Wednesday, May 27, 2009
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:
SPECIFIED UNLAWFUL ACTIVITY.—
(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.
Monday, May 25, 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.
THE WHITE HOUSE,
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.
Monday, March 2, 2009
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)
Monday, February 23, 2009
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)
Sunday, February 15, 2009
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
Monday, March 31, 2008
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.
Wednesday, March 5, 2008
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)
Saturday, March 1, 2008
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.
Thursday, February 28, 2008
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.
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)
Monday, February 25, 2008
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.
Saturday, February 23, 2008
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)
Friday, February 22, 2008
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)
Friday, February 15, 2008
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)
Thursday, February 14, 2008
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)
The hearing before the House Oversight and Government Affairs Committee was not very edifying as Roger Clemens and Brian McNamee tried to defend their veracity in occasionally sharp questioning from Congressmen, and neither man ended up coming across as particularly believable in my opinion. From the outset, the hearing was simply a perjury trap, or at least an exercise to determine whether we could figure out if either one was telling the truth. The prepared statements set the stage for the face-off about whether or not Clemens used performance-enhancing drugs. Clemens' statement (here) asserts:
I appreciate the opportunity to tell this Committee and the public—under oath—what I have been saying all along: I have never used steroids, human growth hormone, or any other type of illegal performance enhancing drugs. I think these types of drugs should play no role in athletics at any level, and I fully support Senator Mitchell’s conclusions that steroids have no place in baseball. However, I take great issue with the report’s allegation that I used these substances. Let me be clear again: I did not.
McNamee was equally insistent, stating in the the first paragraph (here):
I was once the personal trainer for one of the greatest pitchers in the history of baseball, Roger William Clements. During the time that I worked with Roger Clemens I injected him on numerous occasions with steroids and human growth hormone.
While it's clear that at least one of the two is lying, by the end of the hearing both came across as less than truthful. Clemens made any number of inconsistent statements in his deposition and testimony, and had a difficult time expressing himself when challenged (e.g. "misremembering"). McNamee fared little better, explaining that he failed to disclose information to prosecutors and changed his story by adding details as he remembered them, so he never told the same tale twice. We were even treated to an extended discussion about whether Clemens attended a party at fellow baseball star Jose Canseco's house, an issue of almost no relevance to the Mitchell Report but the Committee investigation included an interview with Clemens' former nanny about whether he was at the event. Clemens (and Canseco) denied he was there, while the nanny said he was -- who cares, because there was no indication that anything having to do with steroids or HGH took place, unless anyone seen in the vicinity of Canseco is presumed to use the stuff.
The Committee made all of the documents, including deposition transcripts and affidavits, available on its website (here), in case you want to torture yourself further. The big question that hung over the entire proceeding was whether the Committee would refer the case to the Department of Justice for a perjury investigation. I suspect the Committee will forward the information to the Department and ask that prosecutors look into the matter, but the chances of a perjury prosecution emerging from this entire process are pretty slim, at least based on the evidence produced to date.
If prosecutors want to go after Clemens, they will be hard pressed to get a jury to believe McNamee, who effectively admitted that he does not handle the truth very well (e.g. "a partial lie"). Information provided by Clemens' former teammate Andy Pettitte about conversations they had concerning HGH use was not helpful, but it is hardly the type of clear contradiction needed for a perjury investigation, especially when one of the discussions took place nearly ten years ago. Clemens could not bring himself to call Pettitte a liar, but he did dispute his friend's memory of the conversations, throwing up enough dust to make it hard to figure exactly what was said. The Committee also obtained an affidavit from Pettitte's wife confirming that he told her about a conversation with Clemens, but that is hearsay of the first order and would not be admissible at a criminal trial to prove what Clemens said. While the syringes and other items produced by McNamee could well link Clemens to HGH and steroids, issues about chain of custody and McNamee's veracity in recounting why he held on to such materials don't make this anything like a smoking gun, or even one a little bit warm.
Could McNamee face perjury charges? He is a linchpin of the Mitchell Report, so it would hardly be a ringing endorsement of the information it contains if a key witness was charged for lying to Congress. McNamee admitted that his memory is faulty, but he certainly provided enough truthful information, confirmed by Pettitte and former Yankee second baseman Chuck Knoblauch, that you would not want to build the case around Clemens any more than you would make McNamee the star witness.
In math, when two negative numbers are multiplied, the product is a positive number, although I've never been sure why. In an investigation of possible perjury, when two less-than-reliable witnesses make statements such that one must necessarily be false, it is nearly impossible to bring a charge against either when the other will be the key witness. The Congressional circus is probably over, and while the Justice Department might be asked to take a look, I doubt it will go much further. So the issue of Clemens' truthfulness will be left to the court of public opinion. (ph)
Friday, February 8, 2008
If you've ever been tempted to say "I've seen everything," then the absurd theater that took place in the Rayburn House Office Building between Roger Clemens and his former trainer Brian McNamee should give you pause. With a phalanx of cameras and reporters at every turn, Clemens visited a number of Congressional offices to pitch his story, no doubt signing a few autographs for starry-eyed staffers, and may even a couple Representatives, too. This is all in preparation for the very public House Oversight and Government Reform Committee hearing scheduled for Wednesday, February 13, when Clemens, McNamee, and two other players, Andy Pettitte and Chuck Knoblauch, will testify about performance-enhancing drugs in major league baseball.
How often does a witness meet with most of the Committee members in advance to just shoot the breeze and hang out? The timing of Clemens' appearance put him in the same building as McNamee, who met for eight hours with investigators from the Committee for his deposition in advance of the hearing, thus stealing at least some of the limelight from his former trainer. In the pre-hearing jousting, McNamee's lawyers fired back by releasing pictures of syringes and gauze pads that their client claims were used for the steroid and HGH injections of Clemens, and they purportedly may have traces of The Rocket's DNA on them.
Is this the "smoking gun" that will somehow prove whether McNamee or Clemens is lying? The answer, of course, is that there are no smoking guns -- or syringes in this instance -- except if you're reading a Sherlock Holmes story or listening to the Nixon White House tapes. McNamee's evidence dates from six to eight years ago, and may not yield any link to Clemens. But even if it does, will that somehow prove that Clemens knowingly took steroids and has been lying about his use of performance-enhancing drugs? While everyone talks about perjury charges, none have been filed or are even in the offing at the moment, so this is all a bit premature. Moreover, remember that Clemens did say earlier that McNamee gave him vitamin B-12 injections, so there is surely a Barry Bonds "I thought it was flaxseed oil" defense available, if it comes to it. On a second front, Clemens' lawyer, Rusty Hardin, has been hard at the vilification of McNamee: "How do you deal with someone who comes out with a psycho thing like sitting on a syringe for nine years?" The fact that McNamee kept such items for a number of years raises questions about what he intended to do with the materials, assuming they are what he claims them to be. Even if there are traces of Clemens' DNA on the syringes, that does not establish what was in his mind, which is required for any perjury (or false statement) charge. It isn't just what you say, but more importantly your knowledge that the assertion was not truthful that gets you convicted. And proving what's in a person's mind, especially if the syringes could be explained as coming from vitamin B-12 injections, makes a perjury charge very difficult to establish. The absurdity of the whole process certainly raises the questions about why the valuable time of Congressmen and their staff is being used for meetings with Clemens and a deposition of McNamee. In the end, does any of this really matter, aside from the opportunity to appear on camera?
On the lighter side, one of the photographs (here) released by McNamee's lawyers was of a syringe in a pile of rather nasty looking gauze and cotton balls, with a crushed Miller Lite beer can in the background. Are we being asked to believe that Clemens drinks Miller Lite along with his steroids and HGH injections? Or is the can there to give a little perspective to the pile? I doubt we will see this shot in a future Super Bowl commercial. A Newday story (here) discusses the day's events. (ph)
Thursday, January 24, 2008
- The act of inviting.
- A spoken or written request for someone's presence or participation.
I've always taken the word "invitation" to mean something that a person can turn down, but apparently that's not the case when it comes from a Congressional Committee. The House Oversight and Government Reform Committee asked three former New York Yankees, Roger Clemens, Andy Pettitte, and Chuck Knoblauch, along with two admitted steroids suppliers, Brian McNamee and Kirk Radomski, to testify about steroid use, but Knoblauch didn't respond to the "invitation." Aside from a brief appearance before reporters outside his Houston home to assert his ignorance about the issue, Knoblauch has not been heard from. He will have to respond now, however, because the Committee announced (here) that it would issue a subpoena to him: "The Committee has taken this step because Mr. Knoblauch failed to respond to the invitation to participate voluntarily in a deposition or transcribed interview and the February 13 hearing." How Knoblauch responds to the more compelling subpoena remains to be seen, but at least it's clear that an "invitation" is not something one is free to ignore when the envelope comes from Congress. (ph)
Saturday, January 19, 2008
Maybe it's the post-New Year rush, but the pace of white collar crime stories has picked up noticeably since January 1, so much so that your intrepid bloggers can't keep up with everything. So here's a sampling of developments this past week that will keep us -- and more importantly, the defense bar and prosecutors -- busy in the near future.
- An "Invitation" From Congress: The House Oversight and Government Reform Committee sent out letters (available here) to baseball players Roger Clemens, Andy Pettitte, and Chuck Knoblauch, along with their purported steroids and HGH enablers, Brian McNamee and Kirk Radomski, to appear at a hearing on February 13. Is it really an invitation, as the letter states, or would a polite declination draw a subpoena? Each letter also asks the witness to meet with the Committee staff for a deposition or transcribed interview, either of which could trigger criminal charges under Sec. 1001 if the person lied. Only Knoblauch is not represented by counsel, and the reason for his invitation has been something of a mystery, at least to him.
- Another Athlete Pleads to Lying About Steroid Use: Add former NFL All-Pro defensive lineman Dana Stubblefield to the list of athletes to plead guilty to lying to federal agents in connection to receiving steroids from Balco (Bay Area Laboratory Co-Operative). Stubblefield entered a guilty plea to one count of violating Sec. 1001 for denying, among other things, that he used "the clear" and that he never dealt with Balco. Stubblefield was a member of the Oakland Raiders at the time, and is the first football player charged in connection with the Balco investigation. An ESPN.com story (here) by Mark Fainaru-Wada, co-author of the famous book about Barry Bonds Game of Shadows, discusses the guilty plea. The guilty plea does not bode well for Houston Astros shortstop Miguel Tejada, who is now the target of an FBI preliminary investigation for making allegedly false statements to investigators from the House Oversight Committee regarding steroid use by Rafael Palmeiro -- is anyone starting to spot a trend here?
- Representative Jefferson On the Hot Seat: Representative William Jefferson testified at a hearing on motions to suppress evidence about the treatment he received from FBI agents executing a search warrant at his New Orleans home during which they found, among other things, $90,000 in cash in a freezer. The Congressman has asked the district court to suppress his statements to agents because they did not give him Miranda warnings, and so his testimony focused on facts showing that he was in custody at the time even though the interview took place in his home. Thus, Representative Jefferson regaled the courtroom with the statement from one agent demanding "Where is my ******* money?" and how another agent followed him into the bathroom during the early morning execution of the warrant. He is also asking the court to prohibit the government from using approximately 1,700 pages of records seized during the raid as falling outside the scope of the warrant. Suppression motions are difficult to win, and this is the rare white collar case in which Miranda is an issue. Interestingly, what Representative Jefferson is not trying to suppress is the $90,000 from the freezer, which was part of a $100,000 payment made to him with money supplied by the FBI, and hence traceable. That strikes me as fairly damaging evidence, but corruption cases can take odd twists so there may be a plausible explanation for putting the money on ice. A Washington Post story (here) discusses Representative Jefferson's testimony -- and for those who were wondering, his statements at the hearing cannot be used by the government in its case-in-chief, and he did not waive his Fifth Amendment right not to testify at the trial scheduled to begin in late February.
- A Former Congressman Charged With Aiding a Terror Group: Former Congressman Mark Siljander was named in a superseding indictment in Kansas City on charges of money laundering, conspiracy, and obstruction of justice related to his work as a lobbyist on behalf of the Islamic American Relief Agency, which has been identified as a terrorist organization. Siljander is alleged to have lied to a grand jury and federal agents regarding his work on behalf of the organization, which was seeking to be removed from the list of terror-related entities. An L.A. Times story (here) discusses the indictment.
- Maybe Everything Is Weirder in Texas, Too: Well, at least when you're talking about the DA's office Houston, things can get a bit strange. We've discussed the travails of Harris County DA Chuck Rosenthal, whose salacious (and in one instance racist) e-mails came to light recently in a federal civil rights case that caused him to drop his re-election bid. Now, a Harris County grand jury indicted a member of the Texas Supreme Court and his wife on charges related to an alleged arson at their home, and the next day the DA's office announced it was dropping the charges because there was insufficient evidence to support them. A runaway grand jury or possible favoritism from the DA's office? While the prosecutors did not want to move forward with the case, the grand jury did, so it voted its indictment despite the lack of support from the DA's office. Now, the Justice wants two of the grand jurors sanctioned for violating the secrecy rules that cover grand jury proceedings for discussing the case and claiming that DA Rosenthal's refusal to prosecute was politically motivated. An investigation of the investigators? A Houston Chronicle story (here) discusses the latest developments, and my friends in Austin are more than a little bemused by all the happenings in Houston.
Whew!! And those were not the biggest stories, either, but each is certainly worthy of some attention. Our little slice of the world remains an interesting place reside. (ph)
Friday, January 11, 2008
Immunity has become an issue in two high-profile Congressional investigations: the House Oversight and Government Affairs hearings on steroid use in baseball and the House Intelligence Committee session on the destruction by the CIA of the interrogation videotapes in 2005. Jose Rodriguez, the former Director of the CIA's National Clandestine Service who order the tapes be destroyed, has informed the Committee through his attorney, leading white collar practitioner Bob Bennett, that he will not testify unless granted immunity by Congress. Given that the Department of Justice has initiated a criminal inquiry into the decision to destroy the tapes, it is unlikely that an immunity grant will be forthcoming because it would, in all likelihood, mean that no criminal charges could be brought against Rodriguez. As the one responsible for the destruction, it's unlikely the Department will acquiesce in an immunity grant, and Democrats on Capitol Hill are unlikely to give a free pass in a case that could be used for political gain. An AP story (here) discusses the immunity request.
Over at the steroids hearings, Brian McNamee, former trainer for Roger Clemens and Andy Pettitte, has asked for immunity as a condition for testifying at the now-rescheduled February 13 session of the Committee. It is not entirely clear what arrangement McNamee has with federal prosecutors in providing information to Senator Mitchell, which included the allegations about Clemens. Earlier media reports indicated that he was operating under a letter agreement with the Department of Justice, essentially a "Queen for a Day" limited immunity arrangement, and not a full grant of immunity. According to an AP story (here), McNamee meet with federal agents again on January 10, which in all likelihood would be based on a "Queen for a Day" agreement. McNamee has asked for a grant of statutory use/fruits immunity before testifying at the hearing, which I suspect indicates that he has not been granted that level of immunity to this point. Most limited immunity agreements allow prosecutors to use the information provided to gather additional information against the witness, and in some cases if the person is prosecuted later to use the statements at trial. If Congress grants immunity, then none of the statements can be used in any way, giving McNamee greater protection. I'm not aware of Congressional committees giving the more limited "Queen for a Day" immunity like U.S. Attorneys offices do, so McNamee's attorney is protecting his client and seeking an arrangement that would make it almost impossible to prosecute him down the road for providing steroids and HGH to players.
The wild-card witness in the steroids hearing may be former Yankees second baseman Chuck Knoblauch, who has been invited to testify along with McNamee, Clemens, and Pettitte (and also Kirk Radomski, who had no direct dealings with these players but supplied some of the substances involved). It's not clear why Knoblauch is included in the case, although according to a story on ESPN.com (here) he shares the same agent as Clemens and Pettitte and was on the Yankees at the same time they were. Knoblauch has neither admitted nor denied using HGH, as described in the Mitchell Report based on McNamee's statements. Perhaps he is being called to bolster McNamee's statements if Knoblauch did received the HGH, but at this point he looks like the fifth wheel at the hearing. (ph)