United States v. Hankin, Perch, Perch P. Hankin , 607 F.2d 611 ( 1979 )

OPINION OF THE COURT

ROSENN, Circuit Judge.

This is an appeal by the defendant, Perch Hankin, from a judgment of the District Court for the Middle District of Pennsylvania finding him guilty of violating the Federal Election Campaign Act, 18 U.S.C. § 614 (1970 Supp. V).¹ The statute provided in pertinent part:

(a) No person shall make a contribution [to a candidate for federal office] in the name of another person .

(b) Any person who violates this section shall be fined not more than $25,000 or imprisoned not more than one year or both.

The defendant appeals principally on the grounds that the district court improperly applied a scienter standard and that the statute of limitations barred the prosecution.² Because we find that the Government has not met its burden of proof with respect to prosecution within the applicable three year statute of limitations, we reverse.

I.

In February 1976 Hankin approached two of his friends, Harry Hilger and Dante Iacampo, and requested that they and their wives contribute $250 each to the Shapp for President Committee. (In order to qualify for federal matching funds the Shapp campaign had to raise $5,000 in twenty states in individual contributions that did not exceed $250.) Both Hilger and Iacampo complied with Hankin’s request by writing two $250 checks each to the Shapp Committee. The four checks were dated February 4, 1976.

Hankin gave Hilger $500 on the day he requested the two $250 contributions. He gave Iacampo $500 a few days thereafter. The Government concedes that Hankin’s last contact with the conduit contributors was probably before February 9,1976. It is not clear precisely what day the Shapp Committee received the checks. Hilger testified that he mailed his two checks within a day or two of February 4 to “some address that had been supplied to [him].” Iacampo did not testify as to when or where he sent the contributions. The checks were deposited by the Committee on February 10, 1976. Some testimony indicated the checks may have been received by the Committee on the date of deposit. Other testimony indicated the checks may have been received by a Committee fundraiser prior to the date of deposit and forwarded to the Committee by February 10.

On February 9, 1979, a four count information was filed against Hankin, charging him with illegally making four campaign contributions in the names of Dante and Mary Iacampo and Harry and Lois Hilger. On May 9,1979, a jury convicted Hankin on all four counts.

II.

The statute of limitations under the Federal Election Campaign Act is three years. 2 U.S.C. § 455 (1976). The Government has the burden of proof that the prosecution was instituted within the applicable statute of limitations. See, e. g., Grunewald v. United States, 353 U.S. 391, 396, 77 S.Ct. 963, 1 L.Ed.2d 931 (1957); United States v. Wolf, 405 F.Supp. 731 (E.D.Mo.1975), aff’d 535 F.2d 476 (8th Cir.), cert. denied, 429 U.S. 920, 97 S.Ct. 315, 50 L.Ed.2d 287 (1976). Because the Information was filed on February 9, 1979, the Government has the burden of proving that Hankin’s criminal acts occurred after February 9, 1976.

III.

This brings us to the key issue in this case, whether or not Hankin’s criminal actions took place after February 9, 1976. The Supreme Court has held that statutes of limitations normally begin to run when the crime is complete. Toussie v. United States, 397 U.S. 112, 115, 90 S.Ct. 858, 25 L.Ed.2d 156 (1970). The Government contends that Hankin’s criminal act was not complete until February 10, 1976, when the Shapp Committee deposited the four $250 checks. Hankin’s position is that the crime was complete before February 9, 1976, when the checks were mailed.

18 U.S.C. § 614 (1970 Supp. V) provides that it is a crime to “make a contribution” to a candidate for federal office “in the name of another person.” The Government, under the rationale of United States v. Chestnut, 533 F.2d 40 (2d Cir. 1976), claims the contribution was not made by Hankin until the checks were deposited by the Shapp Campaign Committee. In Chestnut the defendant was convicted of causing another to accept and receive an illegal corporate campaign contribution in violation of 18 U.S.C. §§ 610 and 2. The defendant argued that venue was improper in the Southern District of New York because the offense, if any, consisted of causing the unlawful contribution in Minnesota rather than causing the receipt of the checks in New York. The court said “the substantive offense ... is the receiving and accepting of an unlawful contribution” and concluded that venue was proper where the checks were deposited. 533 F.2d at 47.

The Government’s reliance on Chestnut is misplaced. In Chestnut the crime was in causing another to accept and receive an illegal contribution. In this case the crime charged under section 614 of the Election Campaign Act is to “make a contribution in the name of another person.” (Emphasis supplied.) It does not follow that because the crime of receiving and accepting contributions includes the act of depositing checks, the act of making contributions necessarily includes the same element. To the contrary, the existence of a separate crime for receiving and accepting illegal contributions and a different crime for making illegal contributions may indicate that Congress intended separate definitions for each crime.³ In any event, the court’s holding in Chestnut is not dispositive.

In reaching its decision in Chestnut, the Second Circuit articulated a test which is helpful in discerning the meaning of 18 U.S.C. § 614. The court said:

In determining proper venue then, the district court must ascertain both the nature of the offense and the location of the acts constituting it. [Citations omitted.] One helpful technique has been to study the key verbs which define the criminal offense in the statute. [Emphasis supplied.] 533 F.2d at 46-47.

The key verb in 18 U.S.C. § 614 is “make.” Thus, the issue is whether making a contribution occurs at the time of deposit of the checks or at some time before.

In Clark v. Commissioner of Internal Revenue, 253 F.2d 745 (3d Cir. 1958), this court dealt with the analogous question of whether a business expense was made for tax purposes if the checks remained outstanding. The court said:

As a general proposition delivery of a check will establish the same right to a deduction as would delivery of cash. It does not matter that the check was not cashed or deposited or the drawer's account charged until the following year. 253 F.2d at 748.

Similarly, in Flint v. United States, 237 F.Supp. 551 (D.Idaho 1964), the court dealt with the issue of when a payment of taxes was made. Relying primarily on this court’s holding in Clark, the court concluded the taxes were paid upon delivery of the check and not deposit in the bank. See also Estate of Witt v. Fahs, 160 F.Supp. 521, 523 (S.D.Fla.1956).

Cases from other areas of the law also indicate that payment is made prior to the time of deposit of the check. See e. g., Wayzata Enterprises, Inc. v. Herman, 268 Minn. 117, 128 N.W.2d 156 (1964) (payment on real estate contract is deemed to be made as of delivery of check when check is subsequently paid in due course); Ogier v. Pacific Oil and Gas Development Corp., 135 Cal.App.2d 776, 288 P.2d 101 (1955) (payment for securities was made as of delivery of check when check is subsequently paid in due course); Fletcher v. Ray, 220 Ark. 844, 250 S.W.2d 734 (1952) (candidate’s election fee is paid as of delivery of check when check is subsequently paid in due course); Finn v. National City Bank of New York, 36 N.Y.S.2d 545 (N.Y. County 1942) (mailing of check by bank constitutes delivery so as to prevent attachment of debt in New York prior to presentment); Texas Mutual Life Insurance Association v. Tolbert, 134 Tex. 419, 136 S.W.2d 584 (1940) (insurance premium is paid as of delivery of check when check is subsequently paid in due course); Franciscan Hotel Co. v. Albuquerque Hotel Co., 37 N.M. 456, 24 P.2d 718 (1933) (payment of taxes was made as of delivery of check).

In its definitions under the Federal Election Campaign Act, Congress may have indicated that the act of making a contribution does not require a deposit of the checks. This conclusion is reached from 2 U.S.C. § 431(e)(2) (1976) which gives one of several definitions of a contribution as “a written contract, promise or agreement, whether or not legally enforceable, to make a contribution . . . .”⁴ The use by Congress of the language “whether or not legally enforceable” along with “make a contribution” implies that the act of making the contribution is concluded regardless of the enforceability or revocability of the contribution.

The Government argues that Hankin did not make his contribution until the checks were deposited because the Committee could have rejected the gift. This argument fails for three reasons. First, in section 431(e)(2) Congress said the act of making the contribution does not require legal enforceability. The act of making the contribution was complete whether or not the Committee decided to deposit the checks. Second, the Committee could have rejected the contribution well after the date of deposit by returning another check. The date of deposit is merely an arbitrary date at which the Government contends the contribution was irrevocable. We believe the contribution was no more irrevocable on the date of deposit than on the date of mailing, the date of receipt, or two weeks after the date of deposit. Third, there is no evidence in the record to indicate that the person depositing the contributions had any authority to reject them.⁵

The Supreme Court in Toussie v. United States, 397 U.S. 112, 114-15, 90 S.Ct. 858, 860, 25 L.Ed.2d 156 (1970), set out several considerations which help us determine when the statute of limitations began to run in this case.

The purpose of a statute of limitations is to limit exposure to criminal prosecution to a certain fixed period of time following the occurrence of those acts the legislature has decided to punish by criminal sanctions. Such a limitation is designed to protect individuals from having to defend themselves against charges when the basic facts may have become obscured by the passage of time and to minimize the danger of official punishment because of acts in the far-distant past. Such a time limit may also have the salutary effect of encouraging law enforcement officials promptly to investigate suspected criminal activity. For these reasons and others, we have stated before “the principle that criminal limitations statutes are ‘to be liberally interpreted in favor of repose,’ United States v. Scharton, 285 U.S. 518, 522 [52 S.Ct. 416, 417, 76 L.Ed. 917] (1932).”

The purpose of 18 U.S.C. § 614 is to punish the making of illegal contributions. As pointed out earlier, another provision punishes the receipt of illegal contributions. The criminal act of making the illegal contribution is complete before the deposit of the checks. It would run counter to the purposes of the statute of limitations to permit the Shapp Committee to determine the temporal limits of Hankin’s prosecution based on when the Committee decided to deposit the checks. Such a result would afford the defendant no protection against possible prosecution long after his criminal acts are completed.

We hold that the statute of limitations began to run when the contributions were made which, in this instance, was prior to the day of the Committee’s deposit. It is unnecessary for us to decide whether the crime was completed on the date of mailing or on the date of receipt by the Committee because the only act which the Government proved occurred after February 9,1976, was the deposit of the checks. The Government contends in its brief that the checks were received on February 10, 1976, by the Committee. Its only evidence on this contention is that it was the practice of the Committee to deposit checks on the date of receipt. As we read the record, it is not at all clear that the checks were received by the Committee on February 10. The Assistant Treasurer of the Shapp Committee testified on cross examination that the four checks may have been delivered to a Committee fundraiser prior to February 9. She had no recollection of the exact date the checks were received. Given the fact that the checks were drafted on February 4 and there was evidence of mailing promptly thereafter, we find it difficult to accept the Government’s contention that the checks were received by the Committee on February 10, the day of deposit. Therefore, even if the statute of limitations began to run on the date of receipt, the Government has failed to meet its burden by proving receipt after February 9, 1976.

The statute “is to be liberally interpreted in favor of the accused.” Waters v. United States, 328 F.2d 739, 742 (10th Cir. 1964). As the late Judge Fahy said in Askins v. United States, 102 U.S.App.D.C. 198, 201, 251 F.2d 909, 912 (1958), “society is likely to be healthier on the whole if an individual suspected of a noncapital offense is either charged within a specified time . or else is relieved of the never-ending possibility of public accountability for an accusation arising out of the long ago.” The remedy for failure to bring an action within the statute of limitations is a bar to the right of prosecution. Waters v. United States, supra, 328 F.2d at 743; Benes v. United States, 276 F.2d 99, 108-09 (6th Cir. 1960); Chaifetz v. United States, 109 U.S.App.D.C. 349, 351-52, 288 F.2d 133, 135-36 (D.C. Cir. 1960), rev’d on other grounds 366 U.S. 209, 81 S.Ct. 1051, 6 L.Ed.2d 233 (1961).

Accordingly, the judgment of the district court will be reversed and the cause remanded with directions to vacate the judgment and dismiss the information.

1 . 18 U.S.C. § 614 (1970 Supp. V) was repealed and reenacted in amended form effective May 11, 1976, subject to a savings provision, Pub.L. 94-283, § 114 (May 11, 1976). The savings provision maintained the vitality of the repealed act until the effective date of the recodification, 2 U.S.C. § 441f (1976).

2 . Defendant also raises the issues of improper venue and the overbreadth of 18 U.S.C. § 614. In light of our conclusion that the statute of limitations bars this prosecution we find it unnecessary to reach these claims and the scienter issue.

3 . 18 U.S.C. § 614(a) (1970 Supp. V) had separate clauses to prohibit the making and accepting of contributions in the name of another. It read:

§ 614. Prohibition of contributions in name of another

(a) No person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person.

4 . At the time that 18 U.S.C. § 614 (1970 Supp. V) was in effect, 2 U.S.C. § 431(e)(2) (Supp. V 1975) said “a contract, promise, or agreement, express or implied, whether or not legally enforceable, to make a contribution . ." This slight variation is not relevant to our analysis of the provision.

5 . The Assistant Treasurer of the Shapp Committee testified that she could reject contributions if they were facially defective, such as a gift from a corporation. However, she did not testify that she had the right to accept or reject checks on a personal checking account.