Monday, July 23, 2018

Government's Exhibit List in U.S. v. Manafort

For all of you Manafort trial junkies, here is the Government Exhibit List, recently filed in U.S. v. Paul J. Manafort, Jr., set to start soon in U.S. District Judge T.S. Ellis, III's Alexandria courtroom.

Here also is Judge Ellis's Order Denying Paul Manafort's Motion for Change of Venue.  Judge Ellis ruled last week that Manafort is not entitled to a presumption that any Alexandria federal trial jury would be partial to the government. If Manafort can establish actual prejudicial partiality through voir dire, a herculean task under current federal criminal law, Judge Ellis will revisit the issue.

(wisenberg)

July 23, 2018 in Corruption, Current Affairs, Fraud, International, Judicial Opinions, Money Laundering, Mortgage Fraud, Obstruction, Prosecutions | Permalink | Comments (0)

Monday, June 11, 2018

A Deep State Story: The James Wolfe Indictment

Here is the Indictment returned late last week in U.S. v. James Wolfe. Wolfe worked for 30 years for the United States Senate Select Committee on Intelligence ("SSCI") handling top secret and other classified information provided by the Executive Branch to Congress. According to the Indictment, Wolfe leaked the identity of "Male-1" to at least two reporters on two separate occasions and then lied about it to FBI Special Agents. Male-1 is none other than Carter Page and it is clear that the leaks were intended to damage Donald Trump. Reporter #2, referenced in the Indictment, is New York Times reporter Ali Watkins who was romantically involved with Wolfe for almost four years. Records of Watkins' email and phone contacts (but apparently not their contents) were subpoenaed from third party providers. Andrew McCarthy of NRO Online has commentary here, while Alex Pappas of Fox News examines some of Ms. Watkins' embarrassing historical tweets concerning the identity of leakers and the propriety of sleeping with sources. The press and certain members of Congress are concerned, as well they should be, about DOJ's capture of journalistic records. But keep in mind that the press is not the only institution with a watchdog role. The SSCI performs that function as well, and does so officially, with respect to intelligence-related oversight, and it is ironic (in a bad way) that its Chief of Security, if the charges are accurate, betrayed SSCI's trust. At this point Wolfe has only been charged, under 18 U.S.C. Section 1001 (the Martha Stewart statute) with lying to the FBI.

(wisenberg)

June 11, 2018 in Celebrities, Congress, Current Affairs, Investigations, Martha Stewart, Media, News, Obstruction, Prosecutions, Statutes | Permalink | Comments (0)

Saturday, May 5, 2018

That's Entertainment: Judge Ellis and the Hearing on Manafort's Motion to Dismiss

Attached is the transcript of  yesterday's hearing in the Eastern District of Virginia on Paul Manafort's Motion to Dismiss the Indictment against him: USA v PAUL J MANAFORT JR - 5-4-2018 Hearing on Motion to Dismiss. The hearing was before Judge T.S. Ellis III and was characterized by Judge Ellis's typically blunt and withering wit.

Here are some takeaways:

  1. Despite the headline worthy comments of Judge Ellis, the Court will reject Manafort's argument that the Indictment should be dismissed because the Order appointing Mueller is broader than the Special Counsel regulation allows. DAG Rod Rosenstein's  August 2 2017 Letter Re The Scope of Investigation and Definition of Authority makes clear that Mueller had the authority from the first day of his appointment, on May 17, 2017, to investigate Manafort for colluding with Russian officials during the 2016 election in violation of U.S. laws and for crimes arising out of payments Manafort received from former Ukrainian President Victor Yanukovych. Judge Ellis indicated that he considered this to be the government's strongest argument. Unless Judge Ellis believes that Rosenstein's August 2 letter was an after-the-fact sham, the letter puts an end to Manafort's central claim. Judge Ellis may also find, although this is not as certain, that the Special Counsel regulation creates no personal rights for Manafort that are enforceable in a judicial proceeding. In other words, this is a non-justiciable intra-branch matter within the Department of Justice.  
  2. It was striking to me that Michael Dreeben, who spoke for the government, did not lead with the argument that Rosenstein's August 2 letter resolves the question of whether Mueller is acting within his authority. Why not? Is it because, Mueller does not want a detailed factual inquiry on this point? During the motions hearing, both sides referenced Rosenstein's December 13, 2017 House Judiciary Committee testimony. Here are relevant Excerpts from that testimony, in which Rosenstein stated under oath that "the specific matters are not specified in the [May 17] order. So I discussed that with Director Mueller when he started, and we've had ongoing discussion about what is exactly within the scope of his investigation." (Rosenstein could not say with 100% certainty what parts of Mueller's investigation were an expansion and what parts were a clarification of Mueller's original mandate. He promised to get back to the House Judiciary Committee on this point.] Dreeben told Judge Ellis that the "specific factual  [August 2] statement, as [DAG] Rosenstein described in his Congressional testimony, was conveyed to the special counsel upon his appointment in ongoing discussions that defined the parameters of the investigation that he wanted the special counsel to conduct." So which is it? Was the scope of the investigation crystal clear on March 20, 2017 or on May 17, 2017, or did it have to be hammered out in ongoing discussions. Rod Rosenstein's May 17 2017 Order Appointing Robert S. Mueller III clearly states that Mueller has the authority to conduct the investigation confirmed by former FBI Director Comey in his March 20, 2017 Congressional testimony. Manafort's attorney, Kevin Downing, wanted to see any memos written by Rosenstein leading up to Mueller's appointment to help determine the scope of Mueller's authority. When Judge Ellis asked Downing how he knew such memos existed, Downing, who worked under Rosenstein for five years, replied: "Mr. Rosenstein is a stickler for memos being written, for there to be a written record for the actions of the Department of Justice." Downing argued that if Rosenstein exceeded his authority in appointing Mueller, Mueller "does not have the authority of a U.S. Attorney." In that event, according to Downing, any indictment procured from the grand jury by Mueller's operation would presumably be null and void.
  3. Fox News's assertions that Judge Ellis accused the Mueller team of "lying" and using "unfettered power" to target Trump are not supported by the record. Judge Ellis did express extreme skepticism regarding one of the government's arguments and made the undoubtedly true statement that the government was using Manafort to go after Trump.
  4. The non-justiciable, intra-branch dispute argument by Mueller's people could end up biting them in the butt in another context. Expect President Trump to use a similar argument if he is subpoenaed, asserts Executive Privilege, and is challenged on this point by Mueller. Trump will argue that Mueller, as an inferior officer within the President's DOJ, lacks regulatory authority to contest Executive Privilege, and that the entire matter is a non-justiciable, intra-branch dispute. Contrary to general assumptions, U.S. v. Nixon does not settle this issue. The Supreme Court in Nixon rejected President Nixon's justiciability argument, but did so on the basis that Special Prosecutor Leon Jaworski had the explicit authority to contest assertions of Executive Privilege pursuant to the terms of the federal regulation that governed his appointment. As far as I can tell, Special Counsel Mueller has not been given explicit authority to contest issues of Executive Privilege.

(wisenberg)

May 5, 2018 in Corruption, Current Affairs, Defense Counsel, Fraud, Government Reports, Grand Jury, Investigations, Judicial Opinions, News, Obstruction, Perjury, Privileges, Prosecutions, Prosecutors | Permalink | Comments (0)

Tuesday, April 24, 2018

Point of Personal Privilege: The Comey Memos Are Plenty of Nothing

The redacted version of the Comey Memos have now been released and do not on their face come close to establishing criminal obstruction of justice by Donald Trump. What they do show is a new President with no concept of how to appropriately interact with his condescending, schoolmarmish FBI Director.

There are conceivably four potential endeavors to obstruct justice referenced in the memos.

1. According to Comey's notes, the President asks Comey if he can see his way to "letting this go, to letting Flynn go," because, "Flynn is a good guy and has been through a lot." It was an inappropriate request, but it was not an order. Had it been an order, it would have been even more inappropriate, but still not a crime. The President has the constitutional authority to order an investigation closed.

2. The President also asks Comey to "lift the cloud" hanging over him by publicly confirming that the President is not under investigation. Comey had already volunteered to Trump at least twice that Trump was not under investigation. Comey declined the President's request to publicly "lift the cloud" and lectured him on the appropriate channels through which to make such a request. There was nothing wrong with the President's request and there would have been nothing wrong with Comey acceding to it

3. After asking Comey to "lift the cloud" for the umpteenth time, Trump tells Comey, "I have been very loyal to you, very loyal, we had that thing you know." Comey believes this was a reference by Trump to their January 27, 2017 conversation in which Comey expressed his preference to remain on the job as FBI Director and Trump asked for and received a pledge of "honest loyalty" from Comey. In other words, Comey believes that Trump wanted Comey to "lift the cloud" hanging over Trump in return for Comey keeping his job. Assuming that Trump actually said this, it was not a crime. Trump has the constitutional authority to order an investigation closed. He has the authority to fire any non-civil service appointee for refusing to carry out such an order. Trump could have told Comey, "lift the cloud or I will fire you." Ergo, he can certainly suggest that Comey owed it to him to "lift the cloud."

4. Trump repeatedly told Comey that the Russian hooker story was false, because Trump did not stay overnight in Russia during the 2013 Miss Universe Pageant. Apparently Trump did stay overnight. Is this a false statement to a law enforcement officer by someone endeavoring to obstruct justice? The Government would have to prove that Trump actually made this statement knowing it was false and knowing that he was under criminal investigation. But Trump had been already been told by Comey, multiple times, that he was not under investigation. Thus, even assuming that Trump made the statement in question and intentionally lied (as opposed to misremembering), a prosecutor would have to show that Trump was endeavoring to obstruct a criminal investigation, despite having been told that there was no investigation.

If Comey's notes are accurate, the President was a boorish novice with no comprehension of long-accepted norms regarding acceptable interaction between the President and his FBI Director. That doesn't make Trump a criminal.

(wisenberg)

 

April 24, 2018 in Current Affairs, Investigations, Legal Ethics, Obstruction, Prosecutions | Permalink | Comments (0)

Tuesday, April 10, 2018

Michael Cohen's Attorney Speaks - No Need For a Search

Playing the press has become an important component in handling a white collar case.  In the past, one might remain silent and let the case be resolved prior to making any statements, especially press-related statements.  With the speed of the internet, it often becomes necessary for attorneys to respond to allegations to provide a level playing field.  It, therefore, was no surprise to see Michael Cohen's attorney, Stephen M. Ryan, issuing a press release. (see here).  He calls the US Attorneys Office "completely inappropriate and unnecessary."  He argues that his client "has cooperated completely with all government entities, including providing thousands of non-privileged documents to the Congress and sitting for depositions under oath."

It is interesting to see the use of a search here as opposed to a subpoena.  The downside of the government using a search is that it is more expensive, not secret like the grand jury process, requires probable cause, and if the probable cause is later found lacking the entire search can be invalidated. The upsides of a search are surprise, getting the material immediately without having to wait for the grand jury, obtaining items that might be found in plain view, and also receiving possible incriminating statements from individuals while performing the search, this latter one mostly applicable in the corporate or business context. One can argue obstruction of justice either way.  On one hand you get the items in question before there is any possibility of them being destroyed.  On the other hand if documents were destroyed, prosecutors would have a "short-cut offense" to charge of obstruction of justice.

In my Article, White Collar Shortcuts, forthcoming in the Illinois Law Review, I note how prosecutors are using investigative and charging "short-cuts" more frequently in white collar cases.  Whether the use of a search warrant was a "short-cut" here, remains to be seen.  

(esp)

April 10, 2018 in Defense Counsel, Investigations, Obstruction, Prosecutors, Searches | Permalink | Comments (0)

Wednesday, April 4, 2018

Mueller: What Could He Do And When Could He Do It?

Monday night, in the U.S. District Court for the District of Columbia, Special Counsel Robert Mueller filed his Response [Government's Response in Opposition to Motion to Dismiss] to Paul Manafort's Motion to Dismiss the Superseding Indictment. Manafort's Motion to Dismiss is bottomed on the alleged invalidity of Acting AG Rod Rosenstein's May 7 2017 Order Appointing Robert S. Mueller III as Special Counsel and defining Mueller's jurisdiction. As part of his Response, Mueller referenced and filed Attachment C, a redacted version of Rosenstein's  August 2 2017 Letter Re The Scope of Investigation and Definition of Authority.

Before Monday night there was no public knowledge of this August 2 letter, which sets out in detail, among other things, the specific matters already under investigation before Mueller came on board.  According to the August 2 letter, the May 7 Order had been "worded categorically in order to permit its public release without confirming specific investigations involving specific individuals." The private August 2 letter, in contrast, "provides a more specific description of your authority." Recall that the May 7 Appointment Order authorized Mueller to "conduct the investigation confirmed by then-FBI Director James B. Comey in testimony before the House Permanent Select Committee on Intelligence on March 20, 2017, including...(i) any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump; and (ii) any matters that arose or may arise directly from the investigation; and (iii) any other matters within the scope of 28 C.F.R § 600.4(a)." The August 2 letter unequivocally states that "[t]he following allegations were within the scope of the Investigation at the time of your appointment and are within the scope of the Order:

[Redacted]

• Allegations that Paul Manafort:

    º Committed a crime or crimes by colluding with Russian government officials with respect to the     Russian government's efforts to interfere with the 2016 election for President of the United States, in     violation of United States law;

 º Committed a crime or crimes arising out of payments he received from the Ukrainian     government  before and during the tenure of President Viktor Yanukovych;

[Redacted]"

In other words, FBI Director Comey was already investigating Manafort for possible criminal collusion with the Russians and for payments Manafort received from Yanukovych, before Mueller came into the picture. By including the Yanukovich payments in his probe of Trump, Comey displayed an aggressiveness sadly absent from the investigation of Ms. Clinton's email server.

What is odd is that Rosenstein's August 2 letter was sent almost three months after Mueller began his inquiry. You would think that such a specific private memo detailing the scope of Mueller's investigative authority would have been issued contemporaneously with the May 7 Order. That it wasn't suggests there were disagreements in defining the outer boundaries of Mueller's charter or that Mueller or Rosenstein began to perceive problems with the wording of the May 7 Order and foresaw the possibility of just the sort of Motion to Dismiss ultimately filed by Manafort.

Rachel Stockman at Law and Crime notes here that the more specific delineation of authority laid out in the August 2 letter came one week after the raid on Manafort's home. Mueller may have wanted written reassurance that the search and seizure were within his authority ab initio, or, as we say in Texas, from the get-go.

(wisenberg)

April 4, 2018 in Corruption, Current Affairs, Defense Counsel, Government Reports, Grand Jury, Investigations, News, Obstruction, Prosecutions, Prosecutors, Searches | Permalink | Comments (0)

Thursday, March 22, 2018

Dowd Resigns From Trump Legal Team

The Washington Post has the story here.

(wisenberg)

March 22, 2018 in Current Affairs, Defense Counsel, Investigations, Obstruction, Prosecutions | Permalink | Comments (0)

Wednesday, March 21, 2018

Supreme Court Overturns Conviction And Narrows Reach Of Tax Code's Omnibus Clause

Today in United States v. Marinello, the U.S. Supreme Court resolved a circuit split and significantly narrowed the reach of Internal Revenue Code Section 7212(a)'s Omnibus Clause, which makes it a felony to "corruptly or by force...endeavor[r] to obstruct or imped[e] the due administration of this title [the Internal Revenue Code]."

The Court held that the phrase "'due administration of [the Tax Code]' does not cover routine administrative procedures that are near-universally applied to all taxpayers, such as the ordinary processing of tax returns. Rather the clause as a whole refers to specific interference with targeted governmental tax-related proceedings, such as a particular investigation or audit."

Justice Breyer  wrote the 7-2 opinion for the Court. Justice Thomas, joined by Justice Alito, dissented.

The majority relied in part on analogous cases from its general obstruction jurisprudence, including United States v. Aguilar and Arthur Andersen v. United States. Although the focus was on the nexus required between the obstruction and a particular act of administration, the Court also stressed the rule of lenity and the need to provide fair warning to the public. This approach could be potentially relevant to any obstruction of justice case that Special Counsel Mueller may one day bring against President Trump or administration officials. Some of the theories floating around cable television about what constitutes obstruction under the federal criminal code are unusually broad and unlikely to survive rigorous analysis based on Aguilar and Arthur Andersen.

(wisenberg)

 

March 21, 2018 in Arthur Andersen, Fraud, Investigations, Judicial Opinions, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0)

Tuesday, March 20, 2018

A Swamp Story: "Rudy Is On The FISA Court!"

Lost in the shuffle of last weekend's uproar over the McCabe firing was the astonishing disclosure of yet another unredacted series of text messages between the FBI's Peter Strzok and Lisa Page. The Federalist has the story here. These messages and others had been provided to Congress previously in heavily redacted form, but Congressmen or Congressional investigators wishing to see them unredacted had to travel to DOJ.

Strzok had a pre-existing friendship with U.S. District Court Judge Rudolph "Rudy" Contreras, of the D.C. District Court. As luck would have it, Contreras was appointed to the Foreign Intelligence Surveillance Court ("FISC" or "FISA Court") in May 2016. On July 25, 2016, Page texted Strzok, saying "Rudy is on the [Foreign Intelligence Surveillance Court]! Did you know that?" Strzok responded that he did, adding "I need to get together with him." The two then discussed ways in which Strzok could run into Contreras during a social setting, as a mask for some kind of substantive discussion. Strzok texted Page that “[REDACTED] suggested a social setting with others would probably be better than a one on one meeting. I'm sorry, I'm just going to have to invite you to that dinner party.” Strzok thought he needed to "come up with some other work people cover for action.” Page replied "Why more? Six is a perfectly fine dinner party." During the exchange, Strzok expressed skepticism that such a meeting could be accomplished without forcing a recusal by Conteras, while Page assured him that the bar for recusal was a high one.

Do we even need to say how utterly repulsive it is for Strzok (a high-level FBI Supervisory Special agent) and Page (an FBI lawyer) to be seriously thinking of arranging a fake social get together in order to convey information ex parte to a sitting federal judge?

Most of the press coverage of the text exchange has focused on Judge Contreras' later recusal from the Michael Flynn criminal case. This misses the point entirely. Flynn was not even being criminally investigated in July 2016 and wasn't charged until December 2017. There is no way either Strzok or Page would know that Flynn would be charged, much less who the judge would be. This is all about the FISA Court. The FBI opened its Russian collusion case in late July 2016, right around the time that Page and Strzok were texting each other about Rudy. Strzok himself opened the case. It seems likely to me that the pair hoped Contreras would be sitting on the panel that would one day review a FISA application related to the Trump campaign. That affidavit was submitted in October 2016.   Sources close to Strzok have told at least one journalist that the meeting never took place.

Monday's WSJ story (subscription required) by Del Quentin Wilber on the Strzok-Page exchanges, mentions that Contreras was appointed to the FISA Court but leads with a focus on the Flynn case and does nothing to connect any dots regarding the proximity in time between the texts and the onset of the formal (or any informal) FBI investigation. The story does not even mention the FISA Court's approval of the October 2016 FISA warrant application for Carter Page. That's not surprising given Weber's Wilber's previous softball reporting on the pair. Strzok and Page were sources for Weber's Wilber's WSJ predecessor on the DOJ beat, Devlin Barrett and it was FBI leaks to Barrett in October 2016 that led in part to the recent firing of Andrew McCabe.

 

(wisenberg)

 

March 20, 2018 in Investigations, Judicial Opinions, Obstruction, Perjury, Prosecutions, Prosecutors | Permalink | Comments (0)

Saturday, March 17, 2018

Point of Personal Privilege: Means & Ends In the War Against Trump

News is coming in fast and furious, since Friday night's firing of Former FBI Deputy Director Andrew McCabe.

First, there was McCabe's own defiant and somewhat poignant statement, seriously marred by his ludicrous suggestion that the career professionals at DOJ-OIG and FBI-OPR, appointed respectively by Obama and Mueller, were only doing Donald Trump's bidding.

Second, came President Trump's mean spirited tweet celebrating McCabe's firing.

Third out of the box? Trump Lawyer John Dowd's nutty call for Rod Rosenstein to shut down Mueller's probe. What else?

Brennan's tirade against Trump amid reports that McCabe has given notes of his conversations with Trump to Mueller. (Who hasn't done that?)

Jonathan Turley suggests here that McCabe's full statement poses potential problems for Comey, because McCabe claims that his conversation with the WSJ was authorized by Comey. This arguably contradicts Comey's sworn statement to Congress that he did not leak or authorize the leak of Clinton investigation details to the press. Turley also believes that McCabe's firing may embolden Trump to fire Mueller if McCabe, unlike Flynn, isn't prosecuted for lying to investigators. To top things off, there is the growing consensus that DOJ-FBI's original probe, taken over by Mueller after Comey's firing, was marred from its inception by the FISA affidavit's over-reliance on the Steele Dossier, made worse by the failure to disclose (to the FISA judges) that the dossier was bought and paid for by the DNC and Clinton's campaign. 

Some things to keep in mind. The ends almost never justify the means. Whatever McCabe thought of Trump, he had no business leaking classified law enforcement information to a WSJ reporter in order to protect the Bureau's image surrounding its handling of the Clinton email and Clinton Foundation investigations. And of course McCabe had no right to lie about it to investigators, under oath or otherwise.

In the rush to hate Trump at all costs, care must be taken not to compromise the criminal law, investigative norms, or the Constitution. Trump may be unfit in many ways to serve as President of the United States. But he won the election. I see no substantive evidence on the public record now before us that he did so unlawfully. There is a difference between his repeated violations of decades-long institutional norms, regardless of how repulsive those violations may be, and impeachable or criminal offenses. Failure to recognize this difference, or bending the rules to get Trump, will have disastrous consequences in the long run.

(wisenberg)

March 17, 2018 in Celebrities, Corruption, Current Affairs, Defense Counsel, Government Reports, Investigations, Obstruction, Perjury, Prosecutions, Prosecutors | Permalink | Comments (0)

Tuesday, February 20, 2018

Van Der Zwaan Plea and Statement of the Offense

Hey, if the Office of Special Counsel can't decide the proper capitalization of his name, don't expect me to. Here are the  Van Der Zwaan Plea Agreement and the  Van Der Zwaan Statement of the Offense.

 (wisenberg)

February 20, 2018 in Current Affairs, International, Investigations, News, Obstruction, Perjury, Prosecutions, Prosecutors | 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)

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)

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)

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)

Saturday, April 9, 2016

Settlement by Trump Required Alleged Victims to Tell DA They Don't Want to Assist

The New York Times reported on Tuesday, April 5 that Donald Trump, contrary to his asserted practice of refusing to settle civil cases against him, had settled a civil fraud suit brought by disgruntled purchasers of Trump SoHo (New York) condos setting forth fraud allegations that also were being investigated by the District Attorney of New York County ("Donald Trump Settled a Real Estate Lawsuit, and a Criminal Case Was Dismissed").  The suit alleged that Trump and two of his children had misrepresented the status of purchaser interest in the condos to make it appear that they were a good investment.

What made this case most interesting to me is language, no doubt inserted by Trump's lawyers, that required as a condition of settlement that the plaintiffs "who may have previously cooperated" with the District Attorney notify him that they no longer wished to "participate in any investigation or criminal prosecution" related to the subject of the lawsuit.  The settlement papers did allow the plaintiffs to respond to a subpoena or court order (as they would be required by law), but required that if they did they notify the defendants.

These somewhat unusual and to an extent daring conditions were no doubt designed to impair the District Attorney's investigation and enhance the ability of the defendants to track and combat it, while skirting the New York State penal statutes relating to bribery of and tampering with a witness.  The New York statute relating to bribery of a witness proscribes conferring, offering or agreeing to confer a benefit on a witness or prospective witness upon an agreement that the witness "will absent himself or otherwise avoid or seek to avoid appearing or testifying at [an] action or proceeding" (or an agreement to influence his testimony). Penal Law 215.11 (see also Penal Law 215.30, Tampering with a Witness).  Denying a prosecutor the ability to speak with prospective victims outside a grand jury makes the prosecutor's job of gathering and understanding evidence difficult in any case.  Here, where it is likely, primarily because of a 120-day maximum residency limit on condo purchasers, that many were foreigners or non-New York residents and thus not easily served with process, the non-cooperation clause may have impaired the investigation more than it would have in most cases. 

A clause requiring a purchaser to declare a lack of desire to participate, of course, is not the same as an absolute requirement that the purchaser not participate.  And, absent legal process compelling one's attendance, one has no legal duty to cooperate with a prosecutor.  It is questionable that if, after one expressed  a desire not to participate, his later decision to assist the prosecutor voluntarily would violate the contract (but many purchasers would not want to take a chance).  The condition of  the contract thus, in my view,  did not violate the New York statutes, especially since the New York Court of Appeals has strictly construed their language.  People v. Harper, 75 N.Y.2d 373 (1990)(paying victim to "drop" the case not violative of statute).

I have no idea whether the settlement payment to the plaintiffs would have been less without the condition they notify the District Attorney of  their desire not to cooperate.  And, although the non-cooperation of the alleged victims no doubt made the District Attorney's path to charges more difficult, the facts, as reported, do not seem to make out a sustainable criminal prosecution.  Allegedly, the purchasers relied on deceptive statements, as quoted in newspaper articles, by Mr. Trump's daughter Ivanka and son Donald Jr. that purportedly overstated the number of apartments sold and by Mr. Trump that purportedly overstated the number of those who had applied for or expressed interest in the condos,  each implying that the condos, whose sales had actually been slow, were highly sought.  A threshold question for the prosecutors undoubtedly was whether the statements,  if made and if inaccurate, had gone beyond acceptable (or at least non-criminal) puffing into unacceptable (and criminal) misrepresentations.

Lawyers settling civil cases where there are ongoing or potential parallel criminal investigations are concerned whether payments to alleged victims may be construed by aggressive prosecutors as bribes, and often shy away from inserting restrictions on the victims cooperating with prosecutors.  On the other hand, those lawyers (and their clients) want some protection against a criminal prosecution based on the same allegations as the civil suit.  Here, Trump's lawyers boldly inserted a clause that likely hampered the prosecutors' case and did so within the law.  Nonetheless, lawyers seeking to emulate the Trump lawyers should be extremely cautious and be aware of the specific legal (and ethical) limits in their jurisdictions.  For instance, I personally would be extremely hesitant to condition a settlement of a civil case on an alleged victim's notifying a federal prosecutor he does not want to participate in a parallel federal investigation.  The federal statutes concerning obstruction of justice and witness tampering are broader and more liberally construed than the corresponding New York statutes.

 

April 9, 2016 in Celebrities, Civil Litigation, Current Affairs, Defense Counsel, Fraud, Investigations, Legal Ethics, News, Obstruction, Prosecutors | Permalink | Comments (0)