The U.S. Court of Appeals here yesterday set aside a lower court's 1975 ruling that awarded $903.232 in damages to a former Washington lobbyist whose hotel room was illegally bugged by the FBI.
In an unanimous opinion by a three-judge appellate panel, U.S. Circuit Judge Harold Laventhal ordered the lower court judge to conduct a secret examination of the FBI's files in the bugging to determine the lobbyist.
U.S. District Court Judge Charles R. Richey in his earlier decision had rejected the government's offer to secretly view the files. Rachey said the FBI's refusal to turn the files over to the lobbyist represented an admission by the agency that the documents supported the lobbyist's claims that the illegal bugging had ruined his reputation.
The rulings have been made in a 10-year-old suit brought by Fred B. Black Jr., a once-prominent lobbyist here who in the early 1960's reportedly had an annual income of more than $500,000 Black was a former business associate of former Senate aide Robert G. (Bobby) Baker.
Richey's ruling in January, 1975, marked the first time that the federal government had been ordered to pay damages resulting from as illegal surveillance. Yesterday's ruling by the appeals court did not change that basic premise of Richey's decision but said only that he should have reviewed the FBI's files before ruling and considered a lower damage award.
At the time of the ruling by Richey, Black pointed out that he probably would never see any of the money, since the governments has outstanding tax bills against him totaling about $900,000.
Black, 62, was working as a lobbyist in Washington when the FBI placed an illegal microphone in his suite at the Sheraton-Carlton Hotel on Feb. 7, 1963. The bug operated for 2 1/2 months and there have been reports that information gathered on the illegal tap, dealing with some of the country's highest political officials at the time, was disseminated to various law enforcement agencies.
Black was convicted of tax evasion in 1964, but was acquitted of the same charge two years later in a retrial after the the Justice Department disclosed the existence of the illegal microphone.
Black claims in his lawsuit that his current state of unemployment and record of business failures since his trials has been caused by dissemination of information gathered through the illegal bug.
The FBI contended before Richey that it had turned over to Black all of its files that were relevant to Black's claims, and that disclosure of the rest of its documents on the case would hamper the FBI's ability to gain information from confidential informants in future cases.
In claims of executive privilege filed with the judge, the FBI asked that he examine the files himself so he would be convinced that their claims were accurate. Richey rejected that request, saying, in part, "any evidence which concerns the government's illegal acts [is] not privileged."
Leventhal, in an opinion for himself and U.S. Circuit Judges Spottswood Robinson III and Malcolm R. Wilkey, said yesterday that the secret hearing by Judge Richey was necessary "to resolve the dispute."
Leventhal also suggested that the parties settle the case trather than have a new trial, pointing out that some "imperfect compromise might well be the least expensive and the most satisfactory solution for all concerned."