Wednesday, June 2, 2010
As noted here, New York County District Attorney Cyrus R. Vance issued via his Chief Assistant District Attorney Daniel R. Alonso a Memo pertaining to charging organizations. One aspect caught my eye - privileges and attorney fees. The Memo states:
"... although the Office will not ordinarily request that an organization waive valid claims of attorney-client privilege or work product protection in order to be credited for its cooperation, where an organization relies on the attorney-client privilege or the work product doctrine to obstruct the investigation, or when it refuses to disclose relevant facts that will further the investigation, these factors will militate against cooperation credit. Similarly, although the Office will not ordinarily be influenced by an organization’s decision to provide for the legal expenses of its directors, officers, employees, or agents, or its decision to enter into an appropriate joint defense agreement, if such practices are made as part of an effort to obstruct, in any way, an investigation or prosecution, or if they result in relevant information’s becoming unavailable to the investigation, they will be considered in any decision whether to prosecute the organization." (footnote omitted)
On a brighter note, the policy does recognize the importance of collateral consequences in making a decision to charge a corporation.
Being corporate counsel seems to be more challenging these days in that the individual needs to be apprised of all the laws in the applicable jurisdictions - which these days can be international. He or she also has to be familiar with the policy guidelines for the different entities they operate within - which could be many states.
Thursday, October 1, 2009
NACDL's 5th Annual Defending the White Collar Case Seminar - "Choppy Waters - The Ethics of Privilege and Disclosure," Thursday, October 1, 2009
Guest Blogger: Peter D. Hardy, Post & Schell, P.C. (Philadelphia, PA)
Moderator: Gerald B. Lefcourt
Gerald Lefcourt noted that it has been over 46 years since the Brady decision was issued, yet we still have no firm definition of Brady that most federal prosecutors can follow. There are varying and conflicting practices amongst prosecutors in regards to definitions and the proper time frame for disclosures. Moreover, incidents of Brady violations or potential violations are not uncommon.
Robert Cary represented Senator Ted Stevens. The heart of the defense was a note that Senator Stevens had sent to Bill Allen, the key government witness and the builder making improvements on the Senator’s chalet, which stated in part that the Senator wanted to make sure that Allen got fully paid, and that “friendship is one thing, but compliance with these ethics rules is another[.]” The government responded to this note by eliciting testimony from Allen that the note was just the Senator trying to concoct a cover story. After the guilty verdict, the second FBI agent on the case filed a self-described whistleblower complaint regarding conduct by the prosecution team. The Court ordered the government to provide discovery regarding the complaint, and a new prosecution team was put in place. New discovery contradicted directly the government’s theory and evidence at trial that Allen regarded the note as a mere cover story. Carey described the Attorney General as a hero for moving to dismiss the case. All of this happened only after a long trial and post-trial process (as well as Senator Stevens losing his re-election bid). Judge Sullivan, who oversaw the case, is to be commended for being careful and not simply taking the government’s word.
So, what should be done? Judge Gertner explained that the solution needs to involve the rules (ethical, court, and criminal procedure). The case law has slid into an outcome-determinative approach, which makes it very hard for the prosecutor to predict. The materiality standard is colliding with the harmless error doctrine. Brady had more to do with a failure to turn over evidence impugning the system, rather than predictions regarding potential outcomes. The definition of Brady should be re-assessed, and there also should be deadlines set for when information should be turned over: for example, 28 days before.
Professor Green described how the ABA code of ethics set forth in the 1970s a discovery rule for prosecutors: you must turn over information that would tend to negate the guilt of the accused. Everyone had assumed that this rule overlapped with Brady. But, the rule is not co-extensive with Brady – for example, it does not have a materiality standard. Rather, it categorically requires the disclosure of favorable information, or information which might lead to favorable evidence. A materiality test is really directed at post-conviction review, and is not well suited to govern the conduct of prosecutors at the time they are making their discovery decisions. Defense attorneys also need to know about exculpatory information in order to assess a case and decide whether or not to proceed to trial.
Paul Shechtman described federal plea agreements in New York which require waivers by the defendant of either impeachment and/or all exculpatory information. These plea waivers apparently run afoul of the rules just described by Professor Green. Current cases strongly suggest that prosecutors need more education regarding their obligations under Brady, in order to be better able to appreciate the exculpatory value of evidence. We need to reassess Brady, which has been hijacked by the materiality doctrine. The burden now is on the defendant to show materiality. In Brady, Justice Marshall wrote in dissent that the test instead should be harmless error, in which the government has the burden to show that the conviction should not be reversed. The materiality requirement invites courts to preserve convictions, despite poor decisions and poor decision-making processes by prosecutors.
Larry Thompson described a case in Detroit in which the prosecutor made false statements to the Court, and actually was prosecuted himself. Judge Gertner noted that part of the problem here is lack of meaningful remedies. There is professional discipline, but discipline is unlikely.
NACDL's 5th Annual Defending the White Collar Case Seminar - "Pay to Play - The Current Wave of Public Corruption Cases," Thursday, October 1, 2009
Guest Blogger: Linda Friedman Ramirez, P.A. (Tampa St. Petersburg, FL)
Panel Moderator: Abbe David Lowell
NACDL's 5th Annual White Collar Crime Conference kicked off today with the Pay to Play
panelists jumping into a thorough discussion of the key issues in the
defense of a public corruption case via a hypothetical created by panel
moderator Abbe Lowell.
The panel agreed that attorneys are needed for all individuals and
entities subpoenaed. The first question is whether joint defense
agreements are more problematic than helpful. There seemed to be a
consensus that there might be some benefits, particularly when working
with attorneys with whom there has been no prior experience or quirky
clients, but most panelists expressed reservations about their use.
Next up - the panelists discussed the subpoena for records relating
to the legislative process and the Speech and Debate privilege. Who
asserts? The panel propounded on the importance of collaboration
between the attorney for Alice and the attorney for House. Also, how to
handle keeping back documents that may be privileged and the concept of
using a privilege log? TheDOJ’s view of the Speech and Debate clause is in a great deal of flux, and DOJ’s view has changed radically. Further, if it is a federal subpoena does this change anything? And how does the counsel for Funhouse
handle its own subpoena? The four panelists explored the issues
relevant to subpoenas for contribution records and the intersection
with the First Amendment.
Another important issue for practitioners is how to respond to precharge or pretrial publicity in high profile cases, including responding to questions by investigative reporters. Clients often have a strong desire to speak to the public. Different responses from the panelists: give clients a limited script; have the attorney act as spokesperson -- though that raises the concern for attorneys of moving into the realm of public relations; hiring surrogates.
Also, what happens if a client wants to make his case to the prosecutor? Is this a good strategy? Of course the most important issues are whether the facts are sufficient for a prosecution pursuant to 18 U.S.C. 1346? Is conflict of interest + non-disclosure enough under this statute? This was the meat of the panel and the discussion was exciting and demonstrated the knowledge of the panel. Also, Moderator Abbe Lowell injected into the discussion 18 U.S.C. 666, which is the jurisdictional statute for prosecution of offenses committed by state public officials and the requirement of a connection with the receipt of federal funds 18 U.S.C 666 (b).
By the close of the panel it was clear that an hour and a half was not nearly enough time to explore this topic!
Wednesday, September 30, 2009
The Ninth Circuit Court of Appeals issued a decision in United States v. Ruehle,a case that opens by saying "[w]e here explore the treacherous path which corporate counsel must tread under the attorney client privilege when conducting an internal investigation to advise a publicly traded company on its financial disclosure obligations." The lower court had suppressed "all statements from former CFO William J. Ruehle to attorneys from Irell & Manella LLP, Broadcom's outside counsel, regarding the stock option granting practices at Broadcom." In reversing this decision, the Ninth Circuit, rejected the lower court finding that Ruehle "had a reasonable belief that Irell and Manella were his lawyers prior to the June 1, 2006 interrogation by Irell, and that he never gave informed written consent, either to the dual representation by Irell or the disclosure of privileged information to third parties..." The Ninth Circuit found that the lower court had "applied a liberal view of the privilege that conflicts with the strict view applied under federal common law, which governs here." The Ninth Circuit stated that it "reject[s] the district court's contrary finding that an expectation of confidentiality was established because, upon review of the record, we are left with the 'definite and firm conviction that a mistake has been committed' and thus we determine that this factual finding was clearly erroneous." Some thoughts on this decision:
- Although at first glance it may seem like the Ninth Circuit is usurping a factual finding of the lower court, there is more to this picture - it is factual finding, yes, but one that had been determined by a different legal standard. What is interesting here is that the Ninth Circuit chose not to remand to the lower court when changing the operative standard for determining the issue. On the other hand, the court's decision implies that the evidence does not create a factual question.
- Every corporate officer needs to be aware that statements made during an internal investigation may end up in the government's lap. One can't always count on an attorney client privilege to protect these statements.
- Outside counsel's job in conducting internal corporate investigations may have just been made more difficult as one wonders if corporate officers will want to cooperate in corporate counsel's internal review.
Sunday, April 19, 2009
The threat of indictment to a corporation is huge, and one need only look at what happened to Arthur Andersen LL.P to reach this conclusion. In the aftermath of Andersen, many corporations have entered into deferred and non-prosecution agreements with the government, paying huge fines but avoiding prosecution. With their "backs against the wall" the companies agree to many controversial terms, including in some cases the waiver of the attorney-client privilege. The net result to the government is not only money, but also evidence that can be used to proceed against individuals within the company.
But how does this scenario play out in the long run. The case of U.S. v. The Williams Companies provides an interesting glance at what can happen when the attorney-client privilege is violated by the company. Williams, an opinion issued this past week by the DC Court of Appeals has the individual asking for discovery in the criminal case, and wanting the government to produce the discovery they received from the company. The problem is that the company does not want the evidence to be produced to the defendant. So the court is left to rule on "a third-party appeal of a discovery order in a criminal case compelling the government to produce 'all materials disclosed' by the third party pursuant to its cooperation with federal investigators during a criminal investigation of the third party and others." The court remands the case to the district court to assess "which documents were material to the defense."
The moral of the story is - you may think that your back is against the wall to enter into a deferred prosecution agreement, but before you agree to waive the attorney-client privilege, be aware of the long-term ramifications of this decision.
(esp) (blogging from Chicago)
Sunday, February 15, 2009
On February 13, 2009, Senator Arlen Specter introduced a bill "to provide appropriate protection to attorney-client privileged communications and attorney work product." (See Thomas here - go to S. 445) The bill:
"Prohibits federal prosecutors and investigators across the executive branch from requesting or conditioning charging decisions on an organization’s reasonable assertion of attorney-client privilege or decision to pay of attorneys fees for an employee. This bill emphasizes that the right to counsel is chilled unless the confidential communications between attorneys and their clients are protected by from compelled disclosure. The Department of Justice has changed its rules three times in the past few years, and attorneys and clients need clarity and an unchanging rule Cosponsors include: Senators Carper, Cochran, Kerry, Landrieu, and McCaskill."
(esp) (w/ a hat tip to Tiffany M. Joslyn)
Tuesday, October 7, 2008
John Wagner of the Washington Post has an article titled, Ethics Counsel Testimony Is Sought in Currie Probe. It is an important investigative piece as it reports on a subpoena that was served on the Maryland legislature's ethics counsel. The federal investigation appears to involve Senator Ulysses Currie and the feds seem to want attorney-client privileged material of the ethics counsel. It is hard to imagine that federal prosecutors would not realize the ramifications of such a move. Once you start subpoenaing testimony from an ethics counsel, individuals will stop seeking the advice of that counsel. The net result will be less compliance with the law.
(esp) (hat tip to Neal R. Sonnett)
Thursday, August 28, 2008
On the same day as the Second Circuit issued the Stein (KPMG related) decision (see here), the DOJ issued new guidelines pertaining to principles of federal prosecution of business organizations. The government uses new language with regard to the attorney-client privilege. The guidelines provide that "[e]ligibility for cooperation credit is not predicated upon the waiver of attorney-client privilege or work product protection." Although it is wonderful to see the DOJ finally issuing a statement that will provide guidance to new lawyers in their office to reinforce the importance of the attorney-client privilege, this is not enough.
Guidelines are nothing more than guidelines that serve as internal guidance in the office. Guidelines are not always adhered to, and non-compliance is often left to the department to enforce. (see here) What this new language by DOJ does show is that they support the importance of making sure that the attorney-client privilege remains strong. Legislation, as is proposed, will make this happen.
The Guidelines - Download DOJPrinciples1.pdf
DOJ Press Release - here
Statement by NACDL here.
(esp)(w/ a hat tip to Jack King)
Thursday, July 10, 2008
Why is it that immediately before the legislature is about to make a change that will affect DOJ policy, the DOJ steps in to say - we'll make a change, no need for you Senators to step into this matter. The problem with this approach is that the cosmetic changes that DOJ then makes usually will not resolve all the issues being considered by the congressional committee. And more importantly, where was DOJ when everyone was shouting that change was necessary. DOJ argues that the criminally accused needs to accept responsibility timely. But their failure to act timely in changing policy -- and then announcing the changes just before the legislature acts -- is disturbing.
The latest scenario involves the attorney-client privilege and the famed McNulty Memo, which in prior lives resembled the Holder Memo, then the Thompson Memo, followed by the McCullum revisions. The latest is that Deputy Attorney General Mark Filip sent a letter to Senators Leahy and Specter outlining changes that will be made by DOJ.
The letter states that in the last 18 months DOJ has not approved any attorney-client privilege waivers in the corporate arena. If that's the case, then why not just change the law so the problems of the past never happen again?
The letter provides that cooperation will be measured by facts and evidence and not by waivers. But who will provide the oversight to make sure that this actually happens in the U.S. Attorney offices across the country?
And why doesn't the letter speak to Category I waivers? Will there be no changes here?
And after listing some suggested changes, changes that could probably result in a new Memo, the Filip Memo, the Deputy Attorney General states that "I have come to the conclusion that the above changes to the Principles are preferable to any legislation, however well intentioned and diligently drafted, that would seek to address the same core set of issues."
But why is it preferable for DOJ to make the changes? Is it because it will be easier for DOJ?
Somehow I have a feeling that this letter will not pacify advocates for the Attorney Client Privilege Protection Act.
Letter From Deputy Attorney General Mark Filip -
What Others Are Saying:
Pedro Ruz Gutuerrez, Legal Times, AG Mukasey Hints at Revision of McNulty Memo, Spars With Senators at Hearing
Dan Slater, WSJ Blog, DOJ: No, No, Don’t Worry About It, Senator. We’ll Fix the McNulty Memo
(esp) (blogging from JFK Airport)
Sunday, June 22, 2008
A letter signed by 33 former United States Attorneys was sent to Senator Leahy, chair of the Judiciary Committee, asking that he support S. 186, the Attorney-Client Privilege Protection Act. The letter states that "[t]his bill is crucial to stemming the Department of Justice’s widespread practices and policies that pressure businesses to waive the attorney-client privilege in return for avoiding a harsher charging decision." It further states:
"The attorney-client privilege, the oldest of the evidentiary privileges, is a cornerstone of our justice system. The Department of Justice must end the practice of demanding that an organization place its employees in legal jeopardy in return for leniency. The time has come to pass legislation that protects the existing rights of individual employees and business organizations. As Chairman of the Senate Judiciary Committee, you are in the position to ensure this legislation is given proper consideration. The Department of Justice has failed to make necessary changes. Therefore, we respectfully ask you to support S. 186, the Attorney Client Privilege Protection Act of 2007, and take appropriate action to bring it to the floor of the Senate."
Addendum - See WSJ Blog here.
Monday, February 4, 2008
Professor Alan Dershowitz, writing at Huffington Post, has an entry titled, "Why Roger Clemens, Even If Innocent, Should Take the 5th."
Although I am a bit more neutral when it comes to baseball- although admittedly a Yankee fan - I concur with Dershowitz's assessment. Speaking - even if innocent - can be harmful to your freedom. But the problem is more complicated. It's a problem faced by anyone who is a celebrity or politician -- Silence is not golden.
If you speak you run the risk of having anything you say used against you - even if innocent. If you don't speak people make assumptions of guilt. And if a politician or celebrity this can tarnish your career.
Why is it that truthful testimony can be used against an individual?
- For one the individual may not remember the exact words used in the prior statement and when subject to a sharp cross-examination, the person may come across as confused - or not telling the truth in a later trial.
- Second, there is always the missing statement that is used against the individual. The person answers the questions asked and fails to include every little detail - after all they might be a bit nervous in testifying. Hitting a ball in front of a good number of fans and non-fans is not quite the same as answering questions from those in Congress. So what if something is omitted? What will the cross-examination look like if it is pointed out that this statement was not included in the legislative testimony?
- Finally, people view evidence from many different angles. The same event may be told differently by several different people. Will this be viewed as a lie if it is ever presented at a later trial?
But there's a more important question here. Is it fair to place celebrities and politicians in this catch -22? Is the testimony really needed for the hearing? How would the politician feel if the tables were turned and they were being asked questions because one person had implicated them? And don't tell me this is an invitation, I read co-blogger Peter Hennings entry here.
Some of us continue to harp on prosecutorial discretion and the many possible abuses that can arise from allowing prosecutors unbridled discretion. But maybe this is a place to discuss legislative discretion, and think about when Congress should take a step back and consider whether the testimony is really needed here and now.
Wednesday, December 26, 2007
The first issue raised by the government in the prosecution of Barry Bonds for perjury and obstruction of justice involves the potential -- or perhaps even actual -- conflict of interest his two new attorneys may have because of their prior work representing witnesses in the Balco (Bay Area Laboratory Co-operative) steroids investigation. The much-heralded lawyers are Alan Ruby and Christine Arguedas, and both were hired right before Bonds' arraignment on December 7. Ruby earlier represented Dr. Arthur Ting, Bonds' personal physician, for about a month, and Dr. Ting was a witness before the grand jury that investigated Bonds for perjury. Arguedas represented, among others, former track star Tim Montgomery and three former members of the Oakland Raiders.
In a filing raising the potential conflicts of interest (available below), prosecutors note that they are unlikely to call Montgomery and the three football players, probably because they had nothing to do with Bonds and could not provide any valuable testimony. I doubt there is even a colorable claim of a conflict of interest involving Arguedas based on her representation of witnesses with no connection to her current client who are not going to tesify. Dr. Ting, however, is another matter as the government motion notes that he is likely to be a witness at trial. Indeed, he could well be a crucial witness in establishing that Bonds use steroids during the periods that he denied their use before the grand jury. Media reports indicate that Dr. Ting accompanied Bonds to Balco, and participated in a private drug test of Bonds in 2000. The filing redacts a portion of a paragraph relating to Dr. Ting, most likely because it refers to his grand jury testimony, which remains secret under Federal Rule of Criminal Procedure 6(e). Any redaction draws attention, of course, and it is intriguing to specualate about what he might say at trial, and whether he will try to defend Bonds.
Ruby only represented Dr. Ting for a short time, so the potential conflict is not clear. One common basis for claiming that defense counsel cannot represent a current defendant because of prior representation of a government witness is that the lawyer will not be able to fully cross-examine the witness due to the confidentiality rules. For example, if the prior client made a statement to the lawyer and then makes a different assertion at trial, the lawyer would not be able to use that earlier statement to undermine the former client's credibility because of the protections afforded to attorney-client communications. The lawyer's obligations to the two clients would come into conflict because of the need to protect one at the expense of the other getting the best possible defense, and so might result in the lawyer providing ineffective assistance to the current client, the defendant. If Ruby has a conflict of interest because of what he might have learned from Dr. Ting during the earlier representation, then his presence on the case could result in the reversal of any conviction due to a Sixth Amendment violation due from claimed ineffective assistance of counsel.
The government's filing notes that prosecutors will accept a waiver from Bonds of the possible conflicts, which triggered his brief appearance before U.S. District Judge Susan Illston on December 21. At this point, there has not been a motion to remove either Ruby or Arguedas, and prosecutors are raising the conflict at this point to avoid being whipsawed if there is an actual conflict of interest. One of the dictionary definitions of "whipsaw" is "to defeat or best in two ways at once." The issue prosecutors are raising is that they do not want to lose a conviction because of a problem that the defense lawyer has with his/her client. If the case goes to trial with conflicted counsel and the jury returns a "not guilty" verdict, then there is no harm from the conflict. If the jury convicts, then a defendant can claim that the result is tainted due to defense counsel's conflict, a difficult argument to win but one that results in overturning the verdict if an actual conflict is found that affected counsel's performance at trial. Hence the whipsaw, because the defendant can win either way with a conflicted lawyer, at least in the government's eyes, because prosecutors did not do anything wrong.
The waiver is one form of protection for the case, although it does not provide an absolute shield against a defendant raising the issue on appeal. By requiring Bonds to appear in court to answer questions, Judge Illston is taking steps to avoid having the case affected by the potential conflict. She has ordered Bonds and his attorneys to make a submission by January 4, 2008, waiving the conflict to establish a record that it is both knowing and voluntary. Because Dr. Ting is likely to be a witness, he too must agree to waive any confidentiality or conflict of interest claim he might have against Ruby. While the current client is often happy to waive the conflict, the former client has an interest that must be protected.
If Dr. Ting were to refuse to waive, then the issue becomes much more complicated and I would expect Judge Illston to seriously consider removing Ruby as a member of Bonds' legal defense team. Of course, that is a decision also fraught with danger, because the recent Supreme Court decision in United States v. Gonzalez-Lopez held that improper denial of a defendant's right to counsel of choice results in an automatic reversal of a conviction. While I expect the court to accept Bonds' waiver, assuming Dr. Ting also waives the protections of the confidentiality rule, this is an issue that can rear its ugly head at any point in time. (ph)
Saturday, December 15, 2007
A new bill (available below) introduced by Senate Judiciary Committee Chairman Patrick Leahy and cosponsored by Senator Arlen Specter, the Committee's ranking member, would add a new Rule 502 to the Federal Rules of Evidence to deal with waiver of the attorney-client privilege and work product protection when a litigant discloses such information to a federal office or agency or in federal litigation. Companies are often reluctant to disclose the results of internal investigations to the government because giving protected information to an adversary means the privilege and work product claims are waived for all other cases, and it may be difficult to determine in advance how broadly the waiver will be construed. The new legislation seeks to give a measure of protection by limiting waiver to those materials actually disclosed unless the party intended the waiver to reach undisclosed information or communications. The new rule also addresses inadvertent disclosures in the same way.
An earlier proposal to add a provision to the FRE to allow for "selective waiver" of protected information appears to have been dropped, so this new legislation is taking a different tack. Rather than an across-the-board rule allowing such a waiver, the proposed rule would put the issue in the hands of a federal judge when the disclosure occurs in litigation. The bill, S. 2450, provides: "A Federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court — in which event the disclosure is also not a waiver in any other Federal or State proceeding." Importantly, the new rule also overrides state provisions that would construe the waiver in one proceeding as applying in others, so that the protection afforded by a federal court order will also apply in state court litigation. This is an important protection for companies disclosing internal investigations because they are subject to shareholder derivative suits in state court, so if adopted new Rule 502 will apply uniformly.
The legislation is new, and there have not been any hearings on it at this point. But the sponsors are the leaders of the Judiciary Committee, so it's likely to get a favorable reception. (ph)
Sunday, December 2, 2007
Wednesday, October 31, 2007
The grant of immunity by State Department investigators to the Blackwater guards involved in a firefight in Iraq on September 16 that killed a number of civilians is raising a furor on Capitol Hill about who authorized the immunity and whether it was cleared through the Department of Justice. ABC News reports (here) the language of the immunity grant to each guard who made a statement: "I understand this statement is being given in furtherance of an official administrative inquiry . . . I further understand that neither my statements nor any information or evidence gained by reason of my statements can be used against me in a criminal proceeding, except that if I knowingly and willfully provide false statements or information, I may be criminally prosecuted for that action under 18 United States Code, Section 1001." This appears to be the common "use/fruits" immunity (see earlier post here) given to a person to obtain testimony over an assertion of the Fifth Amendment privilege. Department of Justice approval is required before any authorized grant of immunity can be made, which appears to be missing here. That does not mean the immunity is invalid, however, and the guards are protected regardless of whether the legal requirements were followed.
Foreign Relations Committee chairman Senator Joseph Biden and House Oversight and Government Reform Committee chairman Representative Henry Waxman sent letters to Secretary of State Rice asking for further information about the immunity grants. Senator Biden's letter (here) asks, "Press reports today indicate that DS agents offered grants of immunity to Blackwater employees after the September 16 shooting incident in Baghdad. Are these reports accurate? If so, who authorized these grants of immunity? Was there consultation with the Department of Justice prior to such grants of immunity?" Representative Waxman's letter (here) states, "This rash grant of immunity was an egregious misjudgment. It raises serious questions about who conferred the immunity, who approved it at the State Department, and what their motives were."
One justification offered for giving this type of immunity is that it does not preclude a subsequent criminal prosecution of the immunized witness, unlike "transactional immunity" that prohibits prosecution for any crime discussed by the witness. Of course, arguing that an even greater protection could have been given is a bit like claiming "I could have caused a lot more damage than I did to the investigation" -- small comfort at best. Nevertheless, government spokespersons have asserted that criminal prosecutions will still be pursued. For example, Dana Perino at the White House stated (here) that "Secretary Rice has made it very clear that she takes the situation very seriously. It is under review. She said that anyone who has engaged in criminal behavior will be prosecuted." A State Department spokesman took the same approach, stating (here) "[t]he kinds of, quote, 'immunity' that I've seen reported in the press would not preclude a successful criminal prosecution." Perhaps there was a Dr. Evil moment in putting quotation marks around "immunity" because the term is quite clear.
Can the government still pursue a criminal prosecution of any of the guards? Leaving aside thorny issues regarding jurisdiction, the grant of use/fruits immunity makes a subsequent criminal prosecution very difficult, at best. Under the Supreme Court's decision in Kastigar v. United States, 406 U.S. 441 (1972), the government has the "heavy burden" in any prosecution of an immunized witness of meeting "the affirmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony." (Italics added) Perhaps the most chilling term a prosecutor ever hears is "Kastigar hearing" because the proof requirements -- especially when immunity is granted early in an investigation -- are so onerous.
What is more striking about the immunity given to the Blackwater guards is the manner of granting the protection appears to violate two of the basic precepts in securing testimony in the face of a Fifth Amendment claim. First, it does not appear that the investigators had any idea what the guards would say, not even a proffer from them, so it was a blind grant of immunity. The common adage is that prosecutors should not buy a "pig in a poke" (see earlier post here on the meaning of that phrase), i.e. check the value of the goods before the transaction is completed. Indeed, it is not clear whether any of the guards ever asserted the Fifth Amendment, so it's possible the immunity grant was unnecessary for some. Second, even if you do have to buy a pig in a poke, you don't buy it from everyone. Immunity grants are usually given parsimoniously, and only to those on the lower level or on the outside ring of the investigation. A blanket grant of immunity to all participants likely means that no one can be prosecuted because separating out the information in a Kastigar hearing would be impossible -- remember Col. Oliver North. Handing out immunity like Halloween candy is not the way to pursue an investigation if a criminal prosecution is viewed as a possibility, although if the expectation was that no charges would be filed then this would be the best means to ensure that result. (ph)
Friday, October 26, 2007
Speaking as the keynote luncheon speaker at the ABA Second Annual Securities Fraud Institute, Former Deputy Attorney General Paul J. McNulty defended his DOJ McNulty Memo. Referencing Senator Specter's recent Wall Street Journal commentary titled, "A Question for Mr. Mukasey," McNulty was not happy having his efforts called a "swing and a miss." It's at least "a standup double" he said. And then McNulty proceeded to be on the offensive, taking on Senator Specter's proposed legislation.
McNulty may believe that companies will waive because it is in their best interest to do so, but there are still many folks out there who believe that it is important to make certain that DOJ attorneys are not making requests for attorney-client waivers and that the best way to accomplish this is via legislation. The ABA Section of Administrative Law and Regulatory Practice has a program today called, "Corporate Deferred Prosecution Agreements: Issues in Hybrid Enforcement," at the Press Club in DC. starting at 3:45 P.M. I am confident (I am one of the speakers) that there will be responses provided to McNulty's comments. The question will be whether the response(s) will send him back to dugout. Stay tuned.
Thursday, October 25, 2007
The grand jury investigations of I. Lewis Libby and Barry Bonds involved subpoenas to reporters for their communications with sources who had been promised confidentiality. The federal courts unfailingly found that the demand for information trumped the media's confidentiality claims, with reporters being threatened with civil contempt and jail for refusing to respond to the subpoenas. The House passed the "Free Flow of Information Act of 2007" (H.R. 2102 here) on October 16, and the Senate Judiciary Committee passed a similar bill on October 4 (S. 2035 here), to create a federal journalists privilege for communications with sources. Senator Patrick Leahy, the Judiciary Committee chairman, has had the House bill placed on the Senate calendar to expedite consideration of the two legislative proposals. According to a Judiciary Committee press release (here), the legislation would:
- Establish a federal qualified reporters’ privilege to protect and encourage the free flow of information between journalists and sources;
- Reconcile a reporter’s need to maintain confidentiality -- in order to ensure that sources will speak openly and freely -- with the public’s right to effective law enforcement and fair trials;
- Balance the public interest in combating crime and protecting national security and the public interest in ensuring a free and vibrant press by providing that a federal court can only force a journalist to reveal confidential source information when the information is truly essential or crucial to a case or investigation;
- Provide exceptions to the privilege for those situations where information sharing is critical.
Among the exceptions to the privilege in a criminal case is when the court finds that "the testimony or document sought is critical to the investigation or prosecution, or to the defense against the prosecution." The statute does not explain what constitutes "critical" testimony or documents. The use of that term rather than a more commonly used evidentiary term in criminal cases like "material" likely means that the courts will favor the privilege absent exceptional circumstances.
If the legislation passes, it will certainly make subpoenas to members of the media less common, if not almost extinct, because the threshold for obtaining the information will be so much greater that prosecutors may well not even want to pick the fight because it is an almost sure loser. Whether that result is good or bad remains to be seen, but the legislation is certainly something for journalists to cheer. (ph)
Saturday, September 29, 2007
A federal grand jury investigating Capitol Hill corruption subpoenaed California Representative John Doolittle and five of his aides for a number of documents created over the past eleven years. The Congressman has been under investigation for over a year, including a search of his Virginia home, related to dealings with former superlobbyist Jack Abramoff, who is serving a six year sentence in federal prison and has been cooperating in the Department of Justice's continuing inquiry into corruption in Congress. Two of Doolittle's aide reportedly testified before the grand jury recently. According to a story in The Hill (here), Representative Doolittle's lawyer asserts that the subpoenas cover "“virtually every record including legislative records," and the Congressman plans to fight them on the ground that the records are protected by the Speech or Debate Clause.
Article I, Section 6 of the Constitution provides that "for any Speech or Debate in either House, [members of Congress] shall not be questioned in any other Place." The two leading Supreme Court cases on the scope of the Speech or Debate Clause are United States v. Brewster, 408 U.S. 501 (1972), and United States v. Helstoski, 442 U.S. 477 (1979). In Brewster, the Court stated, "[A] Member of Congress may be prosecuted under a criminal statute provided that the Government's case does not rely on legislative acts or the motivation for legislative acts. A legislative act has consistently been defined as an act generally done in Congress in relation to the business before it. In sum, the Speech or Debate Clause prohibits inquiry only into those things generally said or done in the House or the Senate in the performance of official duties and into the motivation for those acts." [Italics added] In Helstoski, the Court explained, "Likewise, a promise to introduce a bill is not a legislative act. As to what restrictions the Clause places on the admission of evidence, our concern is not with the ‘specificity’ of the reference. Instead, our concern is whether there is mention of a legislative act. To effectuate the intent of the Clause, the Court has construed it to protect other ‘legislative acts’ such as utterances in committee hearings and reports. But it is clear from the language of the Clause that protection extends only to an act that has already been performed. A promise to deliver a speech, to vote, or to solicit other votes at some future date is not a legislative act." The government will have to walk a fine line in seeking materials that do not come within the definition of "legislative act."
The D.C. Circuit's recent decision related to the search for records in the office of Louisiana Representative William Jefferson will likely be a favorable precedent for Representative Doolittle because the court held that the Executive branch cannot view legislative materials protected by the Speech or Debate Clause. The government is seeking rehearing en banc to clarify the scope of the privilege afforded members of Congress by the Constitution (see earlier post here). The number of investigations of Capitol Hill corruption, and the link to official acts of Congress, likely means this issue will arise with some regularity in the near future. If the D.C. Circuit does not grant review by the full court, look for the Department of Justice to seek Supreme Court review of the issue. (ph)
Monday, September 24, 2007
Both the New York Times here and the ABAJrl.com here are reporting that prosecutors in the KPMG related case are trying to conflict-out two defense counsel. The prosecutors are claiming that the two defense counsel may have provided legal advice to David Amir Makov, who is now cooperating with the government. Interestingly, the ABAJrl.com states that the lawyers for Makov do not see the problem alleged by the government. If the witness has his own lawyer, and that lawyer doesn't see the issue, why is the government claiming one exists?
The term "secret defense agreement" as used in the article may make what occurred here sound somewhat nefarious. In reality, joint defense agreements are quite common today. Multiple defendants will enter into these agreements for the purpose of exchanging information yet maintaining the attorney-client privilege. They also allow the multiple defendants to cut costs by perhaps hiring one accountant, investigator, or other expert. With the costs placed upon defendants facing white collar charges, this is understandable. These agreements, however, can become a problem when one defendant who is a party to the agreement decides to testify for the government.
Thursday, September 20, 2007
Senator Arlen Specter's bill, the Attorney Client Privilege Protection Act of 2007 (S.186 here), was the subject of a Senate Judiciary Committee hearing on September 18. The five witnesses (statements available here) included two who strongly support the bill, former Attorney General Dick Thornburgh and Andrew Weissman, who headed the Enron Task Force before entering private practice. Two academics, Professors Dan Richman of Columbia and Michael Seigel of Florida, oppose the bill, as did Karen Immergut, the U.S. Attorney for the District of Oregon who is the chair of the White Collar Subcommittee for the Attorney General's Advisory Committee. Specter has been pushing legislation to limit demands on corporations to waive the attorney-client privilege since 2006, but it's not clear whether the bill will clear the Senate Judiciary Committee any time soon. Specter is the only sponsor of the legislation, and Judiciary Committee Chairman Patrick Leahy has not yet announced his position on the bill. According to an article in The Deal (available on Law.com here), Specter wants a quick vote on the legislation, without waiting to raise the issue in the hearings on the nomination of Michael Mukasey to be the next Attorney General. Whether Leahy and others will go along with that, or postpone any action on the bill until they can get Mukasey's views remains to be seen. (ph)