(dissenting).
While I am uncomfortable with the court’s holding that appellant, a college graduate and sophisticated businessman, did not waive his right to conflict-free counsel, I can see the value of generally requiring an on-the-record exchange between court and defendant. I can therefore accept the court’s holding on waiver.
My problem materializes when I consider the question of prejudice. The court’s opinion seizes on the decision not to call Louis Pallotta as sufficient evidence of prejudice to require a new trial. It notes appellant’s arguments that Pallotta would have corroborated appellant’s version of the loan transaction, rebutting his brother Peter, which would have been helpful; and that defense counsel refused to call Pallotta because cross-examination would elicit testimony damaging to Halloran.
The standard adopted by the court’s opinion is, to quote from United States v. Donahue, 560 F.2d 1039, 1045 (1st Cir. 1977), whether the action (i. e., calling Louis Pal-lotta as a witness) was “an alternate strategy [which] — whatever its ultimate merit— plainly existed.” The court’s opinion obviously assumed this standard was met.
The trial court, however, made these findings — that Louis Pallotta would be a liability to both appellant and Halloran; that Pallotta had made a prior statement to the FBI flatly contradicting any exculpatory testimony he might have given for the defense; that he had a lengthy psychiatric history including diagnosis as a paranoid schizophrenic; that Halloran ran less risk of embarrassment from Pallotta’s testifying, because of prior inconsistencies, than did appellant; that after a trial run at testifying Martorano’s lawyer thought Pallotta to be a “terrible witness”. The court concluded that “there is no reason in the world to speculate that separate counsel would have analyzed the potential impact of Louis Pal-lotta’s testimony any differently” than did appellant’s counsel.
These observations I think it important to note, are not evaluations of strategy, where our hindsight judgments might well be as valid as those of the trial court. They are the clearest indicia of the vulnerability of Pallotta’s credibility. I see absolutely no basis for disagreement with the trial judge and cannot see how the court can say: “We have no reason to doubt that calling him [Pallotta] would have been an acceptable risk.”
In short, I would hold that the government has more than adequately sustained its burden of demonstrating that “prejudice to the defendant was improbable”. United States v. Foster, 469 F.2d 1, 5 (1st Cir. 1972). It seems to me that the court, in holding that calling Louis Pallotta was a strategy that “plainly existed”, may well be taking too literally the caveat in Donahue, “whatever its ultimate merit”, and therefore is confusing the ability to articulate a strategy with a realistic chance to pursue one. Such a reading, of course, would entirely eviscerate the standard of probability of prejudice established in Foster. I fear that the court’s approach in this case comes too close to adopting a per se rule of prejudice in all cases where conflict is not waived.
ORDER OF COURT
A majority of the judges in regular active service on this Court having voted for a rehearing en banc,
The opinion of the Court filed . on December 6, 1979, is withdrawn and the judgment entered on said date is vacated;.
The petition for release on bail is denied; and
This case is assigned for rehearing en banc on Friday, February 1, 1980.