Sunday, July 17, 2005

The Latest in Illinois

Some of the latest happenings in Illinois:

1. The DOJ reports in a Press Release here that it has secured another plea - its nineteenth- in an ongoing Chicago investigation. The press release states that: "General Services Administration (GSA) planner-estimator . . . pleaded guilty to bribery in connection with the awarding of GSA contracts at the Dirksen Federal Courthouse in Chicago. . ."

2.  The defense does not appear to be happy with the government's tactics in what's happening with former Governor Ryan. According to the Chicago Tribune here the defense is arguing that the government left out exculpatory evidence to the defense in a proffer as a "media ploy." (Chicago Tribune's headline) The Chicago Tribune notes that the defense argues that the proffer fails to include "tapes [that] unequivocally exonerate George Ryan."  The Chicago Tribune reported on the proffer here. The case is set for trial in September (see Illinois Leader here).  According to the Illinois Leader here, the former Governor was "indicted on 22 counts ranging from racketeering to mail fraud to obstruction of justice." Yes, that's the same former Governor who was a nominee for the 2005 Nobel Peace prize (see here).  This will definitely be a case to follow.

(esp)

July 17, 2005 in Corruption, Investigations, Media, Prosecutions | Permalink | TrackBack (0)

Tuesday, July 12, 2005

Guys - Say Something - Someone is in Jail

The media  (e.g., NYTimes here and Wall Street Jrl here) are discussing the failure of President Bush and White House spokesperson Scott McClellan to answer questions regarding whether Karl Rove will be fired.   As noted here we are suddenly hearing doublespeak like "I will be glad to talk about it at the appropriate time." 

While it may be true that this is an ongoing investigation, the bottom line is that a woman remains in jail because her source is not giving her the go-ahead to speak.  If that source turns out to be Karl Rove, or some other member of the administration, then why aren't they stepping forward and allowing her to testify before the grand jury. 

Sources for the press are important.  They have in the past provided information that helped to rid the government of corruption (e.g. "deep throat").  But sources who are giving the press information, not for a public interest, but rather for a political motive and perhaps committing a crime or violating a security clearance in the process, creates concerns. 

It is understandable that a press person needs to protect all sources to continue the flow of information.  It is not, however, understandable why the source is not stepping forward to allow Judith Miller to speak and leave jail. The bottom line right now is not what the White House has to say, but rather what Judith Miller's protected source has to say.   It is clearly an "appropriate time" for someone to speak.

(esp)

July 12, 2005 in Media | Permalink | TrackBack (0)

Monday, July 11, 2005

What Will the Reporter's Notes Reveal? Karl Rove?

It looks like the press is openly naming Karl Rove as someone who was a source to Time Magazine reporter Matthew Cooper.  (see Wall Street Jrl here and NYTimes here).  This does not, however, mean that Karl Rove committed a crime.   

What the prosecutor needs to still determine is who leaked this information to the press and did anyone who leaked this information lie to the grand jury.  Either of these two items could produce a criminal charge. A deliberate leak to the press for political reasons could make for a strong criminal case, as juries like a motive for criminal actions even when the statute may not require one.  A leak that came from another source might complicate the case.

But why is Judith Miller still in jail?  She didn't print the story and the prosecutor has yet to say what crime her testimony is needed for in this grand jury investigation.  Even if this can't be stated to the press and public, has this been disclosed ex parte to the court?   

(esp)

                                                                                                             

UPDATE (7/11):  Needless to say, the White House press corps was quite interested in the status of Karl Rove, and the following exchange took place between Press Secretary Scott McClellan and a reporter (full transcript of the press briefing available here):

Q Does the President stand by his pledge to fire anyone involved in the leak of a name of a CIA operative?

MR. McCLELLAN: Terry, I appreciate your question. I think your question is being asked relating to some reports that are in reference to an ongoing criminal investigation. The criminal investigation that you reference is something that continues at this point. And as I've previously stated, while that investigation is ongoing, the White House is not going to comment on it. The President directed the White House to cooperate fully with the investigation, and as part of cooperating fully with the investigation, we made a decision that we weren't going to comment on it while it is ongoing.

Q Excuse me, but I wasn't actually talking about any investigation. But in June of 2004, the President said that he would fire anybody who was involved in this leak, to press of information. And I just want to know, is that still his position?

MR. McCLELLAN: Yes, but this question is coming up in the context of this ongoing investigation, and that's why I said that our policy continues to be that we're not going to get into commenting on an ongoing criminal investigation from this podium. The prosecutors overseeing the investigation had expressed a preference to us that one way to help the investigation is not to be commenting on it from this podium. And so that's why we are not going to get into commenting on it while it is an ongoing investigation, or questions related to it.

Stay tuned. (ph)

July 11, 2005 in Media | Permalink | TrackBack (0)

Thursday, July 7, 2005

More on Jailing of Judith Miller

Clearly the top [a] story today is the jailing the NYTimes reporter Judith Miller.  The Wall Street Jrl here points out how the prosecutor on this case Patrick J. Fitzgerald has never provided to the court what crime he is pursuing. If there is no crime, is he entitled to this information?  Is it a crime related to the leak (see here), is it perjury, or what is it? Couple this with the reporter's privilege involved, and one does have to ask - where is the necessity of obtaining this information?  Perhaps the most bothersome aspect of this result is that Judith Miller did not write this story. (the one who prints the story goes home and the one who doesn't write it goes to jail). The NYTimes Story is here

This case represents the ultimate conflict of the need of a grand jury to obtain information and the ability of the press to obtain information by providing confidentiality to its sources. But there is a second issue here also - that is who is better equipped to get the best information related to crimes?  If not for the anonymity of "deep throat" would criminal activity have come to light? Where was the government then in getting to the bottom of the investigation?  Can we be assured that the government will do a better job than the press in providing the real truth to what happened here?   

The Wall Street Journal provides a wonderful listing of the biographies of key players related to this investigation.  See here.

July 7, 2005 in Media | Permalink | TrackBack (0)

Wednesday, July 6, 2005

Will Reporters Go to Jail?

Discussed here and here is the ongoing controversy of whether two reporters (one from Time, Inc. and the other from the NYTimes) will face jail for not testifying on their source of a leak that provided them information allowing them to report the name of a CIA operative.  Although Time, Inc. caved in and gave up the reporter's notes, the special prosecutor is not satisfied and wants the two individuals to testify before a grand jury. What happens next remains to be seen (see CNN here). But hats off to the best column seen on this situation, a column here in the Hartford Courant, by Jim Shea, titled, "Can Prisons Survive Reporters?"

The decline of the reporter's privilege is interesting to follow as we see the decline of the attorney-client privilege.  (see NACDL report here) Both appear to be suffering at the hands of the executive branch, specifically prosecutors.

(esp)

                                                                                                

UPDATE: Yes and No

In answer to the question posed above, New York Times reporter Judith Miller will go to jail for civil contempt, but Time reporter Matthew Cooper will testify before the grand jury. Cooper stated that his source had released him from their confidentiality agreement.  An AP story (here) and Wall Street Journal story (here) report that Miller may have received a similar release from her source (who may be the same person as the source for Cooper's articles), but she stated that such a release was "coerced" and so she will continue to protect the person's identity.

For those who are interested, special counsel Patrick Fitzgerald's brief seeking the imposition of a civil contempt on both reporters if they continued to refuse to testify is below. (ph)

Download special_counsel_brief.pdf

Addendum - It looks like Time reporter Matthew Cooper has been spared jail.  According to the Wall Street Journal here, the reporter's source has given the OK for Cooper to talk.  But not Judith Miller of the NYTimes.  Not everyone has her in their fan club.  Check out this story that references Martha Stewart. here  (esp)

July 6, 2005 in Media | Permalink | TrackBack (0)

Tuesday, July 5, 2005

What Will the Reporter's Notes Reveal?

Surprisingly, Time, Inc. has decided to forego the reporter's privilege and provide its notes to a special prosecutor, notes that may provide information concerning an investigation into a leak of the name of a CIA agent.  This position is contrasted with the New York Times that has decided to remain silent and risk a possible contempt and jail order.

Background and commentary on this controversy can be found in this post. The New York Times discusses today the increased threat to journalists of government subpoenas.(here) MSNBC (AP) notes here that "[s]pecial counsel Patrick Fitzgerald, the U.S. attorney in Chicago, has been investigating who in the Bush administration" leaked this information. The matter proceeded through the courts, and a rehearing en banc was denied here. The consequences of such a leak, if the individual(s) is/are who committed this act are found, could involve the following criminal statute:

50 U.S.C. § 421. Protection of identities of certain United States undercover intelligence officers, agents, informants, and sources.

(a) Disclosure of information by persons having or having had access to classified information that identifies covert agent

Whoever, having or having had authorized access to classified information that identifies a covert agent, intentionally discloses any information identifying such covert agent to any individual not authorized to receive classified information, knowing that the information disclosed so identifies such covert agent and that the United States is taking affirmative measures to conceal such covert agent's intelligence relationship to the United States, shall be fined under Title 18 or imprisoned not more than ten years, or both.

(b) Disclosure of information by persons who learn identity of covert agents as result of having access to classified information

Whoever, as a result of having authorized access to classified information, learns the identity of a covert agent and intentionally discloses any information identifying such covert agent to any individual not authorized to receive classified information, knowing that the information disclosed so identifies such covert agent and that the United States is taking affirmative measures to conceal such covert agent's intelligence relationship to the United States, shall be fined under Title 18 or imprisoned not more than five years, or both.

(c) Disclosure of information by persons in course of pattern of activities intended to identify and expose covert agents

Whoever, in the course of a pattern of activities intended to identify and expose covert agents and with reason to believe that such activities would impair or impede the foreign intelligence activities of the United States, discloses any information that identifies an individual as a covert agent to any individual not authorized to receive classified information, knowing that the information disclosed so identifies such individual and that the United States is taking affirmative measures to conceal such individual's classified intelligence relationship to the United States, shall be fined under Title 18 or imprisoned not more than three years, or both.

(d) Imposition of consecutive sentences

A term of imprisonment imposed under this section shall be consecutive to any other sentence of imprisonment.

(esp)

                                                                                                 

UPDATE (7/5): An AP story (here) states that special counsel Patrick Fitzgerald has requested that the court order Matthew Cooper to testify before the grand jury even though his notes have been turned over by Time.  Fitzpatrick also opposes the requests of Cooper and Judith Miller that they be permitted to serve the likely civil contempt by home detention. (ph)

July 5, 2005 in Media | Permalink | TrackBack (0)

Friday, July 1, 2005

Judge Bowdre Speaks to the Press

U.S. District Judge Karon O. Bowdre, who presided of the recently completed criminal trial of Richard Scrushy, gave an interview to the Birmingham News (article here) offering -- in very general terms -- her views on the judicial process during the Scrushy trial.  She refused to comment on the lawyers or any of her rulings, but did discuss generally her approach to the trial and willingness to have a few lighter moments with the jury and lawyers.  On the issue of whether she would accept the case once it was assigned to her, Judge Bowdre noted that she could have recused herself because of contacts with Scrushy's family -- specifically his first wife and their daughter -- but instead ""I decided to grin and bear it, suck it up and do my job."  Good to hear from a federal judge, and a former law professor to boot (not that we professors have to "suck it up" all that often).  I am always leery of judges speaking to the press about cases, especially one which could be back before her if the perjury and obstruction charges are reinstated by the Eleventh Circuit and the government decides to pursue them in another trial.  That said, judges have very few avenues to express informally their position, usually being confined to judicial opinions that are rarely what could be described as a "good read," and their contacts with the local bar must be limited.  Human nature being what it is, Judge Bowdre's comments are hardly problematic, and do not show any favoritism to one side or the other -- although the U.S. Attorney's Office may not feel the same way. (ph)

July 1, 2005 in HealthSouth, Media | Permalink | TrackBack (0)

Monday, June 27, 2005

Changing Strategies in White Collar Cases

The spate of high profile white collar crime trials over the past 18 months (or so) -- kicking off with Martha Stewart and Frank Quattrone through the jury deliberations about the fate of Richard Scrushy and leading up to the anticipated blockbuster Enron conspiracy trial of former CEOs Ken Lay and Jeffrey Skilling -- is triggering a reassessment of some of the so-called conventional wisdom in criminal prosecutions.  An article in Business Week (here) highlights the strategies of prosecutors and defense counsel in white collar crime cases, touching on topics from indictments and plea bargains to pre-trial publicity and the decision whether to have the client testify.  The author is even kind enough to mention this blog (I plead guilty to shameless self-promotion). (ph)

June 27, 2005 in About This Blog, Media, Prosecutions | Permalink | TrackBack (0)

Friday, June 17, 2005

Newspaper Fraud?

The government going after the newspaper?  Not quite.  But DOJ did indict three individuals for their alleged role in defrauding newspaper advertisers.

A press release of the Eastern District of New York reports here "the arrest of three former employees of Newsday and Hoy, subsidiary companies owned and operated by the Tribune Company, for their participation in multiple schemes to overstate paid circulation data in order to induce advertisers to pay millions of dollars in inflated prices for advertising fees between 2002 and 2004." (see also NYTimes story here).  In a footnote the press release of DOJ notes that "[i]n October 2004, the Tribune established a reserve fund of more than $90 million to cover settlements for overcharging hundreds of its advertisers through the fraudulent schemes described below."

Applause go to the Tribune Company for stepping forward and covering the costs to victims by problems that may have occurred within their company.  It sounds like this was a cost they needed to cover, and this is likely to step up internal controls within the company. But one also has to wonder if the indicted individuals received any benefit for their alleged activities, or whether the benefit was solely to the company. From the press release this mail fraud case does not sound like a situation of a company selling out their employees in order to avoid prosecution (something that seems to be happening a lot these days).

To see Newsdays reports see here and here.

(esp)

June 17, 2005 in Fraud, Media | Permalink | TrackBack (0)

Tuesday, June 14, 2005

Desperate Housewives Meets the Executive Suite

The Wall Street Journal (here) has an article entitled "Scorned Spouses Can Wreak Havoc With Mates' Careers" that discusses the recent firing of Robert O'Connell as CEO of MassMutual Financial Group for "willful malfeasance" after an investigation triggered by a report from his wife that O'Connell was having an affair with another executive at the company.  O'Connell's termination was not due to the alleged affair, which was never confirmed (although around the time of O'Connell's termination, the executive also left MassMutual), but because of misuse of a retirement account to enrich himself improperly, among other allegations.  This past March, Boeing CEO Harry Stonecipher was forced out of the company because he was having an affair with another executive at the company that included some rather graphic e-mails (see earlier post here). Former General Electric CEO Jack Welch's highly publicized affair and subsequent divorce proceeding resulted in the company settling an SEC administrative proceeding (here) in October 2004 regarding its failure to adequately disclose perks provided as part of Welch's retirement package.  Sex certainly sells, and is anyone really surprised that when affairs take place in the executive suite they can affect the operation of a company? While an affair in a company can be divisive, the Journal article also discusses a claim by a former client of a law firm that a partner of a firm had an affair with his wife while representing his company.  That is much more likely to be an ethical violation and a breach of the lawyer's fiduciary duty.  A wandering eye can wreak much havoc. (ph)

June 14, 2005 in Media | Permalink | TrackBack (1)

Tuesday, June 7, 2005

Panel Discussion on New Corporate Crime Book by David Skeel

A panel discussion will take place on Wednesday, June 8, at 6:00 p.m. at the New School (Theresa Lang Student Center, 55 West 13th Street, New York) on a new book published by Oxford University Press by Professor David Skeel (University of Pennsylvania), Icarus in the Boardroom: Saving American Business From Corporate Corruption.  The panel members include Kurt Eichenwald of the New York Times and author of Conspiracy of Fools, and Bethany McLean of Fortune and author of The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron.  A copy of the panel announcement is below, and for those interested in attending, if you contact Rudy Faust at Oxford University Press by e-mail (rudy.faust@oup.com) by 2:00 p.m. Wednesday, June 8 (and mention our little blog), he will be able to provide you with complimentary tickets. (ph)

Download skeelevent1.pdf

June 7, 2005 in Media, Scholarship | Permalink | TrackBack (0)

Proving a White Collar Crime

The Baltimore Sun has an interesting article (here) about the difficulties in proving a white collar crime case, including the current prosecutions of former CEOs Richard Scrushy and Dennis Kozlowski.  Blog co-editor Ellen Podgor points out the core problem with these cases, that the evidence of criminality is difficult to come by as compared to a more common street crime: "It's not like a homicide case where you have fingerprints or you have people who can testify: 'I saw him with a gun.'" (ph)

June 7, 2005 in Media | Permalink | TrackBack (0)

Monday, June 6, 2005

Washington Legal Foundation Program on Andersen

WLF June 9 media briefing focuses on fallout from Andersen ruling.

The Washington Legal Foundation (WLF) will be holding a panel discussion on Thursday, June 9 from 9:00-10:00 a.m. on the Andersen decision.  Our panel of experts, moderated by former Attorney General Dick Thorburgh, will analyze the Court’s reasoning and assess the ruling’s broader implications for prosecutors, white collar criminal defense lawyers, and in-house counsels.

In addition to General Thornburgh, WLF’s panel features: Association of Corporate Counsel Vice President for Law and Technology (and former General Counsel) Ronald Peppe; Arnold & Porter LLP partner (and National Association of Criminal Defense Lawyers counsel in Andersen) Robert Weiner; and King & Spalding LLP partner Gary Grindler.  To attend the live session at 2009 Massachusetts Avenue, please RSVP to 202-588-0302.  It is also available for viewing live, and after the event as an archived document.  Access the webcast at www.wlf.org

June 6, 2005 in Media | Permalink | TrackBack (0)

Saturday, June 4, 2005

White Collar Crime Blog Featured in NYTimes

Today's NYTimes here features this white collar crime blog in the column "What's Online."  It provides the commentary on the Court's opinion in Arthur Andersen by co-editor Peter Henning.

(esp)

June 4, 2005 in Media | Permalink | TrackBack (0)

Deep Throat "Probably" Will Not Be Prosecuted

An AP story (here) quotes Attorney General Alberto Gonzales as stating that W. Mark Felt probably will not be prosecuted for his disclosures as "Deep Throat" to Washington Post reporters Woodward and Bernstein.  Gonzales noted that the DOJ "has a lot of other priorities."  Imagine prosecuting a 91-year-old man for helping to bring down a corrupt President (regardless of his motivation at the time, which was likely tied to his loyalty to J. Edgar Hoover) -- in a District of Columbia courtroom, no less. "Well, duh!" (as a teenage member of my household would happily say). (ph)

June 4, 2005 in Media | Permalink | TrackBack (0)

Wednesday, June 1, 2005

Another Appellate Reversal

What little remains of Arther Andersen LLP was not the only victor in the appellate courts yesterday.  Daytime television Judge Glenda Jackson's decision in Amanda Robinson v. Maria Bristow, first aired on April 12 and resulting in an award to Robinson of $2,000 for faulty hair care services, was reversed by Judge Joe Brown.  According to a story in The Onion (here): "Judge Joe Brown presides over one of the nation's Syndicated-Television Courts of Appeals. These appellate courts stand between less-watched Cable-Television District Courts, such as Hatchett's, the Divorce Court, and Judge Larry Joe's Texas Justice courtroom, and higher-Nielsen-rated courts. The nation's highest courts, such as Judge Judith Sheindlin's family court, will only hear cases that appellate TV judges have determined raise questions of importance to a network audience."  I suspect this decision was more widely seen than the Court's opinion in Arthur Andersen. (Thanks to Joe Hodnicki on the Law Librarian Blog (here) for noting the decision).

June 1, 2005 in Judicial Opinions, Media | Permalink | TrackBack (0)

Monday, May 23, 2005

Movie Review

Christine Hurt on the Conglomerate blog (a very worthwhile read) has a review (here) of the movie Enron: The Smartest Guys in the Room, along with an interesting commentary interchange with John Steele (including reference to Body Heat, perhaps the only movie that hinges on the Rule Against Perpetuities).

May 23, 2005 in Media | Permalink | TrackBack (0)

Saturday, May 21, 2005

Blame the Messenger

Things at venerable Wall Street investment bank and brokerage firm Morgan Stanley aren't going particularly well these days.  There is a fight between the old guard from the investment banking side of the firm (called the "Group of 8") seeking the ouster of CEO Phillip Purcell, who comes from the brokerage side of the firm (Dean Witter and all those nattering clients).  This week, a jury in Florida hit the firm with a $1.45 billion judgment for defrauding Ronald Perelman in the sale of Coleman Co. to Morgan Stanley client Sunbeam (see earlier posts here and here), a corporation the was cooking its books while buying the maker of (among other things) grills -- there's something ironic in there, but I'll leave it be for now.  So, when things go bad, what's a company to do?  Why, try to punish the media for reporting all this information, of course, and make sure former employees say good things about you.

From the blog PR Machine (here) comes an amendment Morgan Stanley is sending to media outlets at which it purchases advertising: "In the event that objectionable editorial coverage is planned, agency must be notified as a last-minute change may be necessary. If an issue arises after-hours or a call cannot be made, immediately cancel all Morgan Stanley ads for a minimum of 48 hours."  God forbid the media be critical of a company that keeps shooting itself in the foot . . . oops, I think that's objectionable editorial coverage.  Darn!

In order to maintain support among even its departed troops, Morgan Stanley revealed the following terms of a severance agreement with two former senior investment bankers, one of whom is the highly regarded Joseph Perella, that explains what is meant by "good behavior" to earn a bonus payout from the firm (Form 8-K here):

"Good Behavior" means that (1) through December 31, 2005 (a) the individual has not committed any act that would constitute a "Cancellation Event" (as defined in the applicable settlement and release agreement) and (b) unless waived in writing by the Board of Directors of the Company, the individual will not support or associate himself with the so-called "Group of 8" or become part of any  management team sponsored by such group and (2) through the Termination Date the individual (a) proactively assists in key employee retention efforts, (b) supports the Company and his colleagues in a positive manner, (c) assists in client relationship efforts where helpful or necessary, (d) remains employed by the Company (unless sooner terminated by the Company) and (e) assists in the orderly transition of his duties.

One for all and all for one, especially when it's worth a $6.4 million bonus. (ph)

May 21, 2005 in Media | Permalink | TrackBack (0)

Thursday, May 12, 2005

The Boy Scouts?

Are the Boy Scouts having issues?  According to the Atlanta Jrl Constitution here, an audit is examining the reporting of membership in the Boy Scouts.  The AJC article, although speaking mainly to the Atlanta area, also notes that:

"The FBI is looking into allegations of membership inflation involving the Greater Alabama Council, which governs troops in the northeastern part of that state. Membership rolls in Tampa, Dallas and Oregon also have been questioned."

If the investigation finds evidence of inflated reporting to "boost financial support," will DOJ be looking to prosecute the Boy Scouts and will the investigation be of individuals or the organization?  Is there a local United States Attorney who would be willing to present evidence to a grand jury to investigate these allegations? 

(esp)

May 12, 2005 in Media | Permalink | TrackBack (0)

Tuesday, May 10, 2005

Let's Stick to the Case- Not Senator A

Unfortunately, it sounds like there might be some outside interference in the upcoming David Rosen trial (reported here) that starts today. Yahoo reports here that "A conservative watchdog group with a history of dogging the Clintons urged a Senate panel on Monday to investigate Sen. Hillary Rodham Clinton over a Hollywood fundraiser for which a former staffer faces charges." 

The Rosen indictment, however, appears to present a different picture.  There is NO mention in this indictment of Clinton's involvement in any criminal activity  and there is NO mention in the indictment of her overseeing this individual in any criminal activity.   The indictment even goes so far as to omit her name.   

Perhaps the most fascinating aspect of the Yahoo report is that it reports that "Judicial Watch President Tom Fitton" was "equat[ing] her situation with the ethics controversy surrounding House Majority Leader Tom DeLay, R-Texas, who has been criticized for privately funded travel." We reported on Tom DeLay's financial issues here.

Hopefully, politics will not interfere in the trial of David Rosen, who stands charged with four counts of a 1001 violation.  It's a sad day when politics becomes a part of our criminal justice process.

(esp)

May 10, 2005 in Media | Permalink | TrackBack (1)