Burton v. United States is the name of two appeals to the Supreme Court of the United States by Senator Joseph R. Burton (R-KS) following his conviction for compensated representation of a party in a proceeding in which the United States was interested: Burton v. United States, 196 U.S. 283 (1905)Burton v. United States (Burton I), 196 U.S. 283 (1905). and Burton v. United States, 202 U.S. 344 (1906).Burton v. United States (Burton II), 202 U.S. 344 (1906). Burton was convicted of acting as counsel to Rialto Grain and Securities Company in the United States Postmaster General's investigation of Rialto for mail fraud.
On Burton's first appeal, the Supreme Court reversed his convictions because venue and vicinage could not be proper in the Eastern District of Missouri on the sole ground that Burton's bank sent the check to St. Louis after he cashed it. Further, the Court cited the prejudicial refusal of jury instructions. After Burton was retried and convicted, the Court affirmed, inter alia, on the ground that the agreement between Burton and Rialto had occurred in St. Louis.
Burton was the first defendant convicted under § 1782 of the Revised Statutes, 40 years after its 1864 enactment. Burton and his supporters argued that he was selectively prosecuted, on the orders of President Theodore Roosevelt, for political reasons. Burton also became the first member of the United States Senate to be convicted of public corruption, in fact the first member of the Senate to be convicted of any crime.United States Senate Historical Office, Expulsion and Censure. The next year, Senator John H. Mitchell (R-OR) was convicted under the same statute for his role in the Oregon land fraud scandal.Jerry A. O'Callaghan, Senator Mitchell and the Oregon Land Frauds, 1905, 21 255 (1952).
Background
Rialto Co.'s matter In 1872, Congress created the crime of mail fraud.Jed S. Rakoff, The Federal Mail Fraud Statute (Part I), 18 771 (1980). Rev. Stat. § 3929 authorized the United States Postmaster General, "upon evidence satisfactory to him" that mail fraud was being committed, to instruct the post master at the fraudster's local post office to return registered mail addressed to the fraudster to the sender with the word "Fraudulent" written or stamped on the envelope.Rev. Stat. § 3929. In 1895, this authority was extended to all mail.Act of Mar. 2, 1895, ch. 191, 26 Stat. 465; 28 Stat. 963, 964. Further, Rev. Stat. § 4041 authorized the Postmaster to also bar suspected fraudsters from cashing postal money orders.26 Stat. 465, 466 (codified at Rev. Stat. § 4041).
The Rialto Grain and Securities Company, whose principal place of business was in St. Louis, Missouri, was under investigation by the Postmaster for mail fraud.Burton II, 202 U.S. at 360–363. The Postmaster had received two complaints and forwarded them for investigation on November 7, 1902. State courts were also investigating complaints from investors against Rialto. Hugh C. Dennis, the President of Rialto, and other officers had been criminally indicted, but (at the time of Burton's indictment) none had been convicted. As of Burton's indictment, Dennis had been once acquitted in federal court and four indictments were pending against him in state courts. For a time, Rialto's offices had been closed due to a judicial attachment by its creditors.
Burton's representation
That same month—while the two were in Illinois, en route from St. Louis to Chicago—former state judge Thomas B. Harlan, the general counsel of Rialto, arranged to hire Senator Joseph R. Burton (R-KS), a lawyer, to appear before the Postmaster as counsel for Rialto in connection with these investigations for a monthly salary of $500.Burton II, 202 U.S. at 361–64, 382. When the general counsel returned to St. Louis on November 18, he communicated Burton's offer to Rialto and Rialto accepted.Burton II, 202 U.S. at 361–64, 382–83. Rialto notified Burton of its acceptance by telegram to him in Washington that same day.Burton II, 202 U.S. at 283.
Burton informed Rialto by mail that he had learned of the two complaints from the Postmaster, arranged for himself to be notified of any future complaints, and arranged to represent Rialto in a hearing before the Postmaster before any sanctions would issue. Burton continued to represent Rialto before the Postmaster, and draw his monthly salary, for five months.Burton II, 202 U.S. at 283–84. Burton's intervention was successful, and the Postmaster's investigation was ceased without the entry of a fraud order.Burton II, 202 U.S. at 363–64.
Rialto paid Burton by monthly checks for the first four months. Burton received the first check on November 22.Burton I, 196 U.S. at 285. Burton indorsed and deposited the checks at Riggs National Bank in Washington, D.C., which in turn sent the checks to Rialto's bank, the Commonwealth Trust Company in St. Louis, Missouri, for payment.Burton I, 196 U.S. at 296. The last $500 was paid in cash to Burton in person, at Rialto's office in St. Louis, on March 26, 1903, after which Burton's representation of Rialto terminated.Burton I, 196 U.S. at 283–84; Burton II, 202 U.S. at 364–65.
Indictment A federal grand jury in the United States District Court for the Eastern District of Missouri was already investigating the Brooks Brokerage Company, with which Dennis, the President of Rialto, was associated. Witnesses against Burton at the grand jury included Chief Post Office Inspector William E. Cochran, Dennis, and W.B. Mehaney, the Vice President of Rialto. About two weeks before Burton's indictment, the grand jury came into possession of the checks from Rialto to Burton.
Burton was indicted on January 24, 1904, in the Eastern District of Missouri, on nine counts of violating Rev. Stat. § 1782.Senator Burton Indicted, , Jan. 24, 1904. Section 1782 (enacted 1864) provided, in relevant part: No Senator . . . after his election and during his continuance in office . . . shall receive or agree to receive any compensation whatever, directly or indirectly, for any services rendered, or to be rendered, to any person, either by himself or another, in relation to any proceeding . . . controversy . . . or other matter or thing in which the United States is a party, or directly or indirectly interested, before any Department . . . whatever. Every person offending against this section shall be deemed guilty of a misdemeanor, and shall be imprisoned not more than two years, and fined not more than ten thousand dollars, and shall, moreover, by conviction therefor, be rendered forever thereafter incapable of holding any office of honor, trust, or profit under the Government of the United States.13 Stat. 123, ch. 119 (codified at Rev. Stat. § 1782). The current version of this statute is codified at 18 U.S.C. § 203.
The first and second counts of the indictment pertained to the receipt of the final cash payment from Rialto with reference to two separate interests of the United States.Burton II, 202 U.S. at 378. The third count pertained to receipt of the final cash payment from Mahaney. The sixth, seventh, eighth, and ninth counts of the indictment pertained to the receipt of the four check for the first four months.
Burton arguably could not have been arrested at the time of his indictment because Congress was in session. Article One provides that senators and representatives "shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same." art. I, § 6, cl. 1. But, Burton voluntarily surrendered. On January 24, Burton and his wife departed for St. Louis.Burton to Face Charges, , Jan. 24, 1904.
Trial and conviction
Judge Elmer B. Adams, sitting as the United States Circuit Court for the Eastern District of Missouri, presided over Burton's trial. Former state judge Chester H. Krum appeared as Burton's attorney. Assistant U.S. Attorney Horace Dyer acted as prosecutor.
In his opening statement, Krum argued that Burton had only agreed to act as general counsel and to allow his name to be placed in Rialto's literature and that the agreement explicitly provided that Burton would never represent Rialto before any federal agency.Senator Burton on Trial, , Mar. 23, 1904.
On March 23, the prosecution began its case in chief. Post Office Department employees identified the letters of complaint received against Rialto.Burton Wrote for Pay, , Mar. 23, 1904. Ernest H. Kastor, of a St. Louis advertising firm, testified that he introduced Burton to Dennis and Harlan in November 1902. Witnesses said that the agreement was as Krum described and that the pay was agreed as $2,500 in $500 installments. Dyer read into evidence the letter from Burton to Rialto.
The prosecution's case continued on March 24. Inspector Cochran testified that Burton had attempted to discuss the case with him the day his indictment was made public.Burton Needed $70,000, , Mar. 24, 1904. Cochran refused to discuss it. Reporter J.H. Aubere testified that he had interviewed Burton that day and that Burton had denied practicing before the Post Office. Hector McRea, the Controller of Rialto, testified to a meeting between Mahaney and Burton, where Burton's representation was ended because the matter before the Post Office had concluded. Inspector Cochran was recalled to state that his conversation with Burton took place before Aubere's interview. Further, Cochran testified that, on February 5, 1902, Burton had told him that he wished to represent Rialto before the Department for a fee, having been assured by other senators that such conduct was common and legal. Burton also told Cochran that he needed to repay a disputed debt of $70,000. Finally, Mahaney testified that, on the day he personally paid Burton $500, Burton advised Rialto to destroy its correspondence with him and that two such letters were destroyed. Thereafter, the prosecution rested.
The defense case commenced on March 25.Senator Burton Wanted to Build Up Practice, , Mar. 25, 1904. The third count of the indictment was quashed as duplicative with the first. Burton testified that he had accepted Rialto's employment due to personal financial reversals. Burton testified that his duties would include acting as a criminal defense attorney for Dennis, but would not include any activity in Washington. Burton testified that he received notice of his appointment from Harlan on November 20, 1902, and that he had only contacted the Post Office to notify them of his intent to defend Dennis in a criminal case. He explained that he only asked to be notified of complaints against Rialto so that he could terminate his association with them should any arise.
After the jury returned deadlocked 11-1, Judge Adams delivered an Allen charge. Soon afterwards, the jury returned a verdict that failed to address the third count in the indictment, so the Judge Allen ordered the jury to return to deliberations without reading the verdict. On March 28, 1904, after forty-one total hours of deliberation, the jury convicted Burton on five counts—counts one, two, six, eight, and nine—but acquitted on count three.Burton Is Guilty; Will Fight Verdict, , Mar. 28, 1904. Burton's convictions would have authorized a maximum sentence of 10 years imprisonment and a $50,000 fine.
Burton asked that the jury be polled, and each stated that the verdict was his own. Burton moved for a new trial. Judge Adams indicated that he would accept a supersedeas bond of $5,000, and Burton was not sentenced. Burton became the first defendant ever convicted under § 1782, more than 40 years after its enactment.