Friday, October 2, 2009

NACDL's 5th Annual Defending the White Collar Case Seminar - "Capitol Chaos--What's Happening in D.C.?," Friday, October 2, 2009

Guest Blogger:  Ross H. Garber, Shipman & Goodwin (Hartford, CT)

Panelists:  Shara-Tara Regon, Kathleen Sullivan

Legislative Update

Shana Regon, NACDL’s Director of White Collar Crime Policy, provided an update on NACDL’s efforts on Capitol Hill.  She began by talking about NACDL advocacy on attorney-client privilege and attorney work product protection issues, particularly related to DOJ policy on requesting waivers of the privilege and protection from cooperating companies.  She also talked about proposed legislation, HR 1947, that would regulate deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs).  Among the provisions of HR 1947 are those that would require court approval of DPAs and NPAs and require posting of all DPAs and NPAs on the DOJ website.  Shana also talked about NACDL’s efforts to educate Congress about overcriminalization including ambiguous mens rea standards, mandatory minimums, the federalization of criminal conduct and the adoption of overlapping statutes covering the same conduct.

Supreme Court Update

Kathleen Sullivan of Quinn Emanuel spoke about some recent white collar cases decided by the Supreme Court in the past session: Diaz v. Massachusetts; Yaeger v. United States; and Nijhawan v. Holder.  In Malendez-Diaz, the Supreme Court held in a 5-4 decision that the confrontation clause applies to an affidavit from a crime lab analyst because it is testimonial in nature.  Kathleen emphasized that this decision would apply to any forensic experts.  In Yaeger, the court held that when a jury acquits on some counts and hangs on others, the government may not re-try the defendant on any of the counts.  In Nijhawan the Court interpreted the deportation statute for aggravated felonies with respect to crimes of fraud or deceit involving more than $10,000.  The Court held that the $10,000 requirement is met based on the facts of the case, even if the underlying aggravated felony statute itself does not require a $10,000 loss

Kathleen noted that in this session, the Court is considering several honest services cases.  Among the issues the Court will tackle is whether the mail fraud statute criminalizes mere ethical missteps. Among the honest services cases are United States v. Weyrauch, in which an Alaska legislator was convicted of soliciting legal work from clients when he was in a position to benefit clients and not disclosing the work.  The question posed in this case is whether the government must prove violation of disclosure requirements otherwise required by state law. 

In a case involving Conrad Black, the Supreme Court will evaluate whether there must be an intent to and likelihood of depriving a corporation of a business opportunity for an executive to be found guilty of the honest services provision of the mail fraud statute.  Kathleen said she expects these cases to be decided for the defendants on narrow statutory grounds.


October 2, 2009 in Conferences, Congress, Current Affairs, Fraud, Judicial Opinions, Statutes | Permalink | Comments (0) | TrackBack (0)

Thursday, October 1, 2009

NACDL's 5th Annual Defending the White Collar Case Seminar - "Pay to Play - The Current Wave of Public Corruption Cases," Thursday, October 1, 2009

Guest Blogger:  Linda Friedman Ramirez, P.A. (Tampa St. Petersburg, FL)

Panel Moderator:  Abbe David Lowell

Panelists:  Robert Trout, Karen Patton Seymour, Reid Weingarten, and Edward Genson

NACDL's 5th Annual White Collar Crime Conference kicked off today with the Pay to Play panelists jumping into a thorough discussion of the key issues in the defense of a public corruption case via a hypothetical created by panel moderator Abbe Lowell. 

Quick Overview of the Hypothetical - Alice Adams, the Democrat Maryland Speaker of the House, is also a civil attorney. Her firm Murphy andSchaeffer also has a lobbying practice. Her Chief of Staff Bruce Bannon is an attorney in private practice but has no office. Funhouse hires Murphy and Schaeffer to promote gambling legislation in Maryland. Alice earns a percentage of her law firms fees. She introduces and fast tracks legislation to legalize gambling. In an ethics form regarding outside employment, she discloses Murphy andSchaeffer but does not discuss specific clients. Funhouse CEO also hires Bannon for personal estate planning work and essentially pays him $50,000 for a will. There is a federal and state joint investigation and grand jury subpoenas are issued for records investigating allegations of bribe, theft of honest services, and wire fraud.

The panel agreed that attorneys are needed for all individuals and entities subpoenaed. The first question is whether joint defense agreements are more problematic than helpful. There seemed to be a consensus that there might be some benefits, particularly when working with attorneys with whom there has been no prior experience or quirky clients, but most panelists expressed reservations about their use.

Next up - the panelists discussed the subpoena for records relating to the legislative process and the Speech and Debate privilege. Who asserts? The panel propounded on the importance of collaboration between the attorney for Alice and the attorney for House. Also, how to handle keeping back documents that may be privileged and the concept of using a privilege log? TheDOJ’s view of the Speech and Debate clause is in a great deal of flux, and DOJ’s view has changed radically. Further, if it is a federal subpoena does this change anything? And how does the counsel for Funhouse handle its own subpoena? The four panelists explored the issues relevant to subpoenas for contribution records and the intersection with the First Amendment.

Another important issue for practitioners is how to respond to precharge or pretrial publicity in high profile cases, including responding to questions by investigative reporters. Clients often have a strong desire to speak to the public. Different responses from the panelists: give clients a limited script; have the attorney act as spokesperson -- though that raises the concern for attorneys of moving into the realm of public relations; hiring surrogates.

Also, what happens if a client wants to make his case to the prosecutor? Is this a good strategy? Of course the most important issues are whether the facts are sufficient for a prosecution pursuant to 18 U.S.C. 1346?  Is conflict of interest + non-disclosure enough under this statute?  This was the meat of the panel and the discussion was exciting and demonstrated the knowledge of the panel.  Also, Moderator Abbe Lowell injected into the discussion 18 U.S.C. 666, which is the jurisdictional statute for prosecution of offenses committed by state public officials and the requirement of a connection with the receipt of federal funds 18 U.S.C 666 (b).

By the close of the panel it was clear that an hour and a half was not nearly enough time to explore this topic!


October 1, 2009 in Conferences, Congress, Corruption, Investigations, Privileges | Permalink | Comments (0) | TrackBack (0)

Saturday, August 1, 2009

Overcriminalization: An Area That Needs Attention

Several groups were on the hill this past week for a hearing on “Over-criminalization of Conduct and Over-Federalization of Criminal Law” before the U.S. House of Representatives Crime, Terrorism, and Homeland Security Subcommittee.  The coalition includes an odd mix of groups from the ABA, ACLU and NACDL to the Heritage Foundation, Washington Legal Foundation and Federalist Society. The very fact that such a wide array of groups are agreeing that change is needed, is important.  To give a flavor of the arguments, here is the  NACDL statement and testimony.  An overhaul of the federal criminal justice system is needed, and one of the deficiencies of the existing system is that there is overcriminalization and overfederalization. Lets hope the strong showing by so many different constituencies moves this issue forward.


August 1, 2009 in Congress | Permalink | Comments (3) | TrackBack (0)

Sunday, June 14, 2009

Will There Be Change in the US Criminal Justice System

The US Senate, Committee on the Judiciary held a hearing this past week (June 11th) titled, "Exploring the National Criminal Justice Commission Act of 2009." (see here).  Panel Two included Chief William Bratton - LA Police Dept., Pat Nolan - VP Prison Fellowship, Professor Charles Ogletree - Harvard, and Brian Walsh of the Heritage Foundation.  The panel discussed issues related to massive incarceration, including the incarceration of the mentally ill. Chief William Bratton noted how  the "American system of justice is overworked."  Professor Charles Ogletree said that we need to retire the phrase "a war on crime" and replace it with a phrase "be smart on crime." Brian Walsh emphasized that crime reform should not be driven by partisan politics and he also stressed the importance of examining overcriminalization issues. Pat Nolan gave some concrete examples of how to reform incarceration practices to save money and achieve better results.

Listening to this hearing, sent the important message that we need to stop thinking just retribution, and thinking wisely about how to reduce recidivism.  It was particularly good to see that some were mentioning the importance of distinguishing crimes and criminals. With the increased white collar sentences, it is hoped that if a President's Commission is established it will look closely at how best to treat white collar and corporate offenders.


June 14, 2009 in Congress | Permalink | Comments (2) | TrackBack (0)

Thursday, May 28, 2009

Fraud Enforcement Recovery Act of 2009 - False Claims Act Provisions

FERA makes many changes to the False Claims Act, 31 U.S.C. ss 3729-3733. FriedFrank (with many thanks to John T. Bose) has done a wonderful analysis here (Download 090521), and has a redline copy here that lets one see the changes that were made to these statutes. Finally, the statute with the provisions incorporated is here (again, thanks to FriedFrank).  

When examining the money laundering statute changes (here), it was apparent that a key change was to address the recent Supreme Court ruling in the Santos case.  The changes in the False Claims Act also address some Court rulings, most noteably Allison Engine Co. v. United States ex re. Sanders.    FERA, overall, makes the government job of obtaining convictions and getting civil remedies easier. The False Claim Act provisions do that with a reduced intent requirement.  But the government and relators do not get everything here, as FERA provides for a materiality requirement.(see Download 090521, supra).


May 28, 2009 in Civil Enforcement, Congress | Permalink | Comments (1) | TrackBack (0)

Wednesday, May 27, 2009

Fraud Enforcement Recovery Act of 2009 - The Money Laundering Provisions

In recent years, some white collar cases have had money laundering charges included in the Indictment.  Some may believe that the addition of money laundering counts is used as leverage to secure a plea from the accused. The Fraud Enforcement Recovery Act of 2009 includes changes to both sections 1956 and 1957 of title 18, the money laundering statutes. The changes are as follows:


(1) MONEY LAUNDERING.—Section 1956(c) of title 18, United States Code, is amended—

(A) in paragraph (8), by striking the period and inserting ‘‘; and’’; and

(B) by inserting at the end the following:

‘‘(9) the term ‘proceeds’ means any property derived from or obtained or retained, directly or indirectly, through some form of unlawful activity, including the gross receipts of such activity.’’.

(2) MONETARY TRANSACTIONS.—Section 1957(f) of title 18, United States Code, is amended by striking paragraph (3) and inserting the following:

‘‘(3) the terms ‘specified unlawful activity’ and ‘proceeds’ shall have the meaning given those terms in section 1956 of this title.’’

It is obvious in reading the language that Congress was reacting to the Supreme Court decision in United States v. Santos, where a plurality (Scalia, Souter, Ginsberg, and Thomas) found that the rule of lenity applied because of a failure to define the term "proceeds" in the statute.  Justice Stevens went with these four justices, but limited his decision, saying he would not have ruled this way if the case involved contraband or organized crime.  The Court, therefore, held that "proceeds referred to "profits" and not "receipts."  A four person dissent (Breyer, Alito, Roberts, and Kennedy) believed that proceeds should include the total amount brought in.  This Congressional amendment to the statute endorses the position taken by the dissent and provides a definition of what is meant by the term "proceeds."  

But there are several points to note here.  Even though the new legislation clarifies the statute, thus voiding any need to resort to the Rule of Lenity in defining "proceeds" and also resolves future cases on which crimes are covered by the Santos decision (an issue that several district and circuit courts have had to contend with), it may still allow defense counsel to make merger arguments.  As stated by Justice Stevens in his concurring opinion in Santos

"Allowing the Government to treat the mere payment of the expense of operating an illegal gambling business as a separate offense is in practical effect tantamount to double jeopardy, which is particularly unfair in this case because the penalties for money laundering are substantially more sever than those for the underlying offense of operating a gambling business."

 It also leaves open the issue of how this statute applies to mail fraud when the crime is not complete and whether a sentence can be enhanced when the predicate offense and the money laundering merge.  Congress was clearly concerned about the merger issue as the amendment includes a specific statement "Sense of the Congress and Report Concerning Required Approval for Merger Cases" that states:  

(1) Sense of Congress - It is the sense of the Congress that no prosecution of an offense under section 1956 or 1957 of title 18, United States Code, should be undertaken in combination with the prosecution of any other offense, without prior approval of the Attorney General, the Deputy Attorney General, the Assistant Attorney General in charge of the Criminal Division, a Deputy Assistant Attorney General in the Criminal Division, or the relevant United States Attorney, if the conduct to be charged as ‘‘specified unlawful activity’’ in connection with the offense under section 1956 or 1957 is so closely connected with the conduct to be charged as the other offense that there is no clear delineation between the two offenses.

(2) REPORT.—One year after the date of the enactment of this Act, and at the end of each of the four succeeding one-year periods, the Attorney General shall report to the House and Senate Committees on the Judiciary on efforts undertaken by the Department of Justice to ensure that the review and approval described in paragraph (1) takes place in all appropriate cases. The report shall include the following:

(A) The number of prosecutions described in paragraph (1) that were undertaken during the previous one-year period after prior approval by an official described in paragraph (1), classified by type of offense and by the approving official.

(B) The number of prosecutions described in paragraph (1) that were undertaken during the previous one-year period without such prior approval, classified by type of offense, and the reasons why such prior approval was not obtained.

(C) The number of times during the previous year in which an approval described in paragraph (1) was denied.


May 27, 2009 in Congress, Money Laundering | Permalink | Comments (2) | TrackBack (0)

Monday, May 25, 2009

Fraud Enforcement Recovery Act of 2009

Passed by both the House and Senate, the Fraud Enforcement and Recovery Act of 2009 (FERA) was signed it into law by the President with the following statement -

Today I have signed into law S. 386, the "Fraud Enforcement and Recovery Act of 2009." This Act provides Federal investigators and prosecutors with significant new criminal and civil tools to assist in holding accountable those who have committed financial fraud. These legislative enhancements will help the Department of Justice to combat mortgage fraud, securities and commodities fraud, and related offenses, and to protect taxpayer money that has been expended on recent economic stimulus and rescue packages. With the tools that the Act provides, the Department of Justice and others will be better equipped to address the challenges that face the Nation in difficult economic times and to do their part to help the Nation respond to this challenge.

Section 5(d) of the Act requires every department, agency, bureau, board, commission, office, independent establishment, or instrumentality of the United States to furnish to the Financial Crisis Inquiry Commission, a legislative entity, any information related to any Commission inquiry. As my Administration communicated to the Congress during the legislative process, the executive branch will construe this subsection of the bill not to abrogate any constitutional privilege.

May 20, 2009.

There are many important provisions related to white collar crime in this new law, including changes in the Civil False Claims area, changes to the money laundering statute, areas related to TARP, and changes to a host of statutes like 18 U.S.C. ss 1014, 1031, 1348, and 1956.  Over the next week I will be offering commentary on what FERA says and how it changes the prosecution and defense of white collar matters. 


May 25, 2009 in Congress | Permalink | Comments (4) | TrackBack (0)

Monday, March 2, 2009

NACDL & Heritage: Together in Bed Again

The NACDL and Heritage joined forces together again, this time opposing the Public Corruption Prosecution Improvements Act (S49) (see here). (see previously the opposition to S. 386, the Fraud Enforcement Recovery Act here). "Although the two organizations are, as they note in their letter, often 'on opposite ends of the liberal-to-conservative spectrum,' the two organizations agree that federal prosecutors already have all the tools they need (and far more) to prosecute public corruption."

(esp)(w/ a hat tip to Jack King)

March 2, 2009 in Congress, News | Permalink | Comments (0) | TrackBack (0)

Monday, February 23, 2009

Senate Happenings - Criminalizing the Filing of False Fishing Licenses

An executive business meeting is set for the Senate Judiciary Committee for February 26, 2009.  On the agenda are S. 386 - Fraud Enforcement and Recovery Act and S. 49 - Public Corruption Prosecution Improvements Act (see here). The most troublesome aspect of this latter bill is its attempt to provide increased prosecutorial power on mail and wire fraud offenses. Section 3 is titled, "Application of Mail and Wire Fraud Statutes to Licenses and Other Intangible Rights."  It looks like an attempt to circumvent the Supreme Court ruling in United States v. Cleveland, where the Court held that licenses were not property for purposes of mail fraud. Imagine this scenario - a person answers a question incorrectly on their mailed application for a fishing license.  Assuming other aspects of the statute being met, the government would now be able to prosecute them federally for mail fraud.  Adding the words "or any other thing of value" might not include licenses, but the title of this provision sure is an attempt to try to increase prosecutorial power to include them.  There needs to be some limits to this already near limitless statute, and this provision is not moving in the correct direction.

(esp)(w/ a hat tip to Tiffany Joslyn of NACDL)

February 23, 2009 in Congress, Corruption, Fraud | Permalink | Comments (1) | TrackBack (0)

Sunday, February 15, 2009

The Proposed New Fraud Act - Both NACDL and Heritage Voice Opposition

Clearly there is a need for increased regulation to stop fraudulent activities.  In this past year, there have been too many innocent victims of fraud.  The legislative response, however, is disappointing.  As I told Chisun Lee at ProPublica, here, it uses a hammer to hit the wrong nail.

Parts of the new legislation are promising.  For example, increased funding to monitor and detect fraud would be wonderful. Admittedly Senator Patrick Leahy when introducing the bill notes that "homes mortgages were packaged together and turned into securities that were bought and sold in largely unregulated markets on Wall Street." But the next paragraphs do not logically follow from this statement.  That is, adding new federal legislation and increasing penalties are part of the proposed legislation.  New laws, however, are not the answer - especially when there were already laws on the books to meet the alleged conduct. What needs to happen here is stopping this misconduct before victims suffer.  There needs to be increased regulation and oversight of that regulation to stop those who try to engage in fraudulent activities.

It is interesting to see the National Association of Criminal Defense (NACDL) and Heritage Foundation issuing a joint statement to the Senate Judiciary Committee showing their opposition to the proposed expansion of federal criminal law in S. 386, the Fraud Enforcement Recovery Act.   

Heritage-NACDL Letter -Download nacdlheritage_ltr_to_senate_judiciary__fraud_enforcement__recovery_act_s__386.pdf


Addendum - Rita Glavan, Acting Assistant AG- Criminal Division presents the government position here - Download 2009-3057-1.pdf

February 15, 2009 in Congress | Permalink | Comments (3) | TrackBack (1)

Monday, March 31, 2008

Congressperson's Office Covered By "Speech & Debate Clause"

The Supreme Court refused to re-examine a D.C. Circuit court opinion regarding an issue that arose following a search of Louisiana Representative William Jefferson's office. The D.C. Circuit had ruled that the search was improper as it violated the U.S. Constitution's Speech or Debate Clause.  The Court of Appeals held that "[t]he search of Congressman Jefferson’s office must have resulted in the disclosure of legislative materials to agents of the Executive. Indeed, the application accompanying the warrant contemplated it." (see decision)  In letting stand the D.C. Circuit Court opinion, despite a government appeal (see here and here), the Supreme Court was not willing to wrestle with the contours of what is included within the Constitution's Speech and Debate Clause. 

The DOJ is not pleased with this decision (see here).  But in many ways this is an important decision.  Although the government may feel it will make their investigations/prosecutions more difficult, it is a crucial position in light of the political happenings seen not too long ago in DOJ hiring and firing.  In order for there to be a proper balancing of power, it is critical that the executive branch cannot be invading the turf of the legislature.   The Supreme Court's decision not to re-examine the lower court ruling does not open the door as a license to do criminal business in legislative offices.  Rather it lifts the possibility of political retaliation in our government.


March 31, 2008 in Congress, Investigations, Judicial Opinions, News | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 5, 2008

How Not to Ask Questions

Perjury is definitely in the news these days, with the FBI investigating Roger Clemens for his statements before a Congressional committee and Detroit Mayor Kwame Kilpatrick's testimony in a whistleblower lawsuit denying a relationship with an aide under review by the local prosecutors office.  One of the highest profile perjury cases involves home run king (and apparently unwanted free agent) Barry Bonds, whose charges was dismissed by U.S. District Judge Susan Illston because of flaws in the indictment.  Judge Illston ordered the release of the transcript of Bonds' grand jury testimony in 2003 (available below) that now reveals the entirety of the nearly three-hour examination by two Assistant U.S. Attorneys. 

While the indictment presents Bonds in a bad light by isolating specific instances of allegedly false answers, skimming through the full transcript shows just how disorganized the prosecutors seemed to be, and how at least one of them couldn't ask a simple question.  Whether it was nervousness or perhaps being intimidated by Bonds, the questions come across almost like a stream of consciousness approach to the examination.  Here's just one example of the kind of questions Bonds faced: "Let me ask the same question about Greg at this point, we'll go into this in a bit more detail, but did you ever get anything else from Greg besides advice or tips on your weight lifting and also the vitamins and the proteins that you already referenced?" (Pg. 23)  Huh?  Understanding that a transcript does not necessarily convey the full flavor of the actual interchanges, in reading through the questioning I'm struck by how convoluted the questions are, punctuated throughout with "I mean," "you know," and similar distracting phrases.

What makes perjury so difficult to prove is that the allegedly false answer is not necessarily the most important thing.  As the Supreme Court noted in Bronston v. United States, 409 U.S. 352 (1973), "Precise questioning is imperative as a predicate for the offense of perjury."  Among the questions recited in the original indictment was this model of obfuscatory inquiry: "So, I guess I got to ask the question again, I mean, did you take steroids?  And specifically this test the [sic] is in November 2000.  So I'm going to ask you in the weeks and months leading up to November 2000  were you taking steroids . . . or anything like that?" 

Prosecutors will no doubt come back with a new indictment of Bonds in the next couple weeks, one which is honed down and focused on just single questions and answers to avoid the duplicity problem that led to the dismissal.  But they can only work with the transcript they have, and finding a clear question -- and answer -- may be quite a challenge.  The questioning of Bonds was not a model of how to set a perjury trap, if that was the goal in having him testify. (ph)

Download us_v_bonds_grand_jury_transcript_bonds.pdf

March 5, 2008 in Congress, Grand Jury, Perjury | Permalink | Comments (1) | TrackBack (0)

Saturday, March 1, 2008

Mukasey Refuses to Proceed Against Bolten & Miers

Professor Peter Henning here, had raised the issue of whether AG Mukasay would issue a contempt citation against Bolten and Miers. And we now know the answer. Dan Eggen of the Washington Post writes, Mukasay Refuses to Prosecute Bush Aides. It seems that Attorney General Mukasey is taking the position that Bolten and Miers refusal to comply with a congressional subpeona does not constitute a crime.

Check our Scotus Blog - Congress's Contempt Power: Law, History, Practice and Procedure

Talkleft in July wrote here

This places the ball back in the Congressional hands - and the issue will be whether they force the issue with Mukasey or move onto the courts for a remedy.


March 1, 2008 in Congress, Contempt, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Thursday, February 28, 2008

This is News?

FBI Probing Whether Clemens Lied to Congress (AP) -- What a shocker!

House Ethics Committee Launches Investigation Into Conduct of Rep. Renzi (AP) -- The 35-count indictment came out almost a week ago, so this surely ranks as a "rapid response."

Pelosi Calls For Grand Jury Investigation Of Bolten, Miers (The Politico) -- Talk about falling on deaf ears, and this one took two weeks to formulate.


February 28, 2008 in Congress, Investigations, Perjury | Permalink | Comments (0) | TrackBack (0)

Springing the Perjury Trap on Roger Clemens

House Oversight and Government Reform Committee Chairman Henry Waxman and ranking member Representative Tom Davis sent a letter to Attorney General Mukasey asking for an investigation of possible perjury by Roger Clemens about his use of steroids and HGH -- and his attendance at a party in 1998 at Jose Canseco's house.  The letter (available below) does not come out and explicitly accuse Clemens of being a liar while under oath during his February 5 deposition or February 13 Congressional testimony, but it does say that "Congress cannot perform its oversight function if witnesses who appear before its committees do not provide truthful testimony. Perjury and false statements before Congress are crimes that undermine the integrity of congressional inquiries. For these reasons, we take evidence that a witness may have intentionally misled the Committee extremely seriously."  Of course, Representative Waxman said after the hearing that he regretted even holding it, and nothing of any legislative importance occurred during the session, but thos minor annoyences won't stand in the way of a criminal referral.

What started out as a perjury trap has now been sprung on Clemens, with the FBI sure to begin an investigation because Congress wants one.  It was clear that either Clemens or his former trainer, Brian McNamee, was lying because they told diametrically opposed stories.  But the question now is whether a federal prosecutor could prove Clemens committed perjury, a much more difficult task than just saying "I don't think he's telling the truth."  The Committee also released a memorandum (available below) from the staff that outlines the various contradictions in Clemens' testimony, based largely on the testimony of McNamee and former teammate Andy Pettitte, who discussed two conversations with Clemens about using HGH.  The memo contains no new surprises, and sets forth the inconsistencies in Clemens' testimony in great detail. 

The problem is that the standard used by the Committee staff is not what a prosecutor must use to decide whether to pursue a case.  The analysis points out places where what Clemens said was "implausible" or that certain facts "bolster" McNamee's statements.  But a perjury prosecution that will ride on the credibility of McNamee will involve much more than just whether there is a rational basis to believe him rather than Clemens.  A criminal prosecution will involve asking a jury to believe that McNamee is truthful, not just plausible.

McNamee admitted during the Committee hearing that he has made a number of inconsistent, or even false statements, in addition to not disclosing the syringes and gauze pads he claims were used to inject Clemens until well after his interview for the Mitchell Report.  Pettitte is a more credible witness, but he only remembers two conversations, one of which took place nearly ten years ago.  Will Pettitte bring down his old friend, or will he waffle just enough that his testimony might not be sufficiently credible to a jury?

Perjury is among the most difficult crimes to prove because the government must establish that the defendant told an outright lie, and not just that the person dissembled or made statements that seem implausible.  The standard for sending a referral to the Department of Justice is quite low, basically something doesn't look right, and an investigation can be initiated just to placate Congress.  Even sending out grand jury subpoenas and calling witnesses to testify does not require anything more than a suspicion that wrongdoing occurred, which is certainly the case with the Clemens-McNamee smackdown.  But the leap to proving perjury is significant, and as I've said before, if McNamee is the linchpin of the case then it will be a very difficult one to win.  (ph)

Download oversight_government_reform_committee_letter_clemens_feb_27_2008.pdf

Download oversight_government_reform_committee_memo_clemens_feb_26_2008.pdf

February 28, 2008 in Congress, Investigations, Perjury | Permalink | Comments (2) | TrackBack (2)

Monday, February 25, 2008

Analyzing Rep. Renzi's Indictment

The indictment of Rep. Richard G. Renzi is 26 pages in length and has 35 counts.  There are two co-defendants also charged, although these two do not face all the charges levied against Renzi.

The opening passages of the Indictment are descriptive and include items such as the location of his law degree, something his law school may not be too happy about. This is interesting in itself as it shows that he graduated in 2001 and was elected to the house in November 2002, although he has an extensive background in Renzi Investments, since 1995, something that is also discussed in this charging document.

Count One charges conspiracy, with the substantive acts of Hobbs and mail and wire fraud being the essence of the illegal agreement. The government, despite recent losses in the honest services realm, uses section 1346 as an unlawful act which formed the conspiracy. There are 28 overt acts specifically outlined in the indictment.  Although the overt acts appear to be many, they could easily be collapsed into relatively few items as they include separate counts for when a check is written and when it is deposited.

Counts Two - Ten charge honest services wire fraud. They are the substantive acts and are very much repetitive of what was described in the conspiracy count.  Thus, the fax of July 6th appears in both places. This is not unusual as the federal system allows the government to charge both the conspiracy and substantive act for the same conduct.

Count Eleven charges conspiracy to commit money laundering with count twelve being the concealment of money laundering, and counts thirteen to twenty-five being transactions in criminally derived funds.

Counts Twenty-Six and Twenty-Seven present Hobbs Act charges.

Counts Twenty-Eight, yet another conspiracy count, presents a conspiracy to commit insurance fraud.

Counts Twenty-Nine through Thirty-Two are the substantive charges of insurance fraud.

Count Thirty-Three through Thirty-Five pertain to false statements to influence insurance regulatory investigations.

The Indictment then presents a claim for forfeiture.

This indictment, like so many, is a classic example of the discretion afforded the government in charging in that many different statutes will often fit the conduct alleged to have been committed. As one finds in many cases, the government uses a good number of the tools in its box when presenting the charges. This is contrasted against cases where there has been an agreement already reached and the government may use an Information to charge one or just a few counts.


February 25, 2008 in Celebrities, Congress, Money Laundering, News, Prosecutions | Permalink | Comments (0) | TrackBack (1)

Saturday, February 23, 2008

Arizona Congressman Indicted

Add Arizona Representative Rick Renzi to the list of Congressmen indicted over the past couple years.  A grand jury in Tuscon, Arizona indicted the three-term Representative -- who announced in August 2007 that he would not stand for re-election -- on thirty-five counts of mail and wire fraud (including right of honest services), insurance fraud, money laundering, Hobbs Act, and conspiracy for his role in a purported land swap that netted a business partner $4.5 million (indictment available below).  According to a press release issued by the U.S. Attorney's Office for the District of Arizona (here), Representative Renzi allegedly demanded that two companies purchase his partner's interest in land on which Renzi held a note in exchange for the Congressman's support for land exchange legislation.  The partner and a third participant were also indicted.

Representative Renzi is the second member of the current Congress to be indicted, joining Louisiana Representative William Jefferson, who was charged with soliciting bribes and violating the Foreign Corrupt Practices Act.  As a side note, Representative Jefferson filed a notice of appeal of the district court's decision (available below) rejecting his motion to dismiss the indictment because of violations of the Speech or Debate Clause immunity.  This is one of only two constitutional protections that can be the basis for an interlocutory appeal, the other being a claimed violation of the Double Jeopardy Clause.  That will delay Representative Jefferson's trial at least six months, and possibly a year depending on how quickly the Fourth Circuit acts.  Because the charges against Representative Renzi involve what may constitute legislative acts, i.e. his support for legislation, a Speech or Debate Clause claim will come at some point, no doubt.  Two other Representatives who entered guilty pleas while in Congress in its last term are Randy (Duke) Cunningham, serving a 100-month sentence for bribery, and Bob Ney, sentenced to thirty months for not reporting gifts (and recently transferred to a half-way house in Cincinnati).  Other members of the House of Representatives remain under investigation for transactions with former superlobbyist Jack Abramoff, who has been cooperating with prosecutors.  Another black eye for the House of Representatives. (ph) 

Download us_v_renzi_indictment_feb_21_2008.pdf

Download us_v_jefferson_memorandum_opinion_feb_13_2008.pdf

February 23, 2008 in Congress, Corruption, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Friday, February 22, 2008

Can Prosecutors Call Lott to Testify at the Scruggs Trial?

The latest bombshell in the prosecution of Dickie Scruggs and two co-defendants on charges related to an attempted bribe of a state judge was the revelation by federal prosecutors that they intend to call former Senator Trent Lott -- Scruggs' brother-in-law -- to testify at trial about conduct that may involve a scheme to influence a second state court judge.  The government notified the defendants earlier that it intends to offer Rule 404(b) evidence against Dickie regarding his conduct to influence Judge Bobby DeLaughter in a case over which he was presiding involving a dispute over attorney's fees, the same type of suit in the main corruption prosecution.  Unlike the attempted bribe, however, the alleged influencing of Judge DeLaughter involved the possibility that Senator Lott would recommend him for appointment as a federal district court judge, and Dickie purportedly offered to intercede with his brother-in-law to help get the appointment. 

At a hearing on various defense motions (see Clarion-Ledger story here), the prosecutors revealed the potential witnesses they would call to establish the influencing of Judge DeLaughter, including the fact that Senator Lott called the judge to discuss his interest in an appointment to the federal bench.  Records indicate that the call was in fact made, although Judge DeLaughter was never nominated and it appears that the issue never went any further than the single telephone call.  The federal corruption statutes do not require success for a violation, and the quid pro quo need not be money or property, only something of value to the recipient, so an offer to help get a federal judgeship would likely constitute a criminal violation.  Senator Lott's involvement appears to be innocent on his end, making what appears to be largely a courtesy call to someone who had virtually no chance of being nominated -- Judge DeLaughter is a Democrat.  The fact that Senator Lott resigned his seat two days before Dickie's indictment is certainly fodder for the conspiracy theorists, but the fact that he made a telephone call, even at the behest of his brother-in-law, does not mean Senator Lott knew there was anything questionable taking place.

An interesting question is whether Senator Lott can be called to testify, or will the immunity granted under the Speech or Debate Clause bar any questioning about the telephone call to Judge DeLaughter.  That provision provides that "for any Speech or Debate in either House, [Members of Congress] shall not be questioned in any other Place.”  U.S. Const. Art. I, Sec. 6 (italics added).  The protection afforded by the Constitution means a Senator or Representative cannot be charged with a crime or sued in a civil case about the person's legislative acts.  The language of the provision would also appear to include questioning in a criminal investigation or prosecution, such as a grand jury or at trial.  In Gravel v. United States, 408 U.S. 606 (1972), the Court described what comes within the immunity provided to legislators:

The heart of the Clause is speech or debate in either House. Insofar as the Clause is construed to reach other matters, they must be an integral part of the deliberative and communicative processes by which Members participate in committee and House proceedings with respect to the consideration and passage or rejection of proposed legislation or with respect to other matters which the Constitution places within the jurisdiction of either House.

Id. at 626.

The Senate is required to give advice and consent to judicial nominees, and contacting someone about an appointment to the federal bench sure looks like it comes within Gravel's description of a legislative act.  Thus, naming Senator Lott as a witness to testify about the telephone call, which could include questions his motivations for it or discussions that led up to it, would appear to come within the prohibition on questioning a member of Congress about their legislative activities.  Imagine the questions that might be posed by either prosecutors or defense counsel to Senator Lott, such as "Was Judge DeLaughter a serious candidate for a nomination, and what other candidates were you considering?" or "What is the process by which you review candidates for nomination as a federal district court judge?"

The Speech or Debate Clause protection is jealously guarded by Congress, and I doubt counsel to the Senate would be willing to allow such questions, even if Senator Lott wants to testify.  While the Senator could give a voluntary statement because he would not be "questioned" in violation of the Congressional immunity, I doubt it would be admissible for any number of reasons, including problems under the Confrontation Clause if Dickie is not given the chance to cross-examine him under oath.  While the prosecutors and perhaps even the defendant are anxious to have Senator Lott testify, I don't know if we will ever see that take place in this always-interesting case.  (ph)

February 22, 2008 in Congress, Corruption | Permalink | Comments (0) | TrackBack (0)

Friday, February 15, 2008

Should Lawyers Learn to Speak Less, and Other Random Thoughts On the Clemens-McNamee Showdown

I promise this is my last post on the face-off between Roger Clemens and Brian McNamee before the House Oversight and Government Affairs Committee . . . until my next one, of course.  Here are some random thoughts about the lawyers involved before I move on from the farce on Capitol Hill:

  • One thing that struck me throughout the whole build-up to the hearing, during in which Clemens visited a number of Committee members in their offices, was that one of his attorneys, Rusty Hardin, seemed to say things that only focused more attention on his client's alleged use of performance-enhancing drugs without putting the situation in the best light.  I understand the whole sports analogy that "the best defense is a good offense," but I've also thought that sometimes the lawyer needs to keep a case out of the news if the glare of the cameras is not going to do the client much good.  Hardin's comments about the potential presence of IRS Special Agent Jeff Novitzky, the scourge of Barry Bonds and other athletes who testified before the Balco grand jury, certainly did not serve his client well.  Novitzky attended the hearing, and upon learning that he would be there, Hardin stated in an interview, "I can tell you this: If [Novitzky] ever messes with Roger, Roger will eat his lunch."  I generally make it a policy not to make negative comments about people who carry a gun for a living, and launching a broadside at a federal agent who can investigate Clemens is not necessarily in the client's best interest.  Hardin's comment even drew a rebuke from Oversight Committee Chairman Henry Waxman, whose letter (here) issued on a Sunday states, "If today's quotation is accurate, however, it goes beyond any personal enmity that exists between Roger Clemens and Mr. McNamee. I do not know your intent in making this statement, but under one interpretation it can be seen an attempt to intimidate a federal law enforcement official in the performance of his official duties."  Not the best way to impress the Committee chairman. 
  • Not to be outdone, McNamee's lawyer, Richard Emery, launched his own attack after the hearing, claiming that the harsh questioning was a Republican plot because of Clemens' friendship with the Bush family, and even claimed that the President was likely to pardon Clemens, much like he commuted the sentence of I. Lewis (Scooter) Libby after his conviction on perjury and obstruction of justice charges.  [Trivial point: Libby's sentence was commuted, and he did not receive a pardon, at least not yet.  There is nothing to commute for Clemens at this point.]  An AP story (here) quotes Emery as stating, ""It would be the easiest thing in the world for George W. Bush, given the corrupt proclivities of his administration, to say Roger Clemens is an American hero, Roger Clemens helped children . . . It's my belief they have some reason to believe they can get a pardon."  I guess the President could issue a pardon in advance of any criminal charges being filed against Clemens, but that has not been done since the Nixon pardon, and seems a bit far-fetched at this point.  Does it boost McNamee's credibility, damaged as it was at the hearing, for his attorney to claim there is a conspiracy to protect Clemens that somehow involves the President? 
  • One point cited by Emery as supporting his pardon theory was Clemens testified that he spoke with the first President Bush shortly after the Mitchell Report came out.  That disclosure came in one of the more rambling non-sequiturs in Clemens' testimony, which can be found starting on page 141 of the hearing transcript (here).  In response to a question from Representative John Duncan, Jr. (R-Tenn.) about why he didn't speak with Senator Mitchell during the major league baseball investigation, Clemens said that no one told him about it, and then discussed how easy he is to find, including the following:

When all this happened, the former President of the United States found me in a deer blind in south Texas and expressed his concerns, that this was unbelievable, and to stay strong and keep your -- hold your head up high. These people found me.

All due respect to Senator Mitchell, I am on the same subject with him and steroids and baseball. But Bud Selig, that league, Bud Selig could have found me. If he knew that within days what this man said was going to destroy my name, he could have found me.

I am an easy person to find. I am an easy person to find in the public.

Got that?  No, I can't really follow the logic myself.  Senator Mitchell's investigation was widely known, especially in baseball circles, and the fact that former President Bush could find Clemens in a duck blind does not really answer the question, but then that didn't seem to be the Rocket's intention as he meandered through his time on the U.S. Olympic baseball team and other extraneous matters.  Very odd.

I won't inflict this on you again, at least not until there's something new and interesting to talk about. (ph)

February 15, 2008 in Congress, Investigations | Permalink | Comments (4) | TrackBack (0)

Thursday, February 14, 2008

House Votes to Hold Miers and Bolten In Contempt, and Grants Itself Power to Pursue the Subpoenas

The issue over subpoenas to former White House aides Harriet Miers and Joshua Bolten related to the firing of eight U.S. Attorneys that the President asserted they could simply ignore under a claim of Executive Privilege has come to a head in the House of Representatives.  Following a Republican walk-out from the chamber, the Democrats voted in favor of contempt citations for the two, which now authorizes the Attorney General to bring the case to a grand jury.  Because the White House and Attorney General Mukasey have already indicated that the cases will not be pursued, the House adopted a second resolution (available below) authorizing the Judiciary Committee to file a declaratory judgment action to seek a determination of the enforceability of the subpoenas.  The Resolution states:

[T]he Chairman of the Committee on the Judiciary is authorized to initiate or intervene in judicial proceedings in any Federal court of competent jurisdiction, on behalf of the Committee on the Judiciary, to seek declaratory judgments affirming the duty of any individual to comply with any subpoena that is a subject of House Resolution 979 issued to such individual by the Committee as part of its investigation into the firing of certain United States Attorneys and related matters, and to seek appropriate ancillary relief, including injunctive relief.

This is an interesting way to redress the problem of the Executive Branch ignoring the contempt citations, but I'm not sure how it will play in the courts.  Can Congress authorize its own suit to review a subpoena when there is a federal statute on the issue of contempt (2 U.S.C. Sec. 192)?  I suspect the Department of Justice will argue that the only means to have the subpoena reviewed is through the contempt procedure, which is how a failure to respond to a grand jury subpoena is normally handled.  While this will bring the issue to a head, I will look to those with greater expertise in constitutional law and the power of the federal courts to shed some light on this one.  (ph)

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February 14, 2008 in Congress | Permalink | Comments (0) | TrackBack (0)