Monday, October 17, 2005

DOJ & Serono - Agreement

According to a DOJ press speech here, the government and Serono Labs (Swiss Company with U.S. subsidiaries) have reached an agreement where "Serono will pay to the Medicaid program hundreds of millions of dollars it collected through the fraudulent marketing and sale of a drug called Serostim." Serostism assisted with weight loss resulting from AIDS.  Attorney General Alberto Gonzalez stated:

"When the demand for the drug Serostim began to wane, Serono put a fraudulent marketing and promotion campaign into high gear. It introduced unapproved computer software that helped increase the diagnosis of the AIDS wasting condition – and thus artificially increased the market for Serostim. It also offered financial incentives to doctors -- such as all-expense paid trips to Cannes, France -- in return for their prescribing a certain amount of the expensive drug. Such incentives are illegal and dangerous because they interfere with how doctors exercise their medical judgments in deciding on the best treatments and care for their patients."

The settlement provides that:

"Serono Labs has agreed to plead guilty to two counts of criminal conspiracy and resolve civil liabilities in connection with several illegal schemes. Serono will pay more than 704 million dollars in fines and damages and they have agreed to the terms of a sweeping corporate compliance program that will ensure this illegal activity does not occur again in the future."

It sounds like the company was prepared for a hefty fine as Serono's press release states that:

"In April 2005, the company announced that it had taken a $725 million provision to cover the settlement and related costs. The provision, which was recorded as an exceptional charge in the company’s earnings report for the first quarter of 2005, will be sufficient to cover the comprehensive settlements and related costs. The comprehensive settlements also include a Corporate Integrity Agreement, administered through the Office of the Inspector General."

(esp)

October 17, 2005 in Civil Enforcement, Fraud, International, Prosecutions, Settlement | Permalink | TrackBack (0)

DeLay Could Have Taken a Misdemeanor

According to the Houston Chronicle (AP) here, Tom DeLay could have accepted a plea to a misdemeanor.  If he had taken the plea he would not have needed to relinquish his seat as majority House leader.  DeLay must obviously think he can be successful in front of a jury.  Timing of the trial may be problematic as his two co-defendants are not as anxious as him to proceed to trial. The trial court could grant DeLay a severance from the trial of the two co-defendants others in order that DeLay go to trial while the other co-defendants pursue an appellate issue. On the other hand, the court might find the severance unnecessary. The key question will be whether DeLay will be as confident after the prosecution has presented its case in chief.

(esp)

October 17, 2005 in Prosecutions | Permalink | TrackBack (0)

"Don't Go There"

One aspect of New York Times reporter Judith Miller's case, presented in great (although sometimes slippery) detail in the newspaper (here), includes some hotly disputed interchanges in 2004 between Joseph Tate, the lawyer for the Vice President's chief of staff, I. Lewis Libby, and Miller's then-lawyer, Floyd Abrams.  According to the Times, Tate described to Abrams part of Libby's grand jury testimony in which Libby said he did not give Miller the name or status of Valerie Plame as a CIA operative.  According to Miller, Abrams told her that when he told Tate that there could be no assurances that Miller's testimony would be consistent with Libby's, Tate allegedly responded "Don't go there, or, we don't want you there."  Special prosecutor Patrick Fitzgerald ultimately examined Miller about whether she believed Libby wanted her to conform her testimony to his.

The role of the lawyers has been crucial in the investigation.  Miller's new lawyer, Robert Bennett (former lawyer for President Bill Clinton in the infamous Paula Jones deposition), negotiated her release after Libby provided assurances of his waiver of confidentiality.  Fitzgerald even played a key role in that process, sending a letter to Tate stating that any contact with Bennett regarding Miller testifying (or not) would not be viewed as being an obstruction of justice.  But, could Miller's (and Abrams') recitation of the conduct of Tate -- who vehemently denies telling Abrams "Don't go there" or even implying that --constitute obstruction of justice?  Interestingly, lawyers receive special treatment under the obstruction of justice statutes because legal counseling can often involve telling a client to do things that could be viewed as impeding an investigation.  18 U.S.C. Sec. 1515(c) (here) provides: "This chapter does not prohibit or punish the providing of lawful, bona fide, legal representation services in connection with or anticipation of an official proceeding."  Tate's statement, if made to Abrams, would likely fall within the "safe harbor" as bona fide legal services.  "Don't go there" is not a request that Miller change her testimony, and "we don't want you there" is even vaguer.  Communicating with a lawyer, and not the witness, would likely take the conduct even further away from obstruction, unlike a case where a lawyer meets with a witness and suggests testimony. 

In the hail of information on the investigation of the Plame leak, it is getting more difficult to separate out who said what to whom, and when.  Ultimately, that's the challenge that Fitzgerald and his staff faces in deciding whether there has been any criminal conduct that can be proven. (ph)

October 17, 2005 in Grand Jury, Investigations, Media, Obstruction | Permalink | TrackBack (0)

Sunday, October 16, 2005

More on the Judith Miller Case

Some side-notes to the post below-

1. Judith Miller hires Robert Bennett.  The NY Times reports here that "Ms. Miller recalled Mr. Bennett saying while he signed on to her case: 'I don't want to represent a principle. I want to represent Judy Miller.'"  -  Is this a situation that the party needed private representation above and beyond the company lawyer?  Clearly Floyd Abrams is the "name" on First Amendment issues. 

2. Why are there so many misunderstandings?

       A. Judith Miller admits according to the NY Times that "W.M.D. - I got it totally wrong." (Id.)

       B. According to the NY Times article, Ms. Miller "'made a strong recommendation to my editor'  that an article be pursued. 'I was told no,' she said. She would not identify the editor."  But the NY Times story in the next sentence says that "Ms. Abramson, the Washington bureau chief at the time, said Ms. Miller never made any such recommendation." (Id.)

        C. According to the NY Times, after an article in the Washington Post about two officials in Washington releasing the name of Valerie Plame, "Ms. Abramson's successor as Washington bureau chief, asked Ms. Miller and other Times reporters whether they were among the six. Ms. Miller denied it." Did she not recall her conversations with Libby? Did she not consider herself part of the six, and if so, why not?

        D. She thought that Libby did not want her to testify, but Libby's attorney calls this according to the NY Times - "Outrageous." (Id.) It is apparent from this news report that Libby wanted her to testify. Instead she does 85 days later in jail. Is this a misunderstanding?  Is this a book in the making?  Do you really want to read this one?

3. Judith Miller in her article describing her testimony before the grand jury here states that "During the Iraq war, the Pentagon had given me clearance to see secret information as part of my assignment 'embedded' with a special military unit hunting for unconventional weapons."  Does it seem rather odd for the Pentagon to be given a clearance to a newspaper person? Should a newspaper person be accepting such clearance?  On one hand they can't report on it and on the other hand do they have a fiduciary duty to their paper and the public to report news?   If she had security clearance will this preclude a charge against Libby as he might have thought he was discussing confidential information with someone who had clearance? 

4.  And yes, Miller and Libby just happen to meet at a rodeo in Jackson Hole, Wyo. after a conference she attended in Aspen, Colorado - which by the way was on National Security. (Mapquest shows the distance from these two cities to be - 590.96 miles - not that this means anything). But I still don't understand Libby's reference in his letter to Miller that

"'Out West, where you vacation, the aspens will already be turning,' Mr. Libby wrote. 'They turn in clusters, because their roots connect them.'" 

Was her answer to Fitzgerald's question sufficient?  It seems likely he was looking for a secret code that might allow for an obstruction of justice charge against Libby.  Did Fitzgerald stop with the response reported by Judith Miller in her artticle, or did he ask some additional questions?  Blogsphere offers a good bit here and here on this line in the letter.

Miller was not able to take notes in the grand jury room so obviously she can't be expected to remember everything.  But I keep wondering  - what about the material not in her story about her grand jury testimony.   She was there for four hours - there must be more.  Are we getting the full story here?  And did any of the grand jurors ask questions, and what questions did they ask? And don't tell me I have to wait for the movie to come out.

I keep coming back to the place I started - - The bottom line is that someone leaked the name of a CIA agent.  That's serious and that's a problem. 

(esp)

October 16, 2005 in Media | Permalink | TrackBack (0)

What Does Patrick Fitzgerald Do Now?

Judith Miller, N.Y. Times reporter who spent 85 days in jail for what may now appear to be a misunderstanding about whether a source - I. Lewis "Scooter" Libby - had authorized her to disclose his name, now talks to the grand jury.  She spoke to Libby she says (see her NY Times story here), but she can't recall who gave her the name of Valerie Plame, reported on her notes as Valerie Flame.  And to top it off she states that "[m]y notes indicate that well before Mr. Wilson published his critique, Mr. Libby told me that Mr. Wilson's wife may have worked on unconventional weapons at the C.I.A."

She admits that she agreed to call Libby a "[f]ormer Hill staffer" as opposed to referring to him as "senior administration official." Id.  Does the press use the test of whether it is just "literally true?"

It sounds like a good number of people are not too happy with what has happened here:

1. Clearly Judith Miller, who just spent 85 days in jail and then had to face the NY Times staff with this change in event must be bothered by the situation.  Is this worth a book?

2. Probably Libby is not too happy with the revelation that he appears to be the cause of her not testifying, when he thought it clear his release had been given.  The last thing in the world he probably wanted was to have a prosecutor and grand jury think he was trying to hide something.

3. Probably the N.Y.Times, who has had to deal with this entire scenario are not to happy about this event.  (See Wall St Jrl. article here). And that's without even mentioning the attorney expense of the paper. (See Washington Post here)  Clearly this was a tough call for the press bosses - they want to show that they support their employees and will stand behind someone who is protecting sources, but is this the type of situation they really wanted to stand behind? Don Van Natta Jr., Adam Liptak, and Clifford J. Levy present a fair evaluation of this event in the NY Times here and one has to especially give them credit for presenting all perspectives including a quote from Jill Abramson, a managing editor, who when "[a]sked what she regretted about The Times's handling of the matter, . . .  said: 'The entire thing.'"  But also check out Greg Michell's take from Editor and Publisher Magazine here (linked from Romenesko on the Poynteronline site here).

But what does Patrick Fitzgerald, the prosecutor, do now?  The bottom line is that someone leaked the name of a CIA agent.  That's serious and that's a problem.

(esp)

October 16, 2005 in Investigations, Media | Permalink | TrackBack (0)

"Real Time Enforcement" - The New Prosecution Approach?

In the past white collar cases were noted for taking significant time for investigation and prosecution.  Long grand jury sessions would peruse documents and prosecutors would often spend time working up the ladder to eventually prosecute high-ups.

This may be changing in some parts of the country.  Noted in this post here , David Nahmias, the United States Attorney for the Northern District of Georgia,  used the term "real time enforcement. This can be considered a move in a direction toward proceeding with prosecutions at a quicker speed.

The Refco prosecutor may be taking this same posture. Michael J. Garcia, the U.S. Attorney for the Southern District of New York wasted little time in filing a complaint against the former CEO of Refco. (see here) Seldom do we see in a white collar case an individual being charged for alleged conduct occurring the year prior and the year of the charging document. (see DOJ Press Release here).  The Wall Street Journal here gives us some background on the prosecutor.

So is "real time enforcement" good in white collar cases? 

1.For one it treats the case more like a street crime case. Considering the recent sentences that work to bridging the gap between street crime and white collar, it seems justified to also treat the cases in a like manner in other stages of the process, not just the sentencing phase.

2.  It certainly places an incredible pressure on prosecutors to move faster in white collar matters and there may be more of an inclination to take "short cuts."  These "short cuts" might mean using charges like obstruction, false statements, and perjury as opposed to investigating the underlying conduct.

3.  From the defense perspective it has a benefit. For one the client is not left hanging for an inordinate amount of time, wondering if they will or will not be prosecuted.  It also puts the defense on equal footing come trial time.  In the past the prosecution may have worked to build up their case for years while the defense has only the short pre-trial time to investigate.  Having the prosecution proceed quicker with the white collar case will level the "playing field" come trial time.

(esp)

October 16, 2005 in Prosecutions | Permalink | TrackBack (0)