author: PELL, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Sidney FLAXMAN, Defendant-Appellant.
    No. 73-1616.
    United States Court of Appeals, Seventh Circuit.
    Argued Oct. 31, 1973.
    Decided April 23, 1974.

      Charles A. Bellows, Chicago, Ill., for defendant-appellant.
    James R. Thompson, U. S. Atty., William T. Huyck, Asst. U. S. Atty., Chicago, Ill., for plaintiff-appellee.
    Before KILEY, Senior Circuit Judge, and PELL and SPRECHER, Circuit Judges.
   PELL, Circuit Judge.

Appellant Sidney Flaxman and four former officials of the Steinberg-Baum Company discount stores were named in an eight-count indictment charging conspiracy and mail fraud, 18 U.S.C. §§ 371, 1341. The indictment alleged, inter alia, that false retailers’ occupation tax returns had been submitted to the State of Illinois. From January 1, 1968, through January 30, 1971, the returns submitted had understated sales by approximately $32 million, resulting in a loss of revenue to the State of Illinois of roughly $1.5 million.

Only Flaxman, a CPA hired to prepare the Company’s occupation tax returns and federal income tax returns, stood trial. After a bench trial, the court found Flaxman guilty as charged. The court sentenced the defendant to concurrent two-year prison terms on the first four counts and to probation for two years on the last four counts, the term of probation to be served consecutively to the imprisonment.

On this appeal, Flaxman raises four issues: (1) whether the evidence was sufficient to sustain the court’s finding on Count I, the conspiracy count; (2) whether mailings of the Illinois tax returns were an integral part of the defendants’ scheme; (3) whether the Government presented sufficient evidence of the use of the United States mails; and (4) whether the evidence proved that Flaxman had had the intent to defraud.

I

Since the same evidence reflects on both the first and fourth contentions, we will consider them together. Flaxman first started to prepare the state tax returns in 1962 or 1963. One of the office workers would give the defendant the total sales figures for each of the Stein-berg-Baum stores. There were thirteen retail stores, each of which was a separate corporation. According to Flax-man, when he first prepared a retailers’ occupation tax return and showed it to Louis Steinberg, president of the companies and named in the indictment as a co-conspirator, Steinberg told him that he had not taken into account the wholesale sales. From a notebook, Steinberg gave Flaxman the amounts of wholesale sales which he, Steinberg, said should have been deducted.

Flaxman then made the return showing the gross receipts and the net figures after deducting the supposed wholesale sales amounts. After he showed this to the president, Steinberg insisted that he wanted only the net taxable figure stated on the return. Flaxman accordingly prepared the return and all subsequent returns in this fashion, although the tax form clearly called for “Total Receipts from sales of Tangible Personal Property and Services,” followed by “Total Deductions Authorized by Law,” the first category of which was “Receipts From — Sales Made for Purposes of Resale,” i. e., wholesale sales.

Flaxman was not an employee of the company but was an independent professional man, a certified public accountant who by the manner of filling out the returns, which he did personally, was participating in a representation to the state taxing authority that the amounts reported were the total or gross sales including wholesale sales, whereas in fact the figure reported would have been a net figure after deducting the purported wholesale sales. The wholesale sales amounts furnished by Steinberg were fictitious and generally amounted to 90% of the total sales.

Flaxman testified that he relied upon Steinberg’s assertion that he could prove the wholesale figures, that it was not his responsibility to look behind the figures furnished by the taxpayer, and that he had been told that the net figure could be used for the total sales amount when he had been an employee of the Illinois Department of Revenue.

The district court obviously did not find Flaxman a credible witness, and we, of course, are not to second guess the trier-of-fact’s determinations of credibility. Aside from disbelief of some of this testimony on a credibility basis, we note that while Flaxman relied on a bulletin from the American Institute of Certified Public Accountants on the scope of the accountant’s responsibility, that bulletin also státed that the “CPA cannot ignore the implication of information known by him . . . ”

/

There is more than sufficient evidence here to support a reasonable inference that Flaxman was engaged in a covert procedure with regard to reporting the sales income of the involved companies. He ignored the plain language of the return form, which called for total sales income and authorized deductions to be listed separately. The return had a place for the signature of the person, other than the taxpayer, preparing the return. Flaxman never put his signature on the returns even though he prepared the returns, typing the final return himself. He gave as his reason for not signing that he had not made any examination of the wholesale sales. However, the form did not call for signature by an auditor of the books but by the preparer of the return.

Although Flaxman ignored the itemization for deductions authorized by law, he did apparently compute what the occupation tax would be for the total receipts item, which was to include tax collected by the stores, and he would then deduct this amount to determine the tax to be paid. This amount could have had virtually no relationship to the amount of tax actually collected from customers because the reported figure of total receipts, which included tax collected, was only, as indicated hereinbefore, about 10% of the actual total. He had been at the two stores the returns for which were the subject of the various counts of the indictment, had seen their advertisements in the newspapers, and admitted on the stand that they were what one would call retail stores. Yet he expressed no scepticism that 90% of their receipts were of wholesale character.

* » * * *
3. Total amount of receipts received by him during the preceding calendar month from sales of tangible personal property . . .

As the district court said in sentencing the defendant, “He cannot hide behind the shield of the accounting manual practice and procedures [H]e cannot shut his eyes to what he must understand is erroneous information . . . . He had to know what was wrong.” There was sufficient evidence of intent to defraud.

As to Cpunt I, Flaxman argues that the Government failed to prove beyond a reasonable doubt that he had entered into an agreement with anyone to commit the offense charged in the conspiracy count. However, “[i]t is well settled in our Circuit that no formal agreement is necessary to constitute a conspiracy to commit an offense under 18 U.S.C. § 371 . . . .” United States v. Robinson, 470 F.2d 121, 123 (7th Cir. 1972). The Government may rely upon circumstantial evidence of the concert of action among the defendants. Further, a conspirator need not participate in all the activities of a conspiracy in order to be held liable for the unlawful scheme. United States v. Cardi, 478 F.2d 1362, 1368-1369 (7th Cir. 1973); United States v. Fellabaum, 408 F.2d 220, 224 (7th Cir. 1969), cert. denied, 396 U.S. 858, 90 S.Ct. 125, 24 L.Ed.2d 109.

* * * si: :!:
5. Deductions allowed by law . . . .”
“The statute sets forth with great detail the matters which must go into the monthly return, and lays down a guide which, when followed, leaves nothing open for arbitrary discretion.” Department of Finance v. Cohen, 369 Ill. 510, 516, 17 N.E.2d 327, 329 (1938).

The evidence which we have reviewed in our opinion clearly is sufficient to establish by circumstantial evidence that Flaxman, although he originally had attempted to set up the figures on the return in a manner of proper disclosure, did ultimately agree to the covert procedure and this agreement continued through subsequent years during which Flaxman utilized the supposed relatively minimal retail sales figures as furnished by Steinberg.

The fair inference from Flaxman’s testimony, and for the present purposes we have accepted his version on this phase of the case, is that he secured the supposed wholesale sales figures each time from Steinberg, thus assuming Steinberg’s availability month after month over several years time. In this connection, it is to be noted that the employee, Williams, who turned the actual total receipts figure over to Flaxman, testified that it was not usual for Flax-man to go in to talk to the “bosses.” If this was true, the participation in the scheme by Flaxman was even more patent. There was evidence from General Manager Freedman that Steinberg-Baum’s policy was to report only about 10% of actual retail sales. If Flaxman did not get the monthly figure from Steinberg, the inference is strong that he was automatically implementing the 10% agreed upon policy.

Under either approach, the circumstantial evidence is sufficient to support the conspiracy conviction.

II

Defendant next asserts that “the mailings of the sales tax returns here occurred after the scheme had been essentially accomplished . . . .”

A Steinberg-Baum employee testified that the Illinois Department of Revenue supplied preprinted envelopes for the occupation tax returns and that it was her practice to put the completed returns in the envelope provided by the State and then to place the envelope in the office’s outgoing mail container. Prominently placed on the front of the forms issued by the State was the instruction: “— Mail to — Retailers’ Occupation Tax Division, 400 South Spring Street, Springfield, Illinois 62706.” Thus, the misrepresentations that constituted the fraud were contained in documents that were to be sent through the mails.

However, even assuming that the returns could have been delivered to Springfield by private messenger, an essential part of the scheme to defraud was the delivery, and here it was by United States mail, bringing the activity in question within federal criminal jurisdiction.

Subsequent to oral argument in this case, the United States Supreme Court handed down its decision in United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974). The defendant in his brief, however, relied on qarlier cases to the same effect as Maze, such as Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88 (1944). Nothing in this line of cases, including Maze, in our opinion is of’help to Flax-man. In Maze, the scheme had reached fruition when the credit card was used. Subsequent mailing did not forward the scheme so far as the perpetrator was concerned. His scheme had been accomplished. Here, however, the delivery to the revenue office was an integral part of the scheme.

It would appear that a person who desires to evade taxes could take one of two principal routes. He could just decline to file a return or he could file a return with false figures. The first path, of course, would not require any delivery, but it leaves the perpetrator in the position of being on the face of the matter a law violator. The second route places him in the facial position of having complied with the law, and in the absence of an audit, or the matter being brought to the attention of the taxing authorities by an informer, he is home free. Thus, under the semblance of compliance course, the most significant act to accomplish the scheme was the delivery to Springfield. Fruition was brought about directly by the use of the mails.

Just because the State of Illinois was the victim and makes such a scheme illegal does not preclude the Federal Government from prosecuting the perpetrators under an applicable federal law. Parr v. United States, 363 U.S. 370, 80 S.Ct. 1171, 4 L.Ed.2d 1277 (1960).

Ill

Some of the same factors bear on the related issue of whether the Government met its burden on the use of the mails. In addition to the testimony about the procedures used in the Company’s office, there was evidence that the returns were in fact received by the Illinois Department of Revenue. The checks accompanying the returns, some of which were introduced into evidence, had been negotiated and obviously also had reached the Department of Revenue. Further, witness Jankovich stated that she sent deposits to banks in the same manner and that she received deposit slips acknowledging receipt of the deposits. Evidence of office custom and procedure is acceptable to establish the fact of mailing where the witness did not personally place the letter in a U. S. mailbox. United States v. Fassoulis, 445 F.2d 13, 16-17 (2d Cir. 1971), cert. denied, 404 U.S. 858, 92 S.Ct. 110, 30 L. Ed.2d 100. Viewing the evidence, as we must, in the light most favorable to the Government, we find that the trier-of-fact’s determination must be upheld.

For the reasons hereinbefore set out, the judgment of conviction is affirmed.

Affirmed.

      . Three of the other defendants pleaded guilty. The fourth became a fugitive.

      . The occupation tax is measured by the gross receipts from sales of tangible personal property at retail. It is designed to cover retail sales only. Theo. B. Robertson Products Oo. v. Nudelman, 389 111. 281, 59 N.E. 2d 655 (1945).

      . The Illinois statute, Chapter 120, § 442, in pertinent part provided: “ . . . on or before the last day of each calender month, every person [including corporations] engaged in the business of selling tangible personal property at retail in this State during the preceding calendar month shall file a return with the Department, stating :


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    David JACKSON, Jr., Appellant, v. UNITED STATES of America, Appellee.
    No. 74-1091.
    United States Court of Appeals, Eighth Circuit.
    Submitted April 19, 1974.
    Decided April 23, 1974.

      David Jackson, Jr., pro se.
    Allen L. Donielson, U. S. Atty., and Keith E. Uhl, Asst. U. S. Atty., Des Moines, Iowa, for appellee.
    Before MATTHES, Senior Circuit Judge, ROSS, Circuit Judge, and VAN PELT, Senior District Judges.

       The Honorable Robert Van Pelt, Senior District Judge, District of Nebraska, sitting by designation.

   PER CURIAM.

On November 17, 1971, following a three-day trial, David Jackson, Jr., was found guilty by a jury of three violations of 26 U.S.C. §§ 4704(a), and 4705(a) and 21 U.S.C. § 174, relating to the receipt, sale and distribution of heroin. Sentence was imposed under the provisions of 26 U.S.C. § 7237(d)(1) and (2). The judgment of conviction was affirmed by this Court in United States v. Jackson, 468 F.2d 1388 (8th Cir. 1972), cert, denied 93 S.Ct. 1391, 35 L.Ed.2d 599, 410 U.S. 935 (1973). Jackson thereafter brought a motion to vacate his sentence under 28 U.S.C. § 2255 in the district court alleging that: (1) he was tried and convicted under a repealed statute; (2) the government agent failed to search the informer and keep him in sight at all times in order to witness the heroin exchanges; (3) the district court failed to conduct an exclusionary hearing on the voluntariness of some inculpatory statements made by Jackson to a government agent; (4) a polygraph examination was improperly held inadmissible at trial; (5) the transcript of the trial had been altered; and (6) a statement by an informant should have been made available to Jackson prior to trial through an omnibus hearing. The district court entertained the motion without the production of the incarcerated Jackson. Cf. 28 U.S.C. § 2255. After various motions, appearances by counsel, and a review of the files and record, the district court denied Jackson’s motion to vacate his sentence. Jackson appeals to this Court on all grounds alleged in his original petition. In addition, he argues that the systematic exclusion of blacks from the grand jury that indicted him deprived him of his rights to due process and equal protection and that he should have been allowed to testify in the § 2255 proceedings. We affirm the decision of the district court.

The Supreme Court has recognized four grounds properly within the scope of a motion under 28 U.S.C. § 2255:

(1) “that the sentence was imposed in violation of the Constitution or laws of the United States,” (2) “that the court was without jurisdiction to impose such sentence,” (3) “that the sentence was in excess of the maximum authorized by law,” and (4) that the sentence is “otherwise subject to collateral attack.”

Hill v. United States, 368 U.S. 424, 426-427, 82 S.Ct. 468, 470, 7 L.Ed.2d 417 (1962). The writ is not designed for collateral review of errors of law committed by the trial court such as questions relating to the sufficiency of the evidence to support the conviction, irregularities in the grand jury procedure, or other errors in trial procedure which do not cross the jurisdictional line. Sunal v. Large, 332 U.S. 174, 179, 67 S.Ct. 1588, 91 L.Ed. 1982 (1947). Some of Jackson’s claims clearly come within that rule. However, constitutional defects in the process are cognizable under a § 2255 motion. Kaufman v. United States, 394 U.S. 217, 222, 89 S. Ct. 1068, 22 L.Ed.2d 227 (1969). Accordingly, this Court has held that it is only where a sentence is void or otherwise subject to collateral attack that § 2255 affords a remedy, and a motion under that section cannot function as a substitute for an appeal. Cardarella v. United States, 351 F.2d 443, 447 (8th Cir. 1965), cert. denied, 382 U.S. 1020, 86 S.Ct. 640, 15 L.Ed.2d 534 (1966). With these considerations in mind, we consider Jackson’s claims briefly.

In 1971, 26 U.S.C. §§ 4704 and 4705, and 21 U.S.C. § 174 were repealed by the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. § 801 et seq. The effective date of the latter Act was May 1, 1971. Act of October 27, 1970, § 1105(a), Pub.L.No.91-513, 84 Stat. 1295. Jackson was charged under statutes repealed by that Act. The acts giving rise to the charge occurred prior to May 1, 1971. However, the indictment was not returned until after May 1, 1971. Jackson argues that because Congress had repealed the statute upon which his conviction rested before the return of the indictment, the indictment is null and void.

This argument has already been determined adversely to Jackson on direct appeal from his conviction. United States v. Jackson, 468 F.2d 1388 (8th Cir. 1972), cert. denied, 410 U.S. 935, 93 S.Ct. 1391, 35 L.Ed.2d 599 (1973). Ordinarily a matter that has been decided adversely to a defendant on appeal cannot be litigated in a § 2255 motion. Butler v. United States, 340 F.2d 63 (8th Cir.), cert. denied, 382 U.S. 847, 86 S.Ct. 92, 15 L.Ed.2d 87 (1965). However, Jackson argues that Bradley v. United States, 410 U.S. 605, 93 S.Ct. 1151, 35 L.Ed.2d 528 (1973), which has since been decided by the Supreme Court, must modify our earlier disposition of his claim.

As Jackson recognized, the precise claim he urges here was not raised in Bradley. Rather that case considered the effect of the savings clause contained in the Comprehensive Drug Abuse Prevention and Control Act of 1970 on the ability to sentence under the repealed statute’s directive when the sentencing postdated the new Act’s effective date. The savings clause provided :

Prosecutions for any violation of law occurring prior to the effective date of [the Act] shall not be affected by the repeals or amendments made by [it] ... or abated by reason thereof.

The Court held that that clause preserved the right to sentence under the former statute since sentencing is a part of the legal concept of “prosecution” and was thereby not affected or abated by the repeal. Jackson argues that the keystone of the Bradley rationale is that “prosecutions” imports a definite beginning and terminus; that a prosecution does not commence until an indictment is returned; that only “prosecutions” were not affected; and thus that the savings clause did not operate to preserve uncommenced prosecutions and the government was without jurisdiction to prosecute him.

However, the Supreme Court’s construction of the term “prosecution” in Bradley does not affect the power of the government to charge and try a defendant for the substantive offense, for the plain language of the savings clause preserves the substantive offense. The clause clearly states that the repealing statute has no effect on prosecutions for “any violation of law occurring prior to the effective date” of May 1, 1971. The determining factor, then, is not when the prosecution began, but when the violation of the law allegedly occurred. See United States v. Mallow, 470 F.2d 967, 968 (5th Cir. 1972); United States v. DeSimone, 468 F.2d 1196, 1200 (2d Cir. 1972), cert. denied, 410 U.S. 989, 91 S.Ct. 1499, 36 L.Ed.2d 188 (1973). In addition, our previous disposition of the claim reasoned that the general statutory savings clause, 1 U.S.C. § 109, operated to save the repealed statute from such abatement as would otherwise obtain at common law, since § 1103(a) was not an express provision contrary to the provisions of 1 U.S.C. § 109. See United States v. Ramirez, 480 F.2d 76, 78 (9th Cir.), cert. denied, 414 U.S. 1012, 94 S. Ct. 379, 38 L.Ed.2d 251 (1973). In United States v. Ramirez, supra, certiorari was denied despite a dissenting opinion that “prosecution” as used in the savings clause imported a beginning and an end. The end, as Bradley held, was the conelusion of sentencing. The beginning, the dissenter felt, was the return of the indictment. Thus, where a prosecution was commenced after the repeal of the former statute, the dissent reasoned that sentencing must be under the terms of the replacing statute. However, even the dissent recognized that the substantive offense was preserved. Id. 94 S.Ct. at 379.

Two additional claims warrant our attention. First, Jackson’s claim that the grand jury selection procedure deprived him of his constitutional rights was not addressed by the district court. However, our Court has previously upheld the jury selection plan for the Southern District of Iowa from constitutional attack on the basis of racial discrimination. United States v. Whitley, 491 F.2d 1248 (8th Cir. 1974). Second, Jackson was not entitled to be present at the § 2255 proceedings. 28 U.S.C. § 2255 specifically provides :

A court may entertain and determine such motion without requiring the production of the prisoner at the hearing.

Accordingly, the Supreme Court has noted:

The language of the statute does not strip the district courts of all discretion to exercise their common sense. Indeed, the statute itself recognizes that there are times when allegations of facts outside the record can be fully investigated without requiring the personal presence of the prisoner.

Machibroda v. United States, 368 U.S. 487, 495, 82 S.Ct. 510, 514, 7 L.Ed.2d 473 (1962). Here there were no “substantial issues of fact as to events in which the prisoner participated.” See United States v. Hayman, 342 U.S. 205, 223, 72 S.Ct. 263, 274, 96 L.Ed. 232 (1952).

We have examined the other contentions of Jackson and affirm on the basis of the district court’s opinion. For the reasons hereinbefore expressed, the denial of the motion to vacate Jackson’s sentence is affirmed.

      . 1 U.S.C. § 109 provides in pertinent part: The repeal of any statute shall not have the effect to release or extinguish any penalty, forfeiture, or liability incurred under such statute, unless the repealing Act shall so expressly provide, and such statute shall be treated as still remaining in force for the purpose of .sustaining any proper action or prosecution for the enforcement of such penalty, forfeiture, or liability.


author: ROSS, Circuit Judge.

text:
    Wallace P. FELICIA, Appellant, v. UNITED STATES of America, Appellee.
    No. 73-1812.
    United States Court of Appeals, Eighth Circuit.
    Submitted March 12, 1974.
    Decided April 9, 1974.
    Charles M. Thompson, Pierre, S. D., for appellant.
    Robert D. Hiaring, Asst. U. S. Atty., Sioux Falls, S. D., for appellee.
    Before VOGEL, Senior Circuit Judge, LAY and ROSS, Circuit Judges.
   ROSS, Circuit Judge.

This case presents the question of whether the United States District Court has jurisdiction to sentence an Indian defendant on his conviction of a lesser included offense under an indictment charging a violation of the Major Crimes Act, 18 U.S.C. § 1153. The trial court held that it had jurisdiction. We affirm.

Wallace P. Felicia was indicted for assault with intent to inflict great bodily injury upon Emery W. Loudner, Jr., also an Indian, on the Crow Creek Indian Reservation. At the conclusion of the presentation of the evidence at the trial, the defendant requested an instruction on the lesser included offenses of assault or assault and battery pursuant to the Supreme Court’s recent decision in Kee-ble v. United States, 412 U.S. 205, 93 S. Ct. 1993, 36 L.Ed.2d 844 (1973). The instruction was given and the jury found Felicia guilty of “simple assault or assault and battery.” Felicia was sentenced to sixty days imprisonment and a fine of $5.00.

On this appeal Felicia claims that although the trial court was obligated to give the lesser included offense instruction, the federal courts have no jurisdiction over the offense of simple assault or assault and battery, and that therefore the court could not lawfully sentence Felicia for that offense. It is a unique argument, but a full and careful reading of Keeble v. United States, supra, causes us to reject it.

Offenses by Indians against Indians in Indian country are ordinarily subject to the jurisdiction of the tribal courts. U. S. Dep’t of the Interior, Federal Indian Law 319-20 (1958). Yet some federal laws and treaties provide for limitations on that tribal authority. The most important such limitation to which we must look for the source of jurisdiction here is contained in 18 U.S.C. § 1153:

Any Indian who commits against the person or property of another Indian or other person any of the following offenses, namely, murder, manslaughter, rape, carnal knowledge of any female, not his wife, who has not attained the age of sixteen years, assault with intent to commit rape, incest, assault with intent to kill, assault .with a dangerous weapon, assault resulting in serious bodily injury, arson, burglary, robbery, and larceny within the Indian country, shall be subject to the same laws and penalties as all other persons committing any of the above offenses, within the exclusive jurisdiction of the United States.
* * * X- X- X-
As used in this section, the offenses of burglary, assault with a dangerous weapon, assault resulting in serious bodily injury, and incest shall be defined and punished in accordance with the laws of the State in which such offense was committed.

We have previously held that that statute did not vest jurisdiction in the federal courts over lesser included offenses. Kills Crow v. United States, 451 F.2d 323, 325 (8th Cir. 1971), cert. denied, 405 U.S. 999, 92 S.Ct. 1262, 31 L. Ed.2d 467 (1972); United States v. Davis, 429 F.2d 552, 554 (8th Cir. 1970). See also Keeble v. United States, 459 F.2d 757, 762 (8th Cir. 1972), rev’d, 412 U.S. 205, 93 S.Ct. 1993, 36 L.Ed.2d 844 (1973). However, in light of the Supreme Court’s reversal in Keeble, requiring that in trials for violations of 18 U.S.C. § 1153, an instruction for the lesser included offense must be given when the evidence warrants, we must reexamine our earlier holdings.

In Keeble, the Supreme Court reasoned that Congress did not intend to deprive Indian defendants of procedural rights guaranteed to other defendants, or to make it easier to convict an Indian than any other defendant:

Indeed, the Act expressly provides that Indians charged under its provisions “shall be tried in the same courts, and in the same manner, as are all other persons committing any of the above crimes within the exclusive jurisdiction of the United States.” . In the face of that explicit statutory direction, we can hardly conclude that Congress intended to disqualify Indians from the benefits of a lesser offense instruction, when those benefits are made available to any non-Indian charged with the same offense.

Id. 412 U.S. at 212, 93 S.Ct. at 1997. (citations omitted). However, Keeble did not explicitly hold that jurisdiction for a conviction of and punishment for the lesser included offense existed in the federal court:

Finally, we emphasize that our decision today neither expands the reach of the Major Crimes Act nor permits the Government to infringe the residual jurisdiction of the tribe by bringing prosecutions in federal court that are not authorized by statute. We hold only that where an Indian is prosecuted in federal court under the provisions of the Act, the Act does not require that he be deprived of the protection afforded by an instruction on a lesser included offense, assuming of course that the evidence warrants such an instruction. No interest of a tribe is jeopardized by this decision.

Id. at 214, 93 S.Ct. at 1998. (emphasis supplied). We conclude that the jurisdiction of the federal courts was not expanded by the Keeble decision but that jurisdiction over a lesser included offense is implicit in the statutes hereinafter set forth. We adopt this view for several reasons.

First, the clear language of 18 U.S.C. § 1153 itself provides that any Indian committing any of the enumerated offenses shall be subject to the same laws and penalties as all other persons committing any of the offenses within the exclusive jurisdiction of the United States. Convictions for lesser included offenses are cognizable at federal law. Sansone v. United States, 380 U.S. 343, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965); Stevenson v. United States, 162 U.S. 313, 16 S.Ct. 839, 40 L.Ed. 980 (1896).

Another factor supports the recognition of federal jurisdiction over lesser included offenses. In 1968, 18 U. S.C. § 1153 was amended to provide that the offense of assault resulting in serious bodily injury “shall be defined and punished in accordance with the laws of the State in which such offense was committed.” Act of April 11, 1968, Pub. L. No. 90-284, 82 Stat. 80. (Emphasis supplied.) As defined by South Dakota law, assault is a lesser included offense within assault with intent to inflict great bodily injury. So.Dak.Com.Laws 22-18-1 and 22-18-12. Similarly, South Dakota law permits conviction of and punishment for the lesser included offense. So.Dak.Com.Laws 23-45-23; State v. Cotton, 36 S.D. 396, 155 N.W. 8 (1915). Thus, as defined by the laws of South Dakota, a conviction for the lesser included offense of assault, or assault and battery is permissible when a defendant is charged with assault with intent to inflict great bodily injury.

Finally, and most importantly, since the Supreme Court in Keeble required that the instruction for the lesser offense be given, it could not have intended it to be an exercise in futility, leaving the federal courts without the power to sentence after a conviction of the lesser included offense is returned. This was recognized specifically in the dissent of Justice Stewart. Keeble v. United States, supra, 412 U.S. at 216, 93 S.Ct. 1993, 36 L.Ed.2d 844.

In short, since lesser included offenses are cognizable at federal law and at state law; since section 1153 provides that an Indian charged under the Major Crimes Act shall be subject to the same laws and penalties as all other persons committing any of those offenses; since the offenses must be defined and punished in accordance with South Dakota law; and since we believe that the Supreme Court in Keeble implicitly recognized that federal courts have jurisdiction to convict and punish for a lesser offense included within the enumerated crimes of the Major Crimes Act, we agree with the district court that it had jurisdiction to sentence Felicia.

For the reasons hereinbefore expressed, the judgment of conviction is affirmed.


text:
    Joan G. RANDALL, Plaintiff, Appellee, v. Peter GOLDMARK et al., Defendants, Appellants.
    No. 73-1374.
    United States Court of Appeals, First Circuit.
    Argued Jan. 8, 1974.
    Decided April 18, 1974.

      Kenneth A. Behar, Asst. Atty. Gen., with whom Robert H. Quinn, Atty. Gen., and Walter H. Mayo, III, Asst. Atty. Gen., Boston, Mass., were on brief, for defendants, appellants.
    Frank P. Samford, III, Cambridge, Mass., with whom John E. Bowman, Jr., Cambridge, Mass., was on brief, for plaintiff, appellee.
    Before COFFIN, Chief Judge, ALD-RICH and McENTEE, Circuit Judges.
   PER CURIAM.

On this appeal, the Massachusetts Department of Public Welfare (the Department) and its executive officials challenge a determination by the district court, 366 F.Supp. 947 that the Department’s reduction of plaintiff’s AFDC “shelter allowance” violated section 402(a)(7) of the Federal Social Security Act, 42 U.S.C. § 602(a)(7) (1970), and the regulations promulgated thereunder. 45 C.F.R. § 233.20(a) (3) (ii)(c) (1972). Specifically, the district court in granting injunctive relief, ruled that the Department could not reduce plaintiff’s $103 monthly shelter benefits by a $100 per month payment that her estranged husband was required to make directly to the mortgagee of the house in which plaintiff and her children were currently residing. These payments were being made by plaintiff’s spouse pursuant to a state probate court separation decree.

While recognizing that section 402(a)(7) permits state agencies to take into consideration, in determining a recipient’s actual need, “any other [available] income and revenue,” the court noted that the quoted phrase had been defined by federal regulation as encompassing “only such net income as is actually available for current use ., [or] currently available resources.” 45 C.F.R. § 233.20(a)(3) (ii) (c) (1972). (Emphasis added). Given such a definition, the court reasoned, the Department’s policy of deducting such mortgage payments made directly to the mortgagee violated section 402(a)(7) and its effectuating regulations since these payments could not constitute “either income available to plaintiff for current use, or ... a currently available resource.” Although plaintiff also urged that the Department’s policy was constitutionally invalid under the fourteenth amendment, the court, by disposing of the case on statutory grounds, concluded that it was unnecessary to reach directly the merits of her constitutional contentions.

We must first consider our jurisdiction.

Section 1343(8) Constitutional Claims and Pendent Jurisdiction

Plaintiff makes two constitutional claims. It is clear that there is no pendent jurisdiction over the statutory claims if the constitutional claim is totally insubstantial. See United Mine Workers v. Gibbs, 1966, 383 U.S. 715, 722, 86 S.Ct. 1130, 16 L.Ed.2d 218; Almenares v. Wyman, 2 Cir., 1971, 453 F. 2d 1075, 1082 & n.9, cert. denied 405 U. S. 944, 92 S.Ct. 962, 30 L.Ed.2d 815; cf. Hurn v. Oursler, 1933, 289 U.S. 238, 242-243, 53 S.Ct. 586, 77 L.Ed. 1148.

Plaintiff’s equal protection contention is essentially predicated upon the fact that the Department will, in all cases, deduct an estranged husband’s shelter payments only up to the maximum statutorily-allowable amount that would otherwise be available to an AFDC-recipient wife. Thus, since plaintiff’s mortgage is $184, and her husband can allegedly afford to pay only $100 of that sum, the Department would provide her with just $3 in shelter payments ($103 maximum — $100 payment) — leaving her $81 short. However, plaintiff argues, a comparable recipient with an $184 monthly mortgage whose separated spouse can afford to pay the entire mortgage cost would also have her shelter allowance reduced only up to the statutory maximum (in this case, the full $103), yet, at the same time, this recipient would be required to make no additional housing payments. Failure to equalize the ultimate housing consequences between the two recipients results, according to plaintiff, in an equal protection violation.

It is difficult to see any merit in this claim. While it is clear that it is true that with respect to these two purported “classes,” certain disparities in housing arrangements would result from the Department’s decision to treat all recipients uniformly, it cannot be seriously maintained that the cause of such disparity can properly be laid to the challenged Department policy. The Department has the unquestioned, limited obligation of providing all AFDC recipients whose family situation is comparable to that of the plaintiff with $103 worth of shelter. How that amount is to be allocated, whether through rental of an apartment, or through mortgage payments on a house, is strictly up to the recipient. To the extent that such shelter costs are actually reduced by third parties, the Department may, where regulations so permit, see post, legitimately make deductions from its maximum allowance. See Rodriguez v. Vowell, 5 Cir., 1973, 472 F.2d 622, 627; Reyna v. Vowell, 5 Cir., 1972, 470 F.2d 494, 496; Solman v. Shapiro, D.Conn., 1969, 300 F.Supp. 409, 414-416. Since the Department’s resources are necessarily limited, such a practice is supported by the strong public policy of ensuring that the basic shelter requirements of all welfare recipients can be adequately met. Cf. Jefferson v. Hackney, 1972, 406 U.S. 535, 549, 92 S.Ct. 1724, 32 L.Ed.2d 285; Dandridge v. Williams, 1970, 397 U.S. 471, 479, 480, 90 S.Ct. 1153, 25 L.Ed.2d 491. The fact that certain recipients can, as a result of circumstances wholly apart from their relationship with the Department, independently satisfy their shelter needs in amounts greater than the specific welfare maximum, does not mean that the Department becomes thereby compelled to provide financial assistance above that maximum to recipients, such as plaintiff, who are not so fortunate. Nor does it mean that the Department must, as to these latter recipients, abandon its uniform policy of reducing shelter benefits to the extent of outside payments. There can be no equal protection violation where the Department, for permissible policy reasons, Jefferson v. Hackney, ante; Dandridge v. Williams, ante, treats all recipients alike, even though the result may occasionally lead to some disparity in housing consequences.

We have equal difficulty with plaintiff’s due process claim. It is, of course, true, as plaintiff asserts, that the Supreme Court has frequently found the application of irrebuttable presumptions to be unconstitutional. However, the only presumption made by the Department in the present case is that the mortgage payments made by plaintiff’s separated spouse are actually used to reduce her shelter costs. There can be no question but that this is so at least in part. While plaintiff claims that she should be reimbursed for the full $81 amount, there is no economic justification for this. Her real claim is that only part of the $81 should be attributed to a housing allowance and that the rest is being applied to discharge the purchase money mortgage. The reasonableness of this we will deal with later. (See The Merits, post.)

Section IS US Statutory Claim Jurisdiction

Plaintiff claims that jurisdiction over her statutory claim can be based directly on section 1343(3) and (4). Section 1343(3) gives district courts jurisdiction over civil actions

“[t]o redress the deprivation, under color of any State law, ... of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States.”

Although the Social Security Act is not a statute “providing for equal rights,” Aguayo v. Weinberger, 414 U.S. 1146, 94 F.2d 1090, 1101, cert. denied sub nom. Aguayo v. Weinberger,-U.S.-, 94 S. Ct. 900, 39 L.Ed.2d 101 (1974); McCall v. Shapiro, 2 Cir., 1969, 416 F.2d 246, 248-249, plaintiff contends that her claim falls within the scope of section 1983, and that section 1343 should be read as coextensive with section 1983, since originally it was intended to be the jurisdictional counterpart of section 1983. While the historical nexus between the two provisions is beyond question, see, e. g., Lynch v. Household Finance Corp., 1972, 405 U.S. 538, 543-546, 92 S.Ct. 1113, 31 L.Ed.2d 424, the statutory language of section 1983 is not the same as that of section 1343(3), and to read them as coextensive would render the qualification in section 1343(3) “providing for equal rights of citizens” a nullity. We see no reason to so ignore the plain import of the statutory language.

Plaintiff also claims that jurisdiction would lie under section 1343(4). That section provides for jurisdiction in the district courts over any civil action “[t]o recover damages or to secure equitable or other relief under any Act of Congress providing for the protection of civil rights, including the right to vote.” Section 1983 can be read as such an act providing for the protection of civil rights, and therefore, plaintiff claims, jurisdiction over this claim would lie. In Gomez v. Florida State Employment Service, 5 Cir., 1969, 417 F.2d 569, 580, n. 39, in a footnote, the Fifth Circuit appeared to accept this argument. Such a broad interpretation of the effect of section 1343(4), however, appears to be directly contrary to the congressional intent when it was added to section 1343 in the Civil Rights Act of 1957. In House Report No. 291, April 1, 1957, U. S.Code Cong. & Admin.News, p. 1976, this subsection is described as follows:

“These amendments are merely technical amendments to the Judicial Code so as to conform it with amendments made to existing law by the preceding section of the bill.”

In Jones v. Alfred H. Mayer Co., 1968, 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189, the Court approved the invocation of section 1343(4) to allow jurisdiction over a suit brought under an 1866 civil rights statute. Although this might be taken as an endorsement of a broad reading of the statute, applying section 1343(4) to section 1983 would in essence eliminate the jurisdictional amount requirement for any federal question case involving deprivations under color of state law, a consequence arguably so broad when measured in the light of the congressional objectives in adding section 1343(4), that we prefer not to make a positive commitment at this time.

Section 1331 Jurisdiction

Since plaintiff is contending that the questioned Department policy violates both section 402(a)(7) of the Social Security Act and the federal regulations promulgated thereunder, jurisdiction would be available pursuant to 28 U.S.C. § 1331 (1970), if it could be shown that the amount in controversy exceeded $10,000. The district court, in rejecting section 1331 jurisdiction, stated that “[djirect damage to the plaintiff falls considerably below the threshold amount. Indirect damage such as her loss of future property rights, the disruption of her home, and the right to future welfare benefits are too speculative for this court to properly consider.”

Without pausing to make a general ruling on this subject, cf. Rosado v. Wyman, 1970, 397 U.S. 397, 405 n.7, 90 S. Ct. 1207, 25 L.Ed.2d 442, and without pursuing to a finality the extent of the “legal certainty” by which a claim that more than the statutory amount is involved must be refuted, cf. St. Paul Mercury Ind. Co. v. Red Cab Co., 1938, 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845, we have the gravest doubts whether in the case at bar the statutory amount is present. We must agree with the district court that the possible loss of plaintiff’s property rights in, or of possession of, her home are altogether speculative and incapable of measurement. There is nothing in the record indicating that if forced to, plaintiff could not find adequate housing, at welfare standards, at $103 a month. Nor can we measure the alleged physical and psychological damage that plaintiff claims her family might suffer if she were obliged to move. See, e. g., Davis v. Shultz, 3 Cir., 1971, 453 F.2d 497, 502 (displacement from youth services program); cf. Johnson v. New York State Education Dept., E.D.N.Y., 1970, 319 F. Supp. 271, 275, aff’d, 2 Cir., 1971, 449 F.2d 871, vacated for determination as to mootness, 409 U.S. 75, 93 S.Ct. 259, 34 L.Ed.2d 290 (loss of educational opportunity); Kiernan v. Lindsay, S.D.N.Y., 1971, 334 F.Supp. 588, 594-595, aff’d, 405 U.S. 1000, 92 S.Ct. 1295, 31 L.Ed.2d 472 (suspension of tenure).

We do agree with plaintiff, however, that the threatened loss of future welfare payments is a sufficiently real possibility to warrant consideration for section 1331 purposes. But, even giving full consideration to such cases as Thompson v. Thompson, 1913, 226 U.S. 551, 33 S.Ct. 129, 57 L.Ed. 347, Brotherhood of Locomotive Firemen & Enginemen v. Pinkston, 1934, 293 U.S. 96, 55 S.Ct. 1, 79 L.Ed. 219, and Aetna Cas. & Surety Co. v. Flowers, 1947, 330 U.S. 464, 67 S.Ct. 798, 91 L.Ed. 1024, it is extraordinarily difficult to achieve the jurisdictional amount, for what must be shown is not the ultimate gross, but the present discounted value of the future payments. See Pinkston, ante, 293 U.S. at 101, 55 S.Ct. 1. For such a value to exceed $10,000, using the Massachusetts legal interest rate of 6% for discounting purposes, we should have to indulge every assumption in favor of plaintiff: that the mortgage will not be paid up during the entire remaining 16-year period of the minority of her 4-year old child; that the child will remain a dependent and plaintiff will recover AFDC payments all through this period.

The Merits

Even if we were to assume for present purposes that some jurisdictional basis for plaintiff’s statutory claim could be found, we would nevertheless be forced to conclude that her claim must fail on the merits. For although we may agree with the district court that the mortgage payments here involved could not appropriately be considered “income” to the plaintiff under Social Security Act § 402(a)(7), 42 U.S.C. § 602(a)(7), and its corresponding regulation, 45 C.F.R. § 233.20(a) (3) (ii) (c), we cannot accept its further conclusion that those payments do not constitute a “currently available resource.” Id.

The district court ruled that to qualify as “currently available” within the meaning of the Act and regulation, a resource “must be in hand, readily liquidated, or under the control of the individual.” However, the cases relied upon by the court for formulation of its standard, Green v. Barnes, 10 Cir., 1973, 485 F.2d 242; Wilczynski v. Harder, D. Conn., 1971, 323 F.Supp. 509, are not directly in point, and certainly do not compel the conclusion that a resource may not permissibly have a broader definition.

Although the legislative history of the Act is not particularly helpful in this respect, we believe that to qualify as a currently available resource under the Act and regulation, it need only be shown that regular payments made by third parties directly benefit an AFDC recipient in such a manner that they are actually used to defray expenses which such recipient would otherwise incur. Cf. Cooper v. Carleson, 1973, 31 Cal.App. 2d 546, 107 Cal.Rptr. 502. In our view, such a showing has been sufficiently made here. The mortgage payments made by plaintiff’s spouse directly to the mortgagee, pursuant to the probate court decree, though insufficient to meet the required monthly amount, nonetheless directly benefit plaintiff by reducing her necessary housing costs. Such a resource is “current” in the sense that its continued payment is guaranteed and enforceable. And it is “available” in the sense that such sums do actually reduce expenses for which plaintiff would otherwise be liable.

Plaintiff overstates her true claim when she says she is obliged to pay $84 a month to live in the family house. While this is true if her only option is to live in that house or nowhere, the Department has no reason to assume that the probate court would not require her husband to contribute to her housing if she lived somewhere else. Nor should the Department be under a duty to inquire on a case by case basis, either as to this issue, or to the precise proportion that a husband’s payment goes to maintain the house as distinguished from recovering the equity from the mortgagee as a capital asset. It must be enough for the administration of so broad reaching an enterprise as AFDC that the Department establish reasonable regulations that admit of ready application.

Therefore, we bélieve that these payments could legitimately be considered a “currently available resource” under 45 C.F.R. § 233.20(a) (3) (ii)(c), and thus may properly be taken into consideration in determining the plaintiff’s actual budgetary needs. 42 U.S.C. § 602(a) (7).

Reversed and remanded with instructions to dismiss the complaint.

      . Appellants include Steven A. Minter, the Commissioner of the Massachusetts Department of Public Welfare, and his immediate superior, Peter Goldmark, the Secretary of the Massachusetts Executive Office of Home Services.

      . Following a determination that a particular individual is eligible for Aid to Families with Dependent Children (AFDC), the Department is obligated to determine a basic family budget based upon the recipient’s need. 42 U.S.C. § 602(a) (7) ; Massachusetts Public Assistance Policy Manual (MPAPM), c. IV, § A, pt. 1, p. 1 (rev. 1972). Such a determination is made in accordance with general departmental assistance tables which reflect, in specific dollar amounts, estimated family requirements as they relate to varying living arrangements and family size. MPAPM, c. IV, § A, pt. 1, p. 9 (rev. 1970). Based on their particular circumstances, these tables indicate that plaintiff and her two minor children would normally be entitled to $217.-60 in monthly benefits, of which $103 would constitute their basic shelter allowance.

      . The mortgage on the house, owned by plaintiff and her spouse as tenants by the entirety, required total monthly payments of $184. Although not challenging the Department’s right to determine her fixed maximum housing allowance at $103, plaintiff asserted that since her husband’s $100 monthly mortgage payments may not be properly applied as a pro tanto offset, the Department remained bound to supply her actual shelter needs up to the $103 level. In her situation, since the remaining mortgage was $84 per month, the plaintiff conceded that, under her theory, the Department was liable to make available only that amount. The Department asserted that its liability, after applying the husband’s payments, was only $3 per month.

      . Social Security Act § 402(a)(7), codified as 42 U.S.C. § 602(a)(7), provides in relevant part:
      “[E]xcept as may otherwise be provided in clause (8), . . . the State agency shall, in determining need, take into consideration any other income and resources of any child or relative claiming aid to families with dependent children, or of any other individual (living in the same home as such child and relative) whose needs the State agency determines should be considered in determining the need of the child or relative claiming such aid, as well as any expenses reasonably attributable to the earning of any such income.”

      . Nothing the Supreme Court has recently said in Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974) convinces us that plaintiff’s constitutional claims are substantial. In Sagans, the Court, applying the traditional substantiality test to an entirely different set of contentions, concluded that such contentions were sufficient to permit consideration of the pendent statutory claim. While the Court may have taken a particularly broad view toward measuring what claims are substantial, see 94 S.Ct. 1386 (Rehnquist, J., dissenting), we nonetheless believe that if the substantiality doctrine is to be given any meaning whatsoever, the claims offered by plaintiff in the instant action cannot be said to be adequate.

      . In Bomar v. Keyes, 2 Cir., 1947, 162 F.2d 136, cert, denied 332 U.S. 825, 68 S.Ct. 166, 92 L.Ed. 400, jurisdiction was exercised over a statutory claim solely because it fell within the scope of what is now section 1983, but in that case the question of section 1343 jurisdiction was apparently not considered. When the Second Circuit later did consider it, it rejected the argument that the two sections are coextensive. McCall v. Shapiro, ante; Aguayo v. Richardson, ante.


author: CUMMINGS, Circuit Judge. JULIUS J. HOFFMAN, Senior District Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Tommy Wayne MILLER, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Jack ATKINS, a/k/a Jack Tippitt, Defendant-Appellant.
    Nos. 73-1866, 73-1868.
    United States Court of Appeals, Seventh Circuit.
    Heard Jan. 24, 1974.
    Decided April 12, 1974.
    Cornelius Thomas Ducey, Jr., Belleville, Ill., Lehman D. Krause, E. St. Louis, Ill., for defendants-appellants.
    Henry A. Schwarz, U. S. Atty., William C. Evers, III, Asst. U. S. Atty., E. St. Louis, Ill., for plaintiff-appellee.
    Before KILEY, Senior Circuit Judge, CUMMINGS, Circuit Judge, and HOFFMAN, Senior District Judge.

       Senior District Judge Julius J. Hoffman of the Northern District of Illinois is sitting by designation.

   CUMMINGS, Circuit Judge.

In No. 73-1866, defendant Miller pleaded guilty to a violation of the Dyer Act (18 U.S.C. § 2312). The district court ordered that a presentence investigation be conducted, and the prior criminal record portion of the ensuing presen-tence report was sent to defense counsel. Prior to sentencing, defendant filed a motion requesting permission to examine the entire presentence report on the ground that he could not otherwise “receive a fair sentence.” At the time of sentencing, this motion was denied.

At the sentencing hearing, defense counsel explained that defendant had advised that several matters in the prior record portion of the presentence report were false. The district judge thereupon said that it was his regular custom not to deliver any portion of a presen-tence report except the prior record, stating “that would jeopardize a lot of sources of information if this was revealed * * and that “we would try every issue of this man’s life all over again on the presentence report * * While the judge said he did not rely entirely on the custom, his only comment on the specifics of this case made clear that he simply considered the case to be an example of the reason for his custom. He did not really consider deviating from the custom. Defendant addressed the district judge and stated that the description of the drowning of his girl friend in the prior record portion of the presentence report was incorrect; defendant then gave his version of the incident. He mentioned that he was currently in a Texas state penitentiary serving an 8-year sentence for a drugstore burglary. Although the prior record portion of the presentence report said that as many as 13 burglary charges were being processed against defendant, he claimed that the drugstore burglary was the only one of which he was accused.

Without revealing any of the contents of the other sections of the presentence report, the district judge thereupon sentenced defendant to five years to be served concurrently with his Texas sentence. This appeal attacks the district judge’s uniform policy not to reveal the contents of a presentence report except for the prior record portion.

In the related appeal in No. 73-1868, defendant Atkins pleaded guilty to Count I of an indictment charging him with distributing .46 gram net weight of heroin in violation of 21 U.S.C. § 841(a)(1). The remaining three counts were dismissed by the Government. Prior to sentencing, Atkins’ counsel filed a motion for leave to examine the pre-sentence report. At the sentencing hearing, he explained that he filed the motion because he was led to believe that there were certain material facts in the presentence report that were not “actually the situation,” so that he might wish to present evidence to refute some of the major allegations in the report. As in Miller’s case, defense counsel had only been furnished with'a copy of that portion of the presentence report containing Atkins’ prior record. The same district judge reiterated his policy not to reveal any portion of the presen-tence report except for the prior record. Before sentence was imposed, Atkins’ counsel emphasized that the four pages of prior record in the presentence report revealed only arrests. There was then this exchange:

“THE COURT: You don’t believe that where there’s smoke there’s fire?
“MR. DUCEY: Well, I hope the Court doesn’t necessarily believe that, because the Court should only go by what has been shown, what convictions .
“THE COURT: Well, I go by the whole thing, Mr. Ducey, the whole ball of wax, not one thing. His past record is just one item.”

Before imposing a 5-year sentence, the district judge remarked that he knew Atkins was an addict and had sold drugs to get money and feed his own habit, although the court was unsure “that was the sole reason for you to do it.” The district judge also thought that defendant might not be rehabilitable because he had been hospitalized several times for drug addiction.

In both appeals, the question before us is whether Rule 32(c)(2) of the Federal Rules of Criminal Procedure permits a district court to maintain a uniform policy of never disclosing information in a presentence report apart from the prior record portion thereof. That rule provides:

“The report of the presentence investigation shall contain any prior criminal record of the defendant and such information about his characteristics, his financial condition and the circumstances affecting his behavior as may be helpful in imposing sentence or in granting probation or in the correctional treatment of the defendant, and such other information as may be required by the Court. The court before imposing sentence may disclose to the defendant or his counsel all or part of the material contained in the report of the presentence investigation and afford an opportunity to the defendant or his counsel to comment thereon. Any material disclosed to the defendant or his counsel shall also be disclosed to the attorney for the government.” (Italics supplied.)

The last two sentences of this rule were added by amendment in 1966. The Advisory Committee’s note explained that although disclosure is not made mandatory,

“It is hoped that courts will make increasing use of their discretion to disclose so that defendants generally may be given full opportunity to rebut or explain facts in presentence reports which will be material factors in determining sentences.”

As noted in 8A Moore’s Federal Practice (2d ed. 1973) j[ 32.03 [4], “the principal argument against disclosure is that it will discourage frank cooperation of those with knowledge of the offender and thus dry up the investigator’s sources of information.” Pp. 32-37. The Advisory Committee and the Supreme Court considered this, but the amendment was nevertheless adopted to encourage disclosures. 2 Wright, Federal Practice and Procedure: Criminal § 524 at 400 (1969).

We of course agree that because of its confidential nature, the entire presentence report need not be made available to counsel or made part of the record. However, discretion in deciding what to disclose must be exercised on a case-by-ease basis. In fairness to the parties, a district court should hereafter state any grounds in the presentence report motivating the imposition of the sentence. To avoid reliance upon critical misinformation in the report which the defendant has had no opportunity to contradict or explain, if the judge regards any information in the presentence report as sufficiently important to affect the sentence, the substance of that information should be disclosed to the defendant or his counsel before sentence is pronounced. If the trial judge denies a motion seeking access to a presentence report, he should henceforth make it clear that his sentence determination is not predicated on the contents of the report or describe the substance of any matter he considers significant. This will avoid the kind of error exemplified by Townsend v. Burke, 334 U.S. 736, 68 S.Ct. 1252, 92 L.Ed. 1690; United States ex rel. Jackson v. Myers, 374 F.2d 707 (3d Cir. 1967); State v. Killian, 91 Ariz. 140, 370 P.2d 287 (1962); State v. Pohlabel, 61 N.J.Super. 242, 160 A.2d 647 (App.Div.1960).

We do not say the sentencing judge must always make these disclosures, for there may be exceptional cases which would justify deviation from the foregoing approach. For example, a district judge may find in a particular case that if a certain material item is disclosed, defendant would inevitably know who provided that information, and that there are compelling reasons for hiding the identity of the informant. In such a case, the district judge might choose not to disclose the item, but if so, he should discount his reliance on the information to allow for its lesser reliability. The discretion vested in the district judge by Rule 32(c)(2) allows him to determine a proper procedure for such exceptional eases, which should be rare, and to decide what information in the presentence report is important enough to affect the sentence.

In holding that district judges must abandon any policies of nondisclosure and exercise their discretion under Rule 32(c)(2) in a manner consistent with the purpose of informed sentencing, we are confident that they will be able to protect informants and other confidential matters so that probation officers’ sources of information will not be cut off. Although the district judge in these cases feared that disclosure would lead to lengthy trial-type proceedings at the sentencing stage, this opinion does not modify his power to limit the evidence taken on collateral issues. In its notes to its 1970 draft of proposed rule amendments, the Advisory Committee reported: “Experience in jurisdictions which require disclosure does not lend support to the argument that disclosure will result in less complete presentence reports or the argument that sentencing procedures will become unnecessarily protracted.”

The rule established herein is not foreclosed by any previous decision of this Court. Thus in United States v. Humphreys, 457 F.2d 242 (7th Cir. 1972), the Government’s principal case, we said that the “need for disclosure” was “obviated” because the defendant was given great latitude in presenting a true picture of his character at a daylong hearing before the trial court. The case Judge Duffy cited for his discussion of the fear that disclosure might dry up sources of information was Baker v. United States, 388 F.2d 931, 933 (4th Cir. 1968), where the court vacated a sentence and remanded because the defendant’s counsel had only been permitted partial access to the presen-tence report. There the court outlined the minimum disclosure permitted under the facts of the case, stating that the “extent of a fair disclosure may be greater in other circumstances.” The Baker court rejected the district judge’s view that as a matter of law he was under no duty to disclose any portion of the report.

In United States v. Trigg, 392 F.2d 860, 864 (7th Cir. 1968), certiorari denied, 391 U.S. 961, 88 S.Ct. 1863, 20 L. Ed.2d 874, we did not require access to the presentence report because the unfavorable matters were disclosed by the prosecution in its recommendations to the court, except for a state court conviction which the district court itself disclosed.

The Government also relies on United States v. Greathouse, 484 F.2d 805, 807 (7th Cir. 1973). There defendant argued that she should have been given co-defendant Greene’s presentence report for use in impeaching his testimony. But she had not asked to see the report at trial, and we held that “the report’s negligent suppression would not warrant reversal.” We also noted that the trial court had explicitly found Greene to be a “pathological liar,” so that further impeachment in Greathouse’s bench trial was unnecessary.

The statement in United States v. White, 382 F.2d 445, 449 (7th Cir. 1967), that “we are willing to rely upon the discretion of the district judge in considering a presentence report * * * without requiring that the particular facts bearing upon the exercise of his discretion be disclosed,” was incidental to the double jeopardy issue on which that opinion focused. In that context, it has been overruled by North Carolina v. Pearce, 395 U.S. 711, 723, 89 S.Ct. 2072, 23 L.Ed.2d 656, and we no longer consider the quoted sentence to be binding.

United States v. Solomon, 422 F.2d 1110, 1119-1121 (7th Cir. 1970), certiorari denied sub nom. Sommer v. United States, 399 U.S. 911, 90 S.Ct. 2201, 26 L.Ed.2d 565, supports our result. There we dealt with a confidential memorandum prepared by the prosecutor and dealing with the defendant, which was submitted to the district court without any disclosure of its contents to defense counsel. After citing Rule 32(e)(2), we declared (422 F.2d at p. 1121):

“Hereafter in this Circuit, however, a trial court shall not consider in camera a prosecutor’s report about a defendant prior to sentencing or ruling on post-conviction motions unless the pertinent factual information is summarized for or disclosed to defense counsel with appropriate safeguards.”

Due to his adversary role, the need for disclosure of a prosecutor’s report is greater than the need for a probation officer’s report. But the need to protect sources of information is analogous, as is the effect of any errors in the report. We therefore conclude that defendants should normally, subject to the guidelines hereinbefore set out, be advised of material portions of the presentenee report. Sentences vacated and eases remanded for further proceedings consistent with this opinion.

JULIUS J. HOFFMAN, Senior District Judge.

I respectfully dissent.

Under the current provisions of Rule 32(c), a convicted defendant has no right to have a presentence report prepared, and in the event one is prepared, the district judge is not required to divulge its contents. Furthermore, a judge’s reliance upon a presentence report without disclosing its contents or allowing rebuttal is not a denial of due process. Williams v. New York, 337 U.S. 241, 69 S.Ct. 1079, 93 L.Ed. 1337 (1949); Williams v. Oklahoma, 358 U.S. 576, 79 S. Ct. 421, 3 L.Ed.2d 516 (1959).

Disclosure, therefore, involves policy, and whether as a matter of policy the defendant should be accorded some opportunity to see and refute allegations made in a presentence report has been a subject of considerable controversy. See Notes of Advisory Committee on Rules, Fed.R.Crim.P. rule 32, 18 U.S.C.A., Supplementary Pamphlet 1961-70. The practice in federal courts is mixed, with a substantial minority of judges permitting disclosure while most deny it. See survey prepared for the Judicial Conference of the District of Columbia, as reported in Conference Papers on Discovery in Federal Criminal Cases, 33 F.R.D. 101, 125-127 (1963). See also Grone-wold, Presentence Investigation Practices in the Federal Probation System, Fed. Prob., Sept. 1958, pp. 27, 31.

As submitted to the Supreme Court by the Advisory Committee, the 1944 draft of the Criminal Rules provided that the presentence report should be made available to attorneys, parties, and such other persons as the court might designate. In adopting the rules, the Supreme Court struck this provision, and Rule 32(c) was then silent on the point. Thereafter, the courts construed Rule 32(c) to mean that the presentence report was a confidential document that need not be made available to the defendant, and that there was no obligation to allow the defendant to contradict or rebut the findings of the court. See Wright, Federal Practice and Procedure: Criminal § 524, pp. 394-395, Note 44 and cases cited in Notes 45 and 46.

On February 28, 1966, Rule 32(c)(2) was amended by adding the following provision:

“The court before imposing sentence may disclose to the defendant or his counsel all or part of the material contained in the report of the presentence investigation and afford an opportunity to the defendant or his counsel to comment thereon.”

Although, as this Court suggests, the amendment may have been adopted to encourage disclosure, it is clear that the Supreme Court did not make disclosure mandatory, perhaps because of the obvious necessity for a case-by-case approach in sentencing. The dissolution of the draft amendment in the forms proposed by the Advisory Committee in 1962 and 1964 lends credence to the relative importance of the latter observation. In any event, under Rule 32(c) (2) as finally amended, the district court retained discretion to decide whether disclosure is in fact necessary.

Turning to the present appeals, the Court’s opinion would be substantially meaningless (in the current body of law) unless the statement that

“a district court should hereafter state any grounds in the presentence report motivating the imposition of the sentence”

is seen as mandating that such matters must (not “may”) be disclosed to the defendant. Again, in the judgment of the Supreme Court, reasons such as the ones advanced in this Court’s opinion have not been deemed sufficient to make disclosure mandatory. Furthermore, the Court states that

“[i]f the trial judge denies a motion seeking access to a presentenee report, he should henceforth make it clear that his sentence determination is not predicated on the contents of the report or describe the substance of any matter he considers significant.”

This too must be seen in its mandatory context. If the trial judge’s determination is predicated on the contents of the report, the third clause of this statement would require him to disclose those matters which influenced that determination.

In my opinion, it is not this Court’s responsibility to determine policy on disclosure. Formulating and urging reforms in the Criminal Rules is the prime function of the Supreme Court’s Advisory Committee on Rules. The means of accomplishing that which the Court here seeks to establish is by Supreme Court adoption of an amendment to the Rules. In fact, the result which this Court seeks would come about immediately (by way of existing due process) upon provision by the Supreme Court of the right to disclosure. To date, however, the Supreme Court has declined to provide that right.

Accordingly, I would affirm the district judge’s rulings denying defendants’ motions which sought disclosure of the entire contents of the presentence reports.

      . Recommendations that, with safeguards, the reports he disclosed to the defense are contained in American Bar Association Standards Relating to Sentencing Alternatives and Procedures § 4.4 (Approved Draft 1968) ; American Law Institute, Model Penal Code § 7.07(5) (P.O.D.1962) ; National Council on Crime and Delinquency, Model Sentencing Act § 4 (1963) ; President’s Commission on Law Enforcement and Administration of Justice, The Challenge of Crime in a Free Society 145 (1967) ; Lehrich, The Use and Disclosure of Presentence Reports in the United States, 47 F.R.D. 225, 252 (1969) ; Advisory Committee on Criminal Rules, 1970 Preliminary Draft of Proposed Amendments, reproduced at 8A Moore’s Federal Practice (2d ed. 1973), U 32.03 [4], n. 32.21. The Advisory Committee’s proposal has been adopted by the Second Circuit’s Judicial Council in an unpublished resolution. In this Circuit, we are advised by the minutes of the February 4, 1974, meeting of Chief Judges of this Circuit that some district judges disclose the presentence report and others do not.

      . See United States v. Powell, 487 F.2d 325 (4th Cir. 1973); United States v. Espinoza, 481 F.2d 553 (5th Cir. 1973); United States v. Brown, 470 F.2d 285 (2d Cir. 1972); United States v. Bryant, 143 U.S.App.D.C. 53, 442 F.2d 775 (1971); United States v. White, 382 F.2d 445, 450 (7th Cir. 1967; dissenting opinion).

      . This opinion and the dissent thereto have been circulated to all judges in regular active service; no judge has requested that the cases be reheard en banc.

      . Fed.R.Crim.P. 32(c)
      (1) When Made. The probation service of the court shall make a presentence investigation and report to the court before the imposition of sentence or the granting of probation unless the court otherwise directs. * * * *

      . Fed.R.Crim.P. 32(c)(2).

      . As proposed in 1962, the amendment would have made it mandatory to disclose a summary of the information in the report. See Preliminary Draft of Proposed Amendments to Rules of Criminal Procedure, December 1962, p. 25.

      . As proposed in 1964, the amendment would have given counsel for the defendant an absolute right to read the report (from which sources of confidential information could he excluded) and to comment thereon. See Second Preliminary Draft of Proposed Amendments to Rules of Criminal Procedure, March 1964, pp. 39 — 40.