Friday, December 1, 2017

Australia Launches Royal Commission to Examine Banking Sector

As detailed by The Sydney Morning Herald, the Australian government announced this week that it will convene a Royal Commission to examine potential misconduct by the Australian banking and financial services sector.  The announcement was made by Prime Minister Malcolm Turnbull after a letter was received from four banks asking that a commission be established.  The communication from Commonwealth Bank, Westpac, National Australian Bank, and ANZ Banking Group asked that a “properly constituted inquiry” be conducted.  The bank letter opened by saying,

We are writing to you as the leaders of Australia’s major banks.  In light of the latest wave of speculation about a parliamentary commission of inquiry into the banking and finance sector, we believe it is now imperative for the Australian Government to act decisively to deliver certainty to Australia’s financial services sector, our customers and the community. 

Our banks have consistently argued the view that further inquiries into the sector, including a Royal Commission, are unwarranted. They are costly and unnecessary distractions at a time when the finance sector faces significant challenges and disruption from technology and growing global macroeconomic uncertainty.

However, it is now in the national interest for the political uncertainty to end.  It is hurting confidence in our financial services system, including in offshore markets, and has diminished trust and respect for our sector and people.  It also risks undermining the critical perception that our banks are unquestionably strong.

The establishment of the Royal Commission comes after several scandals involving financial institutions, including regulatory actions regarding rate rigging, money laundering, and misuse of client funds. 

According to the draft terms of the reference, the Royal Commission inquiry will be broader than simply investigating alleged criminal activity.  The reference includes instructions to examine:

  • “[T]he nature, extent and effect of misconduct by a financial services entity (including by its directors, officers or employees, or by anyone acting on its behalf)”  
  • “[A]ny conduct, practices, behaviour or business activity by a financial services entity that falls below community standards and expectations”
  • [T]he use by a financial services entity of superannuation members' retirement savings for any purpose that does not meet community standards and expectations or is otherwise not in the best interest of members”

The Royal Commission will last for twelve months and a final report is expected by February 2019.  Given the breadth of the inquiry, however, it would not be surprising to see the work of the commission continue on longer.

(LED)

December 1, 2017 in Current Affairs, Government Reports, International, Investigations, Money Laundering | Permalink | Comments (0)

Thursday, November 16, 2017

Senator Robert Menendez Jury Hangs: Mistrial Declared

Here is a story from Max Greenwood of The Hill and another from Bill Wichert of Law 360. Make no mistake about it, this was a great and hard-fought victory for Menendez's lead defense attorneys Abbe Lowell and Raymond Brown and for the entire defense teams of Bob Menendez and Salomon Melgen. Despite all of the speculation concerning the impact of the Supreme Court's McDonnell decision, I doubt that it materially impacted the jury's work. It is obvious that Senator Menendez performed official acts on behalf of his co-defendant Salomon Melgen. It appears instead that some of the jurors bought the defense's theory that the Senator's actions were taken based on his close and long-time friendship with Melgen. This bodes well for Senators who accept expensive gifts and do political favors for old friends. The key here is to make friends with the right solons earlier in their careers. Then you can become an old friend. 

(wisenberg)

November 16, 2017 in Current Affairs, Defense Counsel, Prosecutions | Permalink | Comments (0)

Monday, November 13, 2017

Special Counsels Are Sometimes Necessary

Andrew McCarthy at National Review Online compares the aggressiveness of Special Counsel Bob Mueller's Russia collusion investigation to the disgraceful kid gloves DOJ-FBI treatment of Mrs. Clinton and her email server. He is right on all counts, but this is not Mueller's problem. Mueller is doing exactly what one would expect of a Special Counsel. History teaches us that a Special or Independent Counsel will get rolled if he does not establish, unequivocally and from the start, that he will not be trifled with, obstructed, or lied to.  I'm not aware of anything that Mueller has done to date that is outside ethical boundaries. The real outrage, as I have said many times before, is that a Special Counsel was not appointed to investigate Mrs. Clinton. The governing federal regulation plainly called for it. Let's review.

28 CFR § 600.1 Grounds for appointing a Special Counsel.

The Attorney General, or in cases in which the Attorney General is recused, the Acting Attorney General, will appoint a Special Counsel when he or she determines that criminal investigation of a person or matter is warranted and -

(a) That investigation or prosecution of that person or matter by a United States Attorney's Office or litigating Division of the Department of Justice would present a conflict of interest for the Department or other extraordinary circumstances; and

(b) That under the circumstances, it would be in the public interest to appoint an outside Special Counsel to assume responsibility for the matter.

In Mrs. Clinton's case, the President's former Secretary of State, and the leading Democratic Party candidate for President, was credibly accused of mishandling classified documents on a private unauthorized email server and the President himself had communicated with her through that server. Even worse, during the investigation, the President improperly interfered by publicly declaring, on two separate occasions, that Mrs. Clinton did not intentionally engage in wrongdoing and did not harm national security. It is easy to imagine the furor that would have ensued if a Republican President had engaged in such conduct. The pressure to appoint a Special Counsel would have been relentless. It is easy to imagine, because that is exactly what happened with respect to President Trump.

So conservatives are understandably (and rightfully) outraged at the double standard, but, as with so much else, President Trump has primarily himself to blame. When you fire the FBI Director who is investigating members of your administration for unlawful collusion with Russia, and immediately brag to the Russian Ambassador that you fired him in order to get the Russia collusion investigation behind you, you are going to get a Special Counsel. It is yet another example of how President Trump, a political genius with a profound ignorance of basic American civics and governing norms, has stumbled into problem after problem. Kudos to Ty Cobb for limiting the damage for now.

None of this is Mueller's fault. He is doing the job we expect a competent Special Counsel to do.

(wisenberg)

November 13, 2017 in Corruption, Current Affairs, Grand Jury, Investigations, Legal Ethics, Obstruction, Perjury, Prosecutions, Prosecutors | Permalink | Comments (0)

Thursday, November 9, 2017

Fox News Reports Veselnitskaya-Fusion GPS Connection

Fox News is reporting here that a co-founder of Fusion GPS met with Russian lawyer Natalia Veselnitskaya both before and after her June 2016 meeting in Trump Tower with Donald Trump Jr., Jaren Kushner, Paul Manafort, and others. The Trump Tower meeting primarily involved a discussion of the Magnitsky Act, adoption, and/or dirt on Hillary Clinton, depending on whose version you accept. Trump Jr. has admitted that he showed up in order to hear about the dirt. According to Fox News, the first Veselnitskaya-Fusion meeting occurred "hours before" the Trump Tower meeting during a court hearing and the second Veselnitskaya-Fusion meeting occurred at an unspecified later time. The Trump Tower meeting has always smelled like a set-up to me and this report may fuel more speculation along these lines. As I noted here yesterday, I believe that Special Counsel Mueller already has authority to investigate the Steele Dossier as part of his charter. If he isn't investigating the Fusion GPS/Steele Dossier from top to bottom he should be, since, among other things, it was delivered to the FBI as part of an effort to prove that members of the Trump camp improperly coordinated with the Russian government during the 2016 campaign. If the Steele Dossier contained false information and was given to the Bureau as part of a deliberate effort to mislead the Department of Justice, somebody could conceivably be facing obstruction of justice charges. We need to know more about the Veselnitskaya-Fusion connection, but it is certainly interesting to find out that Fusion GPS had some kind of relationship with Veselnitskaya at the same time that the well-connected Russian lawyer was allegedly trying to entice the Trump team with dirt on Ms. Clinton.

(wisenberg)

November 9, 2017 in Current Affairs, Investigations, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0)

Wednesday, November 8, 2017

Fusion GPS: Already Within Mueller's Charter

Senator Lindsey Graham called over the weekend for a new Special Counsel to investigate the Fusion GPS/Steele Dossier affair and the Uranium One transaction. He has a point about Uranium One, but Fusion GPS is squarely within the scope of Special Counsel Bob Mueller's authority as set out in the Order appointing him. That Order explicitly authorizes Mueller to "conduct the investigation confirmed" by Saint Jim Comey in his March 20, 2017 testimony before the House Permanent Select Committee on Intelligence. The Comey-DOJ investigation was already considering the Steele Dossier as part of its work. Mueller is further authorized to investigate links and coordination between the Russian government and individuals associated with Donald Trump's campaign as well as "matters that arose" from said investigation. Clearly, the Steele Dossier was a matter that arose as part of the overall Russian collusion investigation and may have helped to instigate or prolong it. Finally, as part of the federal regulation governing Special Counsels, Mueller is authorized to investigate any effort to obstruct his investigation, which is a continuation of the original Comey-DOJ investigation. Assuming that the Steele Dossier contains deliberate falsehoods, and was given to the FBI by someone with knowledge of those falsehoods as part of a deliberate effort to obstruct the original DOJ investigation (by unfairly pointing the finger at Trump), this would also be within Mueller's bailiwick. Indeed, I assume that Mueller is already looking at the Steele Dossier as part of an obstruction of justice investigation. He would be derelict in his duty if he were not.

Any new Special Counsel for the Steele Dossier would simply be overlapping with Mueller and would need to hire a staff and get up to speed. I see no need for this, unless something about the Steele Dossier presents a conflict of interest for Mueller. Some commentators shave suggested that the FBI paid Steele for some of his work, or thought about doing so. If any of those agents are still on the investigative team, could it create a conflict? Perhaps, but that could be resolved by removing such agents from the investigation or from the Steele Dossier part of the investigation. And keep in mind that any Special Counsel will almost certainly have to rely on FBI Special Agents to conduct at least some of his/her work. If you think a desire to protect the Bureau automatically creates a conflict then even a new Special Counsel would face the potential for conflict. 

(wisenberg)

 

November 8, 2017 in Current Affairs, Grand Jury, Investigations, Legal Ethics, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0)

Monday, October 30, 2017

George Papadopoulos Criminal Information and Plea Papers

As most people have figured out by now, the most interesting development related to the charges unsealed today by Bob Mueller & company is the guilty plea entered into by an apparently marginal Trump Campaign operative named George Papadopoulos. Papadopoulos established direct and indirect contact with some Russians early in the campaign and lied about it later to the FBI. Not a good career choice. Now he has entered into a cooperation agreement and pled guilty under 18 U.S.C. Section 1001 (the Martha Stewart statute) to making false statements to government officials. Even without a downward variance his Guidelines Range is 0-6 months, so he won't be doing any time.  According to the U.S. v. George Papadopoulos Statement of the Offense, which is the key document in the case, on April 26, 2016, while Papadopoulos was working on the campaign, one of Papadopoulos's foreign contacts advised him that the Russians had access to "dirt" on Mrs.  Clinton and "thousands of emails."  Interestingly, the Statement of the Offense does not explicitly say that the emails were offered to the Trump Campaign by the Russians or that Papadopoulos shared the information about the emails with Trump Campaign officials. Here also are the  U.S. v. George Papadopoulos Criminal Information, and the U.S. v. George Papadopoulos Plea Agreement.

(wisenberg)

October 30, 2017 in Corruption, Current Affairs, Fraud, Investigations, Martha Stewart, Obstruction, Prosecutions | Permalink | Comments (0)

Manafort-Gates Indictment

On the Brink of Charges? UPDATE

The first thing to ask, if CNN's Friday night report is accurate, is who leaked? Because if the leak came from the government or court staff it is almost certainly an illegal violation of a sealed court order and/or grand jury proceedings. And if it came from the defense attorney of the party to be charged, who told him or her? The whole point of sealing something is so that the public doesn't know about it. All a courthouse staffer, moonlighting as media lookout, could have legitimately told the press is that "we saw so and so going into the court's chambers" or something along those lines.

Second, why would charges be sealed in the first place? Perhaps because the prosecution is afraid that someone will flee. That is the only legitimate reason I can think of to place an indictment under seal. If it was placed under seal to give government agents the opportunity for an early morning arrest it wouldn't surprise me one bit, given Andrew Weissman's dismal track record for hardball, heavy-handed tactics. (It will be interesting to find out someday just exactly what the government told a federal magistrate in order to get that no-knock warrant to search Paul Manafort's residence.)

Is it possible that the sealing was done in order to protect a defendant from having to spend the weekend (or at least one night) in DC jail? Unlikely. For defendants who do not turn themselves in by mid-morning in DC, the possibility of a night in jail is real. But if the prosecutors really cared about that, why not bring the charges on a weekday morning and allow the defendant to turn himself in the next day? This is done all the time.

Is it possible that the pending indictment report, true or false, is a deliberate ruse to see who will attempt to flee? In other words, does the government actually want someone to try to flee? After all, flight can be used as evidence of guilt in court. Unlikely, but anything is possible with Weissman in the number two slot.

We should find something out today. Here is Politico's excellent background piece by Darren Samuelsohn.

If there are any charges, expect them to be ancillary in nature. Look for false reporting violations or false statements to government agents. More to come.

UPDATE:

The Indictment is out and we will try to get it up as soon as possible. It is obvious that the prosecutors did the right thing in allowing Paul Manafort and Rick Gates to turn themselves in and that, in all likelihood, one of the defense attorneys leaked the news to CNN. Grand jury secrecy rules do not apply to witnesses or to those who receive their information from witnesses.

(wisenberg)

October 30, 2017 in Current Affairs, Grand Jury, Investigations, Legal Ethics, News, Prosecutions, Prosecutors, Searches | Permalink | Comments (0)

Thursday, October 19, 2017

Is the Schock Case Unraveling?

It's not every day that a federal district judge accuses the government of misleading the Court and demands corrective action. But it's happening in the Urbana Division of the Central District of Illinois. I posted here in March regarding the federal case against former Congressman Aaron Schock. Among other items of alleged government misconduct, the defense maintained that prosecutors improperly commented to grand jurors on Schock's failure to testify, in violation of his Fifth Amendment Privilege Against Self-Incrimination. The defense relied in part on an affidavit by a dismissed grand juror. After unequivocally denying the grand juror's allegation, the government clarified the record, more than six months later, admitting that government counsel "commented on or addressed Mr. Schock's testifying or decision not to testify before the grand jury" on eleven occasions. U.S. District Judge Colin Bruce was not amused, and ordered the government to review each of its previous filings "to ensure that no more false or misleading claims were made." Judge Bruce also gave the government 14 days to file a memo "detailing any further misrepresentations or misleading statements." Here is Judge Bruce's Order Requiring Government Memorandum re Misrepresentations. The government responded yesterday, denying that it had misrepresented anything to the Court, asking the Court to reconsider its finding regarding misrepresentation, and representing further that it had not intentionally made any materially misleading statements in its prior filings. Here is the Government's Compliance with the Court's October 3 Order and Motion to Reconsider. Schock, represented by George Terwillliger, Bob Bittman, Benjamin Hatch, Nicholas Lewis, and Christina Egan of McGuire Woods in DC and Chicago and by Jeffrey Lang of Lane & Waterman in Davenport, Iowa, wasted no time, not even a day, in firing back. Here is Schock's Motion to Strike or in the Alternative Leave to File a Response. Here as well is Schock's Proposed Response to Government's Compliance. In a future post, I will examine the nature of the government's comments to the grand jurors.

(wisenberg)

October 19, 2017 in Congress, Corruption, Current Affairs, Defense Counsel, Fraud, Grand Jury, Investigations, Judicial Opinions, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0)

Monday, May 15, 2017

Saint Jim Had To Go: Rod Rosenstein Should Stay Put.

I imagine we will know more about Rod Rosenstein's Memo, and its timing in connection with FBI Director Comey's firing, later this week. Based on the publicly available information, it appears that that when Rosenstein met with the President last Monday he was asked for his views on Saint Jim. Rosenstein no doubt articulated his disapproval of Director Comey's appallingly improper conduct during the 2016 election, a disapproval shared by legions of current and former DOJ prosecutors and FBI Special Agents. He was asked to memorialize his thoughts in a memo, and given a quick turnaround time. If this is how it played out, there was nothing wrong with the President's question, nothing wrong with Rosenstein's answer, nothing wrong with the President's request for a memo, nothing wrong with Rosenstein's decision to obey the request, and nothing wrong with the resulting memo itself. Nothing at all. Comey's conduct, as Rosenstein's Memo makes clear, was a gross deviation from standard DOJ practices, a clear overstepping of authority, and an improper smearing of an American citizen who just happened to be a major political candidate. As devoted readers of this Blog no doubt remember, I detailed Director Comey's myriad shortcomings here just after the election. To make matters worse, Director Comey refused to acknowledge his mistakes and improprieties and continued to publicly justify his shocking behavior in increasingly bizarre fashion. Some have suggested that Rosenstein's Memo "reads like an op-ed" or is "deeply troubling." I expect this kind of nonsense from the political opposition and the resisters, but when I see it from former colleagues of Rosenstein it makes we want to puke. The President is Rosenstein's superior. He asked for Rosenstein's opinion. He asked for Rosenstein to memorialize his thoughts in writing on a fast timetable. Each of these was a reasonable request. Should Rosenstein have refused the request, protesting that he needed more time to prepare a memo? He didn't need more time to detail Comey's indiscretions. Any schoolboy or schoolgirl reasonably competent in Civics could have done so.

The problems arose with what happened next. When Rosenstein learned that the White House was disseminating a false version of events to the effect that Comey's firing was solely the result of Rosenstein's Memo, he is reported to have quickly complained to the White House Counsel that he did not want the facts massaged and would not be comfortable staying in an Administration where this was happening. Translation: "Tell the President's people to quit lying. Stop the phony stories now." And the phony stories stopped. Then the President, in his typical foot-in-mouth way, admitted that Comey's handling of, and public comments about, the Russia investigation played a part in the firing. Think about that for a moment. Because of Rosenstein's status and sterling reputation, a reputation much ballyhooed by the Trumpistas, the President's people were forced to instantly and embarrassingly change their false narrative, and the President stumbled into another unforced error. That would not have been possible if the DAG had been a hack or mere factotum. Of course, Rosenstein could have decided to resign. Instead he demanded the truth and got it. It is a judgment call and I don't blame him at all for making the call he did, two weeks into the job.

Make no mistake, there is going to be a thorough investigation of Russian Collusion, either within Main Justice or by a Special Counsel. There are many good reasons for keeping the investigation in-house, as Rosenstein should know having served (along with me) in an Independent Counsel's Office. There are great inefficiencies and delays involved in setting up and running a Special Counsel operation. In disputes between such an office and an uncooperative Executive Branch, who would you rather see the President opposing? A Special Counsel, who he can demonize, or his own DAG, who he has already praised as a man of impeccable integrity? The scarier President Trump gets, the more I need the people around him to be sound, sane, and steady professionals. I want to see people like McMaster, Mattis, and Rosenstein at their stations.

As a matter of public relations, the President's unforced error will make it more difficult for Rosenstein to resist the calls for a Special Counsel. If President Trump's inappropriate comments about the investigation pile up, more and more citizens will be prone to see any declination by the DAG as a whitewash or a cover-up. So keep talking Mr. President. The more you complain about the Russia Investigation, the likelier you are to get a Special Counsel for all of your efforts. Meanwhile, were I Rosenstein, I would react to every Presidential criticism of the investigation with a renewed determination to leave no stone unturned. Hunker down Rod. Your country needs you.

(wisenberg)

May 15, 2017 in Current Affairs, Government Reports, Investigations, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0)

Friday, December 30, 2016

2016 White Collar Crime Awards

Each year this blog has honored individuals and organizations for their work in the white collar crime arena by bestowing "The Collar" on those who deserve praise, scorn, acknowledgment, blessing, curse, or whatever else might be appropriate. With the appropriate fanfare, and without further ado, The Collars for 2016:

The Collar for the Best Left Hand Turn – To the Supreme Court following Justice Scalia’s death in affirming both insider trading and bank fraud convictions.

The Collar for Failing to Deliver the Goods – To the government for prosecuting Fed Ex and then needing to dismiss the case following opening statements. 

The Collar for Needing New Glasses – To James Comey so that he can read Agency policy to not do anything election related within 60 days of an election. 

The Collar for Sports MVP – To the world of tennis, which stole some of the focus from FIFA this year with the BBC's allegations of significant match-fixing.

The Collar for Slow and Steady – To Britain's Serious Fraud Office, which, after announcing the implementation of DPAs in October 2012, entered into its first DPA in November 2015 and its second in July 2016. 

The Collar for Quick and Steady – To the DOJ, which, according to Professor Brandon Garrett’s website, has entered into well over 100 DPAs and NPAs since October 2012. 

The Collar for Best Reading of this Blog– To the Supreme Court in reversing Virginia Governor Bob McDonnell’s conviction, this blog’s 2015 case of most needing review.

The Collar for the Longest Attempt to Justify a DecisionTo the 11th Circuit for its 124-page decision in United States v. Clay that attempts to justify how “deliberate indifference” meets the Global Tech standard.

The Collar for Worst Schmoozing at an Airport To former President Bill Clinton for causing AG Loretta Lynch to accept the FBI’s decision-making after Bill Clinton came abroad her airplane. 

 The Collar for the Most Underreported Settlement – To Trump University’s agreement to pay $25 million settlement in the Trump University case.

 The Collar for Mandating Corporate Backstabbing To Deputy AG Sally Yates, who keeps insisting her memo that promoted a corporate divide from its constituents – widely referred to as the “Yates Memo” -- should be called the Individual Accountability Policy.

 The Collar for the Pre-mature Weiner Release – To James Comey for his overly excited announcement about the former Congressman’s emails.

The Collar for Community Service to Russia – To all those who failed to investigate and release reports on computer hacking that caused the release of information during the election.

The Collar for the Quickest Backpeddling – To Rudy Giuliani for “clarifying” his statement that he knew about a confidential FBI investigation related to Hillary Clinton’s emails.

The Collar for Best Game of Hide and Seek – To Donald J. Trump for explaining that he could not release his already-filed tax returns because he was under an IRS audit.

The Collar for Best Self-Serving Confession – To the Russian Sports Federation for admitting there was systematic doping of Olympic athletes (but Putin didn't know about it).

The Collar for Quickest Recantation (aka the "Mea Culpa Collar") – To DOJ Chief Leslie Caldwell for criticizing overly aggressive AUSAs at a Federalist Society function and apologizing to DOJ attorneys a few days later.

The Collar for Best Judicial Watchdog – To Judge George Levi Russell III of the United States District Court for the District of Maryland for his post-trial decision reversing the conviction of Reddy Annappareddy and dismissing the indictment with prejudice based on prosecutorial misconduct.

The Collar for Never Giving In – To Josh Greenberg and Mark Schamel who tirelessly and brilliantly represented Reddy Annappareddy post-trial and secured his freedom.

The Collar for Best Money Laundering  – To the New York City and Los Angeles real estate developers who sell eight-figure condo apartments to anonymous LLP's owned by foreign officials and their families.

The Collar for the Best Child – To Don Siegelman’s daughter, who continues to fight to “Free Don.”

The Collar for the Best Parent – Retired years ago and renamed the Bill Olis Best Parent Award –not awarded again this year since no one comes even close to Bill Olis, may he rest in peace.

(wisenberg), (goldman), (esp)

December 30, 2016 in About This Blog, Current Affairs, Deferred Prosecution Agreements, Government Reports, Investigations, Judicial Opinions, Money Laundering, News, Prosecutions, Prosecutors | Permalink | Comments (0)

Tuesday, December 6, 2016

Supremes Go With the Ninth Circuit on Insider Trading

Salman is in. Newman is out. Justice Alito writes the opinion for an 8-0 Court. Here is the opinion in Salman v. United States.

(wisenberg)

December 6, 2016 in Current Affairs, Fraud, Insider Trading, Judicial Opinions | Permalink | Comments (0)

Friday, November 18, 2016

Jeff Sessions To Be Tapped For Justice

This is according to every news source out there, including the Washington Post. Anyone who thinks this will be an easy nomination to put through, because Sessions is a sitting Senator, is in for a big surprise. It will be a bruising battle.

(wisenberg)

November 18, 2016 in Current Affairs | Permalink | Comments (0)

Tuesday, November 15, 2016

The Clinton Email Investigation: Professor Wisenberg's Grades Are In.

28 CFR § 600.1 Grounds for appointing a Special Counsel.

The Attorney General, or in cases in which the Attorney General is recused, the Acting Attorney General, will appoint a Special Counsel when he or she determines that criminal investigation of a person or matter is warranted and -

(a) That investigation or prosecution of that person or matter by a United States Attorney's Office or litigating Division of the Department of Justice would present a conflict of interest for the Department or other extraordinary circumstances; and

(b) That under the circumstances, it would be in the public interest to appoint an outside Special Counsel to assume responsibility for the matter.

FBI Director James Comey:

  1. F for failure to resign in protest when Attorney General Lynch kept the email investigation within the confines of DOJ. If there was ever a case justifiying the appointment of a Special Counsel, this was it. You appointed a Special Counsel to investigate the Plame Email leak when you were Acting Attorney General in the Bush Administration. You should have insisted on the same course of conduct here on threat of resignation. You had the standing and reputation to pull it off.  You didn't. You blew it, and later apparently tried to make up for it through your inappropriate prejudicial public pronouncements.
  2. F for letting Attorney General Lynch off the hook and effectively announcing the non-prosecution recommendation. Prosecutive decisions belong to prosecutors, not FBI agents or FBI officials.
  3. F for publicly smearing Ms. Clinton while announcing that no charges would be brought against her. If you don't indict, you don't smear, unless you are under a statutory duty to file a report.
  4. F for answering too many questions about the investigation when appearing before the House Judiciary Committee.
  5. F for releasing confidential FBI investigative reports to the House.
  6. F for failure to resign in protest given the kid gloves treatment afforded to Ms. Clinton and her aides during the investigation.
  7. F for your public announcement 11 days before the election. 

Attorney General Loretta Lynch:

  1. F for failure to appoint a Special Counsel.
  2. F for your tarmac meeting with former President Bill Clinton.
  3. F for handing over the prosecutive decision to FBI Director Comey.  If you needed to recuse, the final call, at that point in time, should have been made by your Deputy AG Sally Yates.
  4. A for your four line statement announcing the declination. It is the one thing you got right.

President Barack Obama:

  1. F for failing to insist that AG Lynch appoint a Special Counsel.
  2. F for your repeated public statements effectively proclaiming Ms. Clinton's innocence. You interfered with a pending investigation and potentially poisoned the jury pool.

DOJ Prosecutors:

  1. F for handing out use derivative immunity deals like they were candy and reaping no indictments in return.
  2. F for allowing Cheryl Mills to attend Ms. Clinton's final interview as one of her attorneys.
  3. F for not recording Ms. Clinton's interview.

 

These are preliminary grades, subject to revision as more facts are revealed.

(wisenberg)

 

November 15, 2016 in Congress, Corruption, Current Affairs, Investigations | Permalink | Comments (0)

Thursday, September 29, 2016

Comey Digs A Deeper Hole

In white collar cases, prosecutors often stress the signs or "indicia" of fraud inherent in a given defendant's conduct.  In the FBI/DOJ investigation of Secretary Clinton we have several signs of incompetence and/or highly irregular conduct on the part of those in charge. The one that stands out most clearly to anyone who practices white collar criminal defense was the decision to allow Cheryl Mills to attend Secretary Clinton's FBI interview. Competent prosecutors do not allow a key witness to participate as an attorney in an FBI interview of the main subject. It just isn't done. It isn't a close question. It is Baby Prosecution 101. Director Comey's attempt to justify this decision during yesterday's House Judiciary Committee Oversight Hearing was disingenuous and disgraceful.  According to Comey, the FBI has no power to control which attorney the subject of an investigation chooses to represent her during an interview. This is literally true, but irrelevant and misleading. Prosecutors, not FBI agents, run investigations. Any competent prosecutor faced with the prospect of Ms. Mills's attendance at Secretary Clinton's interview would have informed Clinton's attorneys that this was obviously unacceptable and that, if Clinton insisted on Mills's attendance, the interview would be conducted under the auspices of the federal grand jury. At the grand jury, Secretary Clinton would not have enjoyed the right to her attorney's presence in the grand jury room during questioning. In the event Clinton brought Ms. Mills along to stand outside the grand jury room for purposes of consultation, competent prosecutors would have gone to the federal judge supervising the grand jury and attempted to disqualify Ms. Mills. In all likelihood, such an attempt would have been successful. But of course, it never would have gotten that far, because Secretary Clinton will do anything to avoid a grand jury appearance. So, Director Comey's response was a classic dodge, one of several that he perpetrated during yesterday's hearing. As noted above, the decision to allow Ms. Mills to attend Secretary Clinton's FBI interview was only the clearest example to date of irregular procedures sanctioned by the prosecutors in charge of the Clinton email investigation. More to come on that in a subsequent post.

(wisenberg)

September 29, 2016 in Current Affairs, Defense Counsel, Grand Jury, Investigations, Legal Ethics, News, Obstruction, Privileges | Permalink | Comments (0)

Monday, September 12, 2016

Some Additional Thoughts on the McDonnell Decision

I agree with my colleague Prof. Podgor that DOJ made the "right decision" to drop the prosecution of former Virginia governor Robert McDonnell.  Under the narrow definition of "official act" given by the Supreme Court  a re-prosecution was doomed.   I further agree with Prof. Podgor that McDonnell's legal team, led by Hank Asbill and Noel Francisco, deserves plaudits for its determined and outstanding lawyering.

I do not, however, criticize DOJ for bringing this case.  McDonnell's acts - accepting $175,000 in money and gifts in exchange for favorable treatment for the donor - although ultimately determined not to be "official acts" and thus not criminal, were unseemly and corrupt.  That the Commonwealth of Virginia, in its wisdom or lack of it, chose not to criminalize such activity to me was a reason for federal prosecution, not for abstention.  To be sure, the government should have been aware that there was Supreme Court case law arguably undermining its position.  On balance, the egregiousness of McDonnell's conduct, I believe, justified a prosecution, even if it "pushed the envelope."

The McDonnell decision will allow federal prosecutions of politicians accepting things of value for favorable votes or actions on legislation or favorable decisions awarding governmental appointments, contracts and benefits, the areas within which most corruption cases fall.  It will, however, eliminate or preclude almost any prosecution for payments to officials for access, referrals and introductions, allowing donors an advantage over non-payers.   "Pay-for-play" systems do not guarantee winning a contract, but do allow one to be among those considered - a giant and necessary step.   Thus, the decision will, like Citizens United, most benefit the rich, powerful and politically-connected.

I, like many others, was surprised by the unanimity of the court.  Although I am no expert on Supreme Court internal politicking, I suspect some justices might have gone along with the decision to prevent a broader decision which would have greatly limited, or even eliminated,  federal prosecutions of state and local corruption, either by finding the term "official acts" constitutionally void for vagueness, or on federalism grounds.  In his opinion, Chief Justice Roberts mentioned, but did not rule on, both considerations. 

I cannot dismiss an undiscussed "elephant in the room," alluded to by Prof. Podgor.   The American election system commonly allows campaign contributions to be rewarded by at the least access to elected and appointed officials.  It is extremely doubtful whether McDonnell would have been prosecuted for accepting campaign contributions and rewarding the donor with access to state officials.  It seems to me extremely difficult to make a lawful/unlawful distinction between situations involving gifts to politicians for their personal use, as in McDonnell, and those involving gifts to politicians for campaign purposes.   Absent such a distinction, an affirmance of McDonnell might have led to cases concerning campaign contributions, which might have led to an upheaval in campaign financing practices generally accepted in America.   Thus, it is not surprising that a host of former Counsels to the President and Attorneys General submitted amicus briefs in support of McDonnell, a fact noted with apparent respect in the opinion.

Lastly, I wonder whether the Court was wary of allowing federal prosecutors expansive power to prosecute political officeholders.  There is always a danger - at least theoretical - that a prosecutor will misuse her power to indict political opponents, as is not infrequently done in foreign nations, and perhaps occasionally done in the United States.  It may well be that the case should be considered primarily as a limitation of prosecutorial and executive branch power.

 

September 12, 2016 in Corruption, Current Affairs, Defense Counsel, Judicial Opinions, Prosecutions, Prosecutors, Statutes | Permalink | Comments (0)

Thursday, September 8, 2016

Breaking News: DOJ Abandons McDonnell Prosecution Efforts

It's now official. Former Virginia Governor Robert McDonnell and his wife Maureen will not be retried and all charges are to be dropped. The Washington Post has the story here. It is unclear whether Main Justice overruled the EDVA or caused that office to change its mind regarding proceeding to a second trial. More analysis to come.

(wisenberg)

September 8, 2016 in Corruption, Current Affairs, Judicial Opinions, Prosecutions, Prosecutors | Permalink | Comments (0)

Wednesday, September 7, 2016

U.S. v. Reddy Annappareddy: What The Judge Saw

Finally, as promised, here is the U.S. v. Reddy Annappareddy 9-1-16 Motion to Dismiss Hearing Transcript. At the conclusion of that hearing Judge George Levi Russell dismissed the Indictment with prejudice. Judge Russell's rationale for his ruling can be found at pages 49-62 of the transcript. This was a health care fraud case and a core government theory was that Mr. Annappareddy received Medicaid reimbursement for pills that were never given to patients. The government sought to prove its theory by showing that Mr. Annappareddy's pharmacies billed for more pills than they received. The most significant evidence that the prosecutors offered in support of this allegation was a calculation of the purported “loss” from the alleged fraud. The following factors were key to the Court's finding that the government committed due process violations that shocked the conscience and rendered it impossible to put Mr. Annappareddy back on an even footing with the government: 1) the government violated Brady by failing to disclose loss calculations from its initial auditing team that were significantly smaller (in total and with respect to two key pharmacies) than the calculations of a subsequent government auditor who testified at trial; 2) the government violated Brady by failing to disclose the risk of double-counting errors in the loss calculations; 3) the government presented false testimony regarding the loss calculations due to double counting errors; 4) the government presented false testimony by a government agent, based on her examination of the wrong set of phone records, that Mr. Annappareddy had NOT made any calls to a key individual in response to a material email from that individual, when in fact Annappareddy had several phone contacts with the individual within minutes of the material email; and 5) the government destroyed potentially key exculpatory evidence without a court order or the defense's permission. The Court also sent a not so subtle warning to the government: "In the event that my record is not clear or exercise of my discretion too broad, this Court will conduct an extensive time-consuming and costly hearing as to these matters and the other grounds supporting the motion to dismiss and other motions which have already been filed. To that end, the balance of all other motions in this case are denied as moot." Translation: If you appeal this ruling and I am reversed, we will delve in detail into the other grounds of error raised by the defense. And it will not be a pleasant process. Hat Tip to David Debold of Gibson Dunn for sending along the transcript.

(wisenberg)

 

September 7, 2016 in Current Affairs, Defense Counsel, Judicial Opinions, Legal Ethics, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0)

Thursday, September 1, 2016

Breaking News: U.S. v. Reddy Annappareddy Dismissed With Prejudice

The case against Reddy Annappareddy is over. The Government's case has been dismissed with prejudice by U.S. District Court Judge George Russell because of a pattern of government misconduct that shocks the conscience. As soon as I obtain a copy of today's hearing transcript we will post it. Congratulations are in order for Mr. Annappareddy and his Womble Carlyle defense team of Mark Schamel and Josh Greenberg. Greenberg's relentless motions work over the past 11 months has been particularly brilliant. Anybody who does white collar work in the federal courts knows how difficult it is to obtain a result like this, post-trial. This is a magnificent victory.

(wisenberg)

September 1, 2016 in Current Affairs, Defense Counsel, Investigations, Judicial Opinions, Prosecutions, Prosecutors | Permalink | Comments (0)

U.S. v. Reddy Annappareddy: Decision Day Is Here

As we write this post U.S. District Court Judge George Russell is holding a hearing on Defendant's Motion to Dismiss with prejudice. I have previously discussed this case here and here. The motion is bottomed on various alleged prosecutorial errors and misdeeds. In a bad omen for the Government, Judge Russell only set arguments on the Motion to Dismiss (despite the pendency of other motions) and summarily denied the Government's motion to delay the hearing. The Government wanted a delay in the wake of an onslaught of defense motions, authored by Womble Carlyle's Josh Greenberg, alleging additional Government misbehavior, including destruction of potentially exculpatory evidence at a time when the Defendant's Motion for New Trial was filed and awaiting a decision. The Government later joined in the Motion for New Trial after admitting that it presented false material testimony to the jury. Meanwhile, in a filing that can only be described as stunning, the Government yesterday attempted to defend its admitted document destruction. Here lies the Government's Response Re Document Destruction.

(wisenberg)

September 1, 2016 in Current Affairs, Defense Counsel, Investigations, Judicial Opinions, Prosecutions, Prosecutors | Permalink | Comments (0)