Wednesday, April 27, 2005
Does a Corporation's Former Lawyer Have a Conflict of Interest in Representing Former Executives in a Criminal Prosecution?
An interesting article in The Business Journal of Kansas City (here) discusses the U.S Attorney's attempt to disqualify an attorney in the prosecution of former Westar CEO David Wittig and executive vice president Douglas Lake. The charges involve alleged misconduct by the defendants in misusing corporate assets and structuring transactions to benefit themselves. The first trial of Wittig and Lake ended in a mistrial last December, and approximately a month ago Lake hired Nick Badgerow to join his defense team. Westar's general counsel wrote a letter to Badgerow raising questions about whether privileged or confidential information might be used by him in the defense of his new client. Badgerow had representing the company in litigation against another attorney on an issue that came up during the first trial, and the charges involve the executives' conduct while they employees of the company, Badgerow's former client. Just to make things more complicated, Westar is paying the attorneys fees for Wittig and Lake, although there is a pending arbitration about the company's duty to pay those expenses.
District judges are usually quite wary of conflicts that might taint a conviction, but do not always accede to the government's requests to remove counsel. Lake has agreed to waive an ineffective assistance of counsel claim he might have against Badgerow if he is convicted (see Business Journal of Kansas City story here), but courts are generally unwilling to accept a blanket waiver in advance, which can always be attacked later on the ground that the defendant was not adequately informed of the scope of the waiver. The standard for removal of defense counsel for a potential conflict of interest under Wheat is quite deferential to the district court, and a decision to disqualify counsel cannot be appealed until after a conviction, and even then the claim rarely is successful. The relationship between the defendant's and the district judge has become quite contentious, with a writ of mandamus being filed with the Tenth Circuit seeking to force the judge to recuse herself. The second trial is scheduled to start in May. Thanks to the Legal Ethics Forum (here) for highlighting the case.