Thursday, July 26, 2007

NFL Hires Former Deputy Attorney General to Investigate the Vick Dogfighting Charge

The National Football League hired former Deputy Attorney General Eric Holder to conduct an investigation of the indictment of Atlanta Falcons QB Michael Vick on a conspiracy charge involving dog fighting on his property in Virginia.  NFL Commissioner Roger Goodell asked the team to withhold taking any punitive action against Vick until the League's investigation is complete.  Prior to his service as the DAG, Holder was the U.S. Attorney for the District of Columbia, and he's now a partner at Covington & Burling -- which happens to be the former law firm of Goodell's predecessor, Paul Tagliabue.  During his tenure at Main Justice, Holder got to affix his name to the first memorandum outlining the government's policy regarding charging corporations with crimes, the eponymous Holder Memo, that was subsequently supplanted by the Thompson Memo and the current McNulty Memo.  All three have generated significant controversy in the white collar crime world, although they are droplets compared to the almost daily coverage of the indictment of Vick and three others for conspiracy (see L.A. Times story here). 

An interesting question will be whether Vick's attorney will allow him to cooperate with Holder's investigation.  In baseball, former Senator George Mitchell's investigation of steroid use has been largely stymied by the refusal of players to meet with him, save Jason Giambi after his virtual admission to using performance-enhancing substances.  Unlike the baseball players, Vick is facing a federal charge that could land him in jail if he's convicted and would likely cost him a couple seasons out of the NFL.  Anything Vick might say to Holder would not be privileged, and federal prosecutors in all likelihood could obtain his statements for use against him at trial.  Is the NFL trying to set Vick up so that the League can suspend him for not cooperating, rather than barring him from playing because of a charge on which he has not been convicted and is presumed innocent, at least in the criminal proceeding?  The lack of cooperation could well be the easy way out for the NFL to get a player off the field who is bound to generate significant negative publicity.  For all you fantasy football players out there, don't look for Vick to play any time soon, although he may be worth a fourth or fifth round pick on the off-chance this gets resolved sooner rather than later. (ph)

July 26, 2007 in Investigations | Permalink | Comments (0) | TrackBack (0)

SEC Sues KLA-Tencor and Its Former CEO for Options Backdating

The SEC sued computer chipmaker KLA-Tencor and its former CEO for options backdating that occurred primarily from 1999 to 2002, although there is alleged to be one award in 2005.  The company settled the matter and, interestingly, there was no civil penalty and the allegations in the complaint (here) do not include any claims that the antifraud provisions were violated.  Unlike other companies that had to pay millions of dollars as part of the settlement, KLA-Tencor is getting off fairly lightly with only a "sin no more" injunction prohibiting future violations of the recordkeeping provisions.  Its former CEO, however, did not settle, and the SEC's separate complaint (here) against him alleges violations not only of the accounting and reporting requirements but also Rule 10b-5, the main antifraud provision.  According to the SEC Litigation Release (here):

[T]he Commission charges that he repeatedly engaged in backdating after becoming CEO in 1999, including pricing large awards of options to himself that were "in the money" by millions of dollars -- a potential windfall never disclosed to KLA-Tencor's shareholders. According to the complaint, Schroeder received a legal memorandum in March 2001 cautioning that "the Board and its committees are limited in their ability to grant options at a retroactive price without exposing the company to risk of an accounting charge." The memo further warned that "[a]ny attempt to set a price before such a grant is made raises substantial risks under securities and tax laws [and] accounting rules and gives rise to disclosure obligations." The Commission alleges that Schroeder nonetheless continued to backdate options.

The company disclosed in May 2006 (here) that it had received grand jury subpoenas from the U.S. Attorney's Offices in Brooklyn and San Francisco, and it's not clear which office is controlling the investigation and whether any criminal charges are likely to follow the SEC complaint.  (ph)

July 26, 2007 in Civil Enforcement, Securities, Settlement | Permalink | Comments (0) | TrackBack (0)

House Judiciary Committee Votes to Recommend Contempt

The House Judiciary Committee, in a party-line vote of 22 to 17, recommended to the full House that it pursue a contempt citation for former Counsel to the President Harriet Miers and former White House Chief of Staff Josh Bolten for their refusal to appear before the Committee to testify regarding the firing of nine U.S. Attorneys.  The Committee issued a 52-page report (available below) discussing the reason why their testimony was necessary for the investigation to justify the contempt recommendation.  The report recounts the information gathered to date regarding the dismissals in 2006 and seeks to refute the White House's position that the aides have an absolute immunity from being subpoenaed to testify before Congress.  The matter now moves to the full House, and all this is only a prelude to the issue whether a prosecutor will pursue the case if there is Congressional authorization of a contempt proceeding.  (ph)

Download house_judiciary_committee_contempt_memo_july_24_2007.pdf

July 26, 2007 in Prosecutors | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 25, 2007

Mediation -- That's What is Needed Here!

Is this not the classic case needing mediation?   

Congress needs to enforce its powers.  After all it is the legislature, and for many years the Courts have been giving deference to this branch of government.  Equally persuasive is that when an executive out and out defies the legislature's powers it needs to stand its ground.  So it is not surprising to see this Congressional committee move for contempt against White House Chief of Staff Josh Bolten and President Bush's former legal counselor Harriet Miers. (see WSJ AP here) (See Wash Po here)

And one would think that the Executive would want Congress to have oversight abilities.  After all this is a democracy with three equal branches of government. The perception of an executive that can do as it pleases would bring us back centuries.

But playing this scenario out presents some interesting questions:  if the full house votes for contempt and then it goes to the US Attorney for the District of Columbia, it seems likely he will have to recuse himself because of a conflict of interest.  And if eventually the matter does get presented what kind of result could be expected? Would the President pull a "Scooter" Libby on this one?  Could this be a situation of a lot of time and money spend on worthless acts?  This could go in circles for some time, and in part it is because we have a balanced system of government that is supposed to have three co-equal branches. 

So wouldn't mediation be a better solution here? Many have said that we need to incorporate alternative dispute resolution into our legal system.  Perhaps this might be a good time to start.

(esp)

July 25, 2007 in News | Permalink | Comments (1) | TrackBack (0)

Tuesday, July 24, 2007

Gonzales Raising More Concerns

Dan Eggen and Paul Kane, of the Washington Post, provide in-depth coverage of  Attorney General Alberto Gonzales' appearance before the U.S. Senate Judiciary Committee on the Oversight of the Department of Justice. (see here) The article contains a link to the transcript of the hearing. The conflict issue (see here)was one point of discussion and the Attorney General appropriately recognized his conflict in matters with the White House.  In response to questions by Senator Specter he stated:

"SPECTER: Thank you, Mr. Chairman.

Attorney General Gonzales, does Solicitor General Paul Clement now have the unquestioned authority to appoint a special prosecutor since you and the deputy attorney general are recused?

GONZALES: It would be his decision, yes.

SPECTER: Just to be abundantly clear, so that if a request were made to him to appoint special prosecutor to handle the contempt proceedings arising out of this entire matter, it would be his decision?

GONZALES: Yes.

SPECTER: His sole decision?

GONZALES: I would not be involved with it; neither would the deputy attorney general."

The hearing covered many different topics and many criticisms of the AG were voiced.  But Senator Specter's closing remarks were very telling when he asked the Attorney General to look at the low morale in the department and later stated in noting the OxyContin case (see here), "But it looks to me candidly, Attorney General Gonzales, as if the department's dysfunctional."

(esp)

July 24, 2007 in Prosecutors | Permalink | Comments (0) | TrackBack (0)

Bail Pending Appeal

Who gets bail, and who doesn't has certainly been a topic focused upon in recent days.  There is also the question of who is immediately taken from the courtroom upon conviction, and who has the benefit of reporting directly to the facility where the time will be served.  Recent years show that the answer to this question differs by judge, defendant, circumstances, and perhaps many unknown factors. For example, Jeffrey Skilling was denied bail pending appeal, so too for former Atlanta Mayor Bill Campbell.  Martha Stewart was allowed to remain free, but chose to do the sentence while the appeal was pending. And but for the President's commutation of "Scooter" Libby's sentence, he might have been off to prison very quickly. And then there was former HealthSouth CEO Richard Scrushy and former Alabama Governor Siegelman who were taken immediately from the courtroom into custody with bail denied. Unlike many white collar offenders they were not given the opportunity to report to the facility (see here).  The question now is what will happen to Conrad Black, and how about Former Qwest chief executive Joe Nacchio (see here).  Check out Doug Berman's Sentencing Law and Policy Blog where he discusses the bail issue in Nacchio and the recent addition to the legal team in the Conrad Black case.

(esp)

July 24, 2007 in Sentencing | Permalink | Comments (0) | TrackBack (0)

Two Republicans Under Looking Glass

The Wall Street Jrl reports of DOJ scrutiny facing Republican Representatives Don Young of Alaska and Senator Ted Stevens.

(esp)

July 24, 2007 in News | Permalink | Comments (0) | TrackBack (0)

Washington Legal Foundation Files Tort Action Claiming Malicious Prosecution

The Washington Legal Foundation (WLF) issued a press release telling of its filing of a federal lawsuit in  the Western District of Louisiana. The lawsuit alleges that the plaintiff was "maliciously prosecuting" by the government "for allegedly storing a hazardous substance without a permit from the Environmental Protection Agency (EPA)."

Press Release -

Download vidrine_v. US Press Release.pdf

Complaint -

Download original_complaint.pdf

(esp)

July 24, 2007 in Environment | Permalink | Comments (0) | TrackBack (0)

Monday, July 23, 2007

Is AG Gonzales a Responsible Corporate Officer?

Dan Eggen of the Washington Post tells of the showdown set for Wednesday - when the House Judiciary Committee will vote on whether Bolton and Miers should be held in contempt. (for background see here) But another aspect of this article also merits serious consideration.  The article states that "Gonzales says allegations that some of his aides used political considerations in hiring career employees were 'troubling to hear,' but he said he was staying in his job to initiate reform." 

Should Gonzales be held to the same standards that he holds CEOs of corporations?  Is he a responsible corporate officer?  And if he is, should he be held accountable for any wrongdoing that occurred under his administration?  Where was the compliance program to protect against wrongdoing?

(esp)

July 23, 2007 in Prosecutors | Permalink | Comments (0) | TrackBack (0)

Spitzer Spitzered

Improper use of State Police to secure information on his rival?  The New York Times reports on happenings in the Spitzer camp.  And the paper also reports on the quick action taken by Governor Spitzer in response to the report that questioned ethical practices by those around him. The question will be whether any possible improprieties in his office should have been monitored by him.  There will be no question that he responded immediately by taking action against individuals suspected of wrongdoing.  It is odd to see the tables turned with Spitzer who has been tough on so many, now having to face questions.

(esp)

July 23, 2007 in News | Permalink | Comments (0) | TrackBack (0)

Sunday, July 22, 2007

Identity Theft

A growing problem in the United States is identity theft. It is, therefore, good to see DOJ taking steps to combat this activity and to assist those who are victims of these crimes.  Late last week DOJ proposed "legislation that seeks to update and improve current laws aimed at protecting Americans from the increasingly sophisticated crime of identity theft."  The bill is titled the Identity Theft Enforcement and Restitution Act of 2007. According to a DOJ Press Release, one of the provisions  in the bill would allow for "victims of identity theft [to] recover the value of the time lost attempting to repair damage inflicted by identity theft." The Act also "would amend the identity theft and aggravated identity theft statutes" and "would add several new crimes to the list of aggravated identity theft offenses."

(esp)

July 22, 2007 in Computer Crime | Permalink | Comments (1) | TrackBack (0)

Police Indicted in Alleged Bribery Scheme

Two police officers in Larado were charged federally "by a Houston grand jury in a 53-count indictment with conspiracy to receive bribe money from the owners/operators of "eight-liner" gambling establishments engaged in illegal gambling activity in exchange for providing protection from law enforcement action." (See press release here).

(esp)

July 22, 2007 in Fraud | Permalink | Comments (0) | TrackBack (0)

Saturday, July 21, 2007

Executive Privilege or Presidential Stonewalling -But What About Ethics?

Washington Post writers Dan Eggen and Amy Goldstein set the stage of the controversy between Congress and the President in their article titled, "Broader Privilege Claimed in Firings." It is a legal dilemma that awaits resolution so that all can get to the bottom of what happened with the US Attorney "firings."  The issue is not that the President has the power to hire and fire United States Attorneys, but rather whether there was a impropriety in the criteria used with respect to the recent housecleaning.  And in the next few weeks, and perhaps months, it is likely that these two branches of government will be at odds in the battle of determining who will proceed with a contempt action, how it will be accomplished, and the method of doing it (all discussed in detail in the Washington Post piece).

But there is another level to this discussion that merits consideration.  Professional ethics for attorneys requires one to withdraw when he or she has a conflict of interest. It would seem that the DOJ has a conflict here and that they are not able to proceed on an action requested by Congress under law, and also promote an executive privilege claim that they contend is warranted here. They have an interest in this litigation and should be removed from proceeding.  But the real question is whether Attorney General Gonzales will let this happen.

(esp)

July 21, 2007 in Prosecutors | Permalink | Comments (0) | TrackBack (0)

Former Treasurer for Lockheed Martin Corporation’s Political Action Committee Pleads

A DOJ Press Release reports that "[a] former deputy manager and treasurer for Lockheed Martin Corporation’s political action committee has pleaded guilty to wire fraud and making false statements to the Federal Election Commission." The press release notes that the individual's  "duties included, among other things, preparing contribution checks for distribution to federal and state candidates, keeping track of disbursements and receipts within the computer system of the Lockheed Martin Employees’ Political Action Committee (Lockheed PAC), and making periodic required filings with the FEC on Lockheed PAC’s behalf."  Unfortunately, the DOJ press release states that this individual "developed a scheme whereby he took Lockheed PAC checks totaling approximately $160,000, and wrote the checks to himself instead of to federal political candidates or campaigns." 

(esp)

July 21, 2007 in Fraud | Permalink | Comments (0) | TrackBack (0)

Sentencing for Executives in Oxycotin Case

Wall Street Jrl reports that the three executives in the Oxycotin Case were given "three years’ probation and 400 hours each of community service in drug treatment programs."  For details see here.

(esp)

July 21, 2007 in Sentencing | Permalink | Comments (0) | TrackBack (0)

Friday, July 20, 2007

New Twist in the Case Against One of Stockman's Co-defendants

When David Stockman, the former Director of Management & Budget under President Ronald Reagan, was indicted, there were several co-defendants included in the indictment.  One of these co-defendants filed a motion this week asking for the recusal of the AUSA on the case. The motion discusses the breakdown in proffer negotiations with the government and asks for the recusal of the AUSA from this case "because her representation of the government at trial will violate the unsworn witness rule."  But the motion also raises a serious concern, and one that may become the focus of this case should it proceed to trial.  That issue may be whether the AUSA "threatened [the accused] with conviction and life imprisonment under the U.S. Sentencing Guidelines, specifically detailing how the Guidelines would be applied, if he did not plead guilty and cooperate against Co-defendant Stockman."  Whether there is merit to this allegation, and whether this warrants recusal, remains to be seen.

Motion here -

Download motion20to20recuse20ausa20cantwell.pdf

(esp)

July 20, 2007 in Prosecutions | Permalink | Comments (0) | TrackBack (0)

Thursday, July 19, 2007

Rove, Cheney, & Others Win Another Round One in Plame Matter

With the Libby commutation in hand, and no charges filed against any leakers in the Plame matter, the only remaining sign of the case was the civil action brought by Plame against several administration officials. And that too is now history as a result of the immunity provided to government officials.  The court dismissed Plame's lawsuit, noting its lack of jurisdiction. (See Washington Post)

So let me see if I understand the final results here. A prosecutor investigated the leak and indicted a senior level official on after-the-fact charges.  A jury convicted this individual, but the President commuted his sentence. Thus, the criminal process failed to ascertain who was responsible for the leak and the executive didn't seem to care.

And so the aggrieved party tried the civil process, but found that the executive has immunity.

And the executive is claiming executive privilege for certain former executive level employees who were called before Congress to testify about "firings" of US Attorneys.

I keep wondering how Alexis de Tocqueville  would have written this chapter in his book "Democracy in America."

(esp)

July 19, 2007 in Plame Investigation | Permalink | Comments (3) | TrackBack (0)

What Duke Cunningham Says

SanDiego.com (Copley News Service) has a fascinating piece discussing former Rep. Randy “Duke” Cunningham's interviews with the FBI.  The article has a sidebar that details the FBI interview. The comments following this article are also telling as many point out that this prosecution occurred in a place that suffered from an US Attorney "firing."

(esp)

July 19, 2007 in Corruption | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 18, 2007

Michael Vick Indicted on Conspiracy Charge Related to Dog-Fighting

Atlanta Falcons quarterback Michael Vick and three others were charged in a single-count indictment (here) in the Eastern District of Virginia with conspiracy to violate the Travel Act and the federal animal fighting statute in connection with a dog-fighting operation on Vick's property in Smithfield, VA.  According to a press release issued by the U.S. Attorney's Office:

[T]he defendants were involved in an ongoing animal fighting venture based out of a property located in Smithfield, Virginia, from early 2001 through on or about April 25, 2007. The property was purchased by Vick in June 2001. Since that time, the named defendants formed a dog fighting enterprise known as “Bad Newz Kennels” and used the property for housing and training pit bulls used in dog fights. From at least 2002, the defendants and others sponsored dog fights at the property, where participants and dogs traveled from South Carolina, North Carolina, Maryland, New York, Texas, Alabama, and other states to participate. Generally, only those accompanying the opposing kennels and “Bad Newz Kennels’” associates attended the fights. For a particular dog fight, the participants would establish a purse for the winning side, ranging from the hundreds to thousands of dollars. Participants and spectators would also place side-bets on the fight. The dog fight would last until the death or surrender ofthe losing dog. At the end of the fight, the losing dog was sometimes put to death by drowning, hanging, gunshot, electrocution, or another method.

In addition to the conspiracy charge, there is also a forfeiture count.  (ph)

July 18, 2007 in Prosecutions | Permalink | Comments (3) | TrackBack (0)

New Acting Deputy Attorney General Appointed

A press release of the Department of Justice reports that Craig S. Morford was appointed to the position of  Acting Deputy Attorney General at the Department of Justice, with the position to begin when Deputy Attorney General Paul J. McNulty departs the office. McNulty had announced his plans to leave the office during the summer. (see here) Morford presently serves as the U.S.Attorney for the Middle District of Tennessee.Morford has prior experience in various US Attorneys' offices, having held leadership positions in more than one office.

(esp)

July 18, 2007 in Prosecutors | Permalink | Comments (0) | TrackBack (0)