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Friday, November 26, 2010
Hawaii Anti-Trust Adventures: Rubber hose enforcement
By Selected News Articles @ 5:52 PM :: 5241 Views :: Energy, Environment

by Carl Steinhouse Marco FLA Times 10-26-10

In a jury trial, there’s no such thing as a sure case.

Here I am, still trying cases for the Department of Justice in Hawaii with my mentor, Ray Carlson (another Naples, FLA resident).

Two companies and several individuals were being tried (in early 1960s Honolulu) for price fixing, a felony under the Sherman Antitrust Act. My star witness was an executive in one of the companies on trial — he turned state’s evidence in order to receive immunity from prosecution. He had testified earlier before the grand jury that he personally participated in fixing prices with his competitors, the other company and two individuals on trial. I had the transcript of the grand jury testimony sitting at my elbow as I now prepared to examine this witness at trial. It was like shooting fish in a barrel — I thought.

After some preliminary questioning, I got down to the meat of the examination — his meeting with the other competitor to fix prices. To my utter surprise he denied everything. Though he was my witness the court permitted me to cross-exam him as a “hostile” witness.

“Sir, you have just denied meeting with your competitor to fix prices. I show you your testimony before the grand jury where you stated unequivocally such meetings occurred on a regular basis.” I read his testimony to him and the jurors. “Did you lie before the grand jury?”

“No, I told the truth.”

“Then your present testimony is a lie?”

“No, I’m telling the truth now.”

“Don’t you remember?” the witness whined. “When you were interviewing me prior to the grand jury session, you beat me with a rubber hose and convinced me that your version of events was the truth. I was so fearful, I agreed. My aunt was at the interview and is a witness to your conduct.”

Ray Carlson jumped up and asked permission to examine the witness. The court agreed.

The witness pointed a finger at Mr. Carlson. “You rubber-hosed me also,” he said accusingly.

Whereupon the witness refused to answer any more questions on the grounds of self-incrimination. One of the defense attorneys then popped up. He just happened to know of a Supreme Court case from the 1870s holding that a witness physically intimidated could take the Fifth. I knew that I had been set up by the perjury of this witness and the subornation (encouragement) of perjury by his attorney.

The judge called a recess in the trial and conducted a special hearing as to whether we beat the witness with a rubber hose. I took the stand and explained the events as they actually occurred — namely that he offered his cooperation and begged to testify before the grand jury so that he could get immunity from prosecution. Intimidation, in any form, had nothing to do with it. The next to testify was the witness’ aunt — an 80-year-old woman with flaming red hair who definitely had seen better days, sort of a cross between a prune and the Wicked Witch of the East. Sorry, I shouldn’t be so nasty, but it feels nice in her case. Anyway, I had never seen her before — I’d not forget that face.

This is the good part. To establish her credibility, she offered that she was an undercover agent for the FBI during World War II, running a bawdy house in San Francisco and reporting on what suspected spies said during their visits to her establishment.

“Presently, I continue to do undercover work,” she huffed. “I run a gay bar in Honolulu and report on Commie agents that frequent my place.”

The judge glanced sideways down on her with that “who are you kidding” look, then turned to me. “Mr. Steinhouse, it should be easy for you to test her credibility. Why don’t you ask your brethren at the local FBI office whether she is lying?”

It seemed like a great idea at the time, so I raced over to the FBI office. Later, I reported back to the court, shaking my head.

“Judge, you won’t believe this, but the Special Agent in Charge refuses to comment. He says if the FBI denies those claims that are clearly false and refuses to comment on the others, it will quickly become clear who the real undercover agents are. Your Honor, no amount of pleading, cajoling and groveling would convince him to change his position. ‘FBI policy,’ he explained to me, his tone grave.”

Ultimately, the court held that the witness and his aunt were not credible. The witness was held in contempt.

Throughout this entire drama I feared that someone would discover the one damning, if irrelevant, truth about me. You see, back in my law school days, one of my classmates was a New York City cop and he advised me on the best weapon to keep in my car for protection. That damning truth? I had a piece of rubber garden hose in my car next to the driver’s seat. Fortunately, it never came out at trial.

- - -

Carl Steinhouse had been a federal prosecutor for the United States Department of Justice for 15 years after which he went into private practice specializing in class actions, white-collar crime, and civil and criminal defense trials. Prior to his legal studies, he had served as an intelligence analyst in the Army Counterintelligence Corps. Since his retirement, he has authored five books in his Holocaust Heroes series: “Wallenberg is Here!” “Righteous and Courageous,” “Improbable Heroes,” “Barred” and “Wily Fox.” See www.carlsteinhouse.com for details. He can be reached at stein0216@comcast.net.

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