609.
United States District Court, S.D. California,
Central Division
October 10, 1942.
Demurrers overruled and cause returned to criminal calendar department for further proceedings.
The indictment against the defendants reads:
"The Grand Jurors of the United States of America, being duly impaneled, sworn, and charged in the District Court of the United States for the Southern District of California, Central Division, at the FebruaryWest Page 4031942 Term of said Court, and inquiring for said district, do upon their oaths find and present as follows:
"1. That at all times during the period hereinafter mentioned, Edward Furer, doing business under the firm name and style of Acme Tool Manufacturing Company, was engaged in the doing of machine work, tool and die work, and the production and designing of tools, dies, jigs, and airplane parts, in the city of Burbank, California.
"2. That at all times during the period hereinafter mentioned Lockheed Aircraft Corporation and its wholly owned subsidiary, Vega Aircraft Corporation, and that corporation's predecessor, Vega Airplane Company, a corporation, were engaged in the manufacture and production of military airplanes for the United States of America and/or the parts thereof, in the city of Burbank, California.
"3. That at all times during the period hereinafter mentioned said military airplanes and the parts thereof have been constructed by the Lockheed and/or Vega airplane companies under various so-called `fixed fee' and `cost plus fixed fee' contracts entered into by and between the United States of America and said corporations pursuant to and under the authority of Public Act No. 671 of the 76th Congress, approved June 28, 1940,54 Stat. 676, entitled `An act to expedite national defense, and for other purposes,' and Public Act No. 703 of the 76th Congress approved July 2, 1940,54 Stat. 712, and entitled `An act to expedite the strengthening of the national Defense,' such contracts providing in the `fixed fee' contracts that the United States Government is to pay to the contracting corporations a fixed sum for a fixed number of military airplanes, and providing in the `cost plus a fixed fee' contracts that the United States Government shall pay the contracting corporation the complete costs incurred by the corporation in constructing a fixed number of military airplanes and, in addition, pay a fixed sum of money at profit to the contracting corporation.
"4. The said above mentioned `fixed fee' contracts were negotiated by and between Lockheed and/or Vega Aircraft Corporations and the United States of America, in the following manner: Said military airplanes were ordered in units consisting of a specified number of planes, the fixed price to be paid for each such specified number of planes being computed on the basis of the cost of production of the previous specified group or unit of a similar or like character, plus a percentage of this estimated cost, which percentage is to be the profit of the contracting corporation. It is further provided that at the completion of the contract a computation will be made of the profit actually made by the contracting corporation and, in the event that this actual profit exceeds a fixed percentage of the cost, there shall be a refund of such excess profits to the United States Government.
"5. In the performance of said contracts and in accordance with their intent and purpose the Lockheed and/or Vega Aircraft Corporations purchased materials, tools, dies, jigs, etc., from various manufacturers of such articles for use in the manufacture and fabrication of such above mentioned military airplanes for the United States of America.
"6. And the Grand Jurors aforesaid, upon their oaths aforesaid, do further present and indict that Edward Furer, K.O. Anderson, and David Bushnell, defendants herein, did, from on or about the first day of June 1940, and continuously thereafter until on or about the twenty-fourth day of April 1942 at Burbank, California, and at other places in the State in the Southern District of California, Central Division, and within the jurisdiction of this Court, knowingly, wilfully, unlawfully, and feloniously conspire, combine, confederate, and agree together, and with one another, and with divers other persons to your Grand Jurors unknown, to defraud the United States and to commit an offense against the United States; that is to say, to procure contracts from Lockheed and Vega Aircraft Corporations for Edward Furer, doing business as Acme Tool Manufacturing Company, to make or design tools, dies, jigs, and production parts for said above-mentioned corporations, said tools, dies, jigs, and parts to be used in making the above-mentioned military airplanes for the United States, said contracts to be procured by bribing or giving a commission or percentage of the gross revenues to divers persons employed by said above-mentioned corporations.
"7. That said conspiracy was to be executed, carried out, and continued in existence substantially in the following manner:
"Edward Furer was to contract with K.O. Anderson to pay to said K.O. AndersonWest Page 404a percentage of the gross business done by him with said above-mentioned corporations and said K.O. Anderson was to assign one-half, fifty percent, of his interest in said business between Edward Furer and said above-mentioned corporations to David Bushnell, Chief Production and Tool Design Engineer, for Lockheed Aircraft Corporation, and that David Bushnell and other persons to the Grand Jurors unknown were to induce, persuade, or influence said above-mentioned corporations to place orders for constructing or designing tools, dies, jigs, or production parts for use on planes destined for the United States Government with said above-mentioned Edward Furer.
"8. Pursuant to and in accordance with the conspiracy outlined above, said David Bushnell, in his capacity as Chief Tool Design and Production Engineer for the Lockheed Aircraft Corporation, induced, influenced, and caused said Lockheed Aircraft Corporation to place orders for constructing and/or designing tools, dies, jigs, and machine parts with the above-mentioned Edward Furer.
"That such above-mentioned orders were placed by Lockheed Aircraft Corporation on or about the following dates:
"December 16, 1940 "December 31, 1940 "January 7, 1941 "January 31, 1941 "February 17, 1941 "February 28, 1941 "March 31, 1941 "June 30, 1941 "August 30, 1941 "September 15, 1941 "October 27, 1941 "November 17, 1941 "December 31, 1941 "January 31, 1942
"and by Vega Aircraft Corporation upon the following dates:
"July 30, 1941 "July 31, 1941 "August 26, 1941 "September 23, 1941 "October 27, 1941 "December 30, 1941, and "January 9, 1942
"and at various other dates to your Grand Jurors unknown.
"9. And that as a result of the receipt of the above-mentioned orders from Lockheed and/or Vega Aircraft Corporations, and in accordance with and pursuant to terms and purposes of the aforementioned conspiracy, said Edward Furer paid to defendant K.O. Anderson, and to defendant David Bushnell, an arbitrary and agreed percentage of all monies received by said Edward Furer from the above-mentioned corporations.
"Overt Acts
"And the Grand Jurors aforesaid, upon their oaths aforesaid, do further present and indict that, pursuant to and in furtherance of said unlawful conspiracy, and in order to effectuate the objects thereof, the following overt acts, among others, were committed by the defendants at the times and places hereinafter mentioned:
"(a) On or about June, 1940, in the Southern District of California, Central Division, and within the jurisdiction of this Court, a contract, agreement, or understanding was entered into between Edward Furer and K.O. Anderson whereby said Edward Furer, well knowing all the foregoing facts, agreed to pay to said K.O. Anderson a fixed and arbitrary percentage of the gross revenues of orders received by said Edward Furer from orders or contracts which said Edward Furer might receive from Lockheed and/or Vega Aircraft Corporations.
"(b) On or about June 26, 1940, in the Southern District of California, Central Division, and within the jurisdiction of this Court, a contract, agreement, or understanding was entered into between said K.O. Anderson and the above-mentioned David Bushnell, Chief Production and Tool Design Engineer for the Lockheed Aircraft Corporation, with the knowledge and assent of the defendant, Edward Furer, which provided, among other things, that said K.O. Anderson assign fifty percent of his commissions, mentioned above, to said David Bushnell, and to other persons to your Grand Jurors unknown.
"All of which is contrary to the forms of the statute in such cases made and provided, and particularly Section 88, Title 18, of the U.S.C.A., and against the peace and dignity of the United States of America."
The defendants demurred upon the ground that the indictment did not show an offense against the United States. Specifically, it was argued that the acts which resulted in stifling of competition in the letting of the contracts did not constitute a fraud against the United States unlessWest Page 405it were alleged that the defendants knew that the contracts between the Government and the Air Plane Corporations were on a cost-plus basis. It was argued further that the bribing of an employee of the airplane corporation was not an offense against the United States or a fraud against the United States.
Charles H. Carr, of Los Angeles, Cal., for defendant Edward Furer.
Oliver O. Clark and Robert Smith, both of Los Angeles, Cal., for defendant K.O. Anderson.
L.R. Brigham, of Los Angeles, Cal., and George D. Blair, of North Hollywood, Cal., for defendant David Bushnell.
The indictment charges conspiracy to defraud the United States and to commit an offense against the United States. The alleged object of the conspiracy is to secure a contract from Lockheed-Vega Corporations for the making of tools and parts of military airplanes by bribery or giving a commission or percentage of the gross revenues to diverse persons employed by the named corporations.
Through the arrangement, set forth in the indictment, for the construction of airplanes on a "fixed fee" or "cost-plus fee contract", the airplane corporations became the agents of the United States in letting the contracts (or subcontracts) for parts. The employes of the companies did not become officers of the United States, so as to make the provisions relating to giving and acceptance of a bribe applicable. See Section 91 and 207, Title 18 U.S.C.A. and see Ex parte O'Leary, 7 Cir., 1931,53 F.2d 956.
So that, if we were to assume that the charge is conspiracy to commit the offenses denounced by Sections 91 and 207, Title 18 U.S.C.A., the indictment would have to be held faulty.
However, the act of bribery pleaded charges a conspiracy to defraud the United States. No pecuniary loss to the United States is averred. But this is not necessary. If the object of the conspiracy be to deprive the United States of its rights and privileges or the proper functioning of any agency through which it acts, the offense is complete. See Crawford v. United States, 1909,212 U.S. 183,191,192,29 S.Ct. 260,53 L.Ed. 465, 15 Ann.Cas. 392; Haas v. Henkel, 1910,216 U.S. 462,479,30 S.Ct. 249,54 L.Ed. 569, 17 Ann.Cas. 1112; Hammerschmidt v. United States, 1924,265 U.S. 182,188,44 S. Ct. 511,68 L.Ed. 968; Pan American Petroleum Company v. United States, 1927,273 U.S. 456,500,47 S.Ct. 416,71 L.Ed. 734; Curley v. United States, 1 Cir., 1904,130 F. 1,2; Wallenstein v. United States, 3 Cir., 1928,25 F.2d 708; Falter v. United States, 2 Cir., 1928,23 F.2d 420,421; Langer v. United States, 8 Cir., 1926,76 F.2d 817; United States v. Harding, 1936,65 App.D.C. 161,81 F.2d 563,567.
For, by the bribery of the employes of the corporations, the Government is deprived of open and competitive bidding in the letting of its contracts. And considerations of worth, which should enter into awards of contracts in fulfillment of governmental undertakings, are brought to naught. These detriments flow from the very agreement to offer and accept bribes and commissions in the performance of one's duty to one's employer. And it is not necessary to allege any other facts. Hence the above ruling.
The cause is returned to the Criminal Calendar Department for further proceedings.West Page 435