Monday, December 31, 2018
Each year this blog has honored individuals and organizations for their work in the white collar crime arena by bestowing "The Collar" on those who deserve praise, scorn, acknowledgment, blessing, curse, or whatever else might be appropriate. With the appropriate fanfare, and without further ado, The Collars for 2018:
The Collar for Plumber Unemployment – The Mueller Investigation, which has sprung no leaks.
The Collar for the Most Likely to Inadvertently Pull the Execution Switch on His Client – Rudy Giuliani.
The Collar for the Most Likely to Cause President Trump to have a Heart Attack – Tied between Michael Cohen and Paul Manafort.
The Collar for the Most Likely Agency to be Shut Down – No not the EPA or Department of Education, rather the IRS so that President Trump’s tax returns can’t be revealed.
The Collar for the Most Likely to Get a Second Tattoo on his back – Roger Stone (underneath his Nixon tattoo?).
The Collar for Most Likely to Try Not to Follow in his Father’s Footsteps – Jared Kushner.
The Collar for the Best Insurance Protection if in Prison – To Donald Trump, Jared Kushner, and others for passing a criminal justice reform act that will assist some serving time.
The Collar for Taking a Gamble – To all those pushing ahead with cases with dual sovereignty issues, prior to the Supreme Court’s ruling.
The Collar for the Longest Special Counsel Investigation – Clinton/Whitewater (see https://www.businessinsider.com/how-long-special-prosecutor-mueller-trump-2017-6)
The Collar for the Least Likely to Look Someone in the Eye and Say “You’re Fired” – Donald Trump.
The Collar for Most Likely to Win the Tom Petty “I Won’t Back Down Award” – Jeff Sessions for not firing Mueller.
The Collar for Least Likely to Teach Professional Responsibility at a Law School – Acting US Attorney Matthew Whitaker.
The Collar for the Joe Friday Award for Catching the Most Fish in his Net – Special Counsel Robert Mueller.
The Collar for the Least Likely to Discuss Politics in Bed – Kellyann Conway and George Conway.
The Collar for the Timex Watch “Takes a Licking and Keeps on Ticking” – Jeff Sessions.
The Collar for the Next James Patterson Mystery – The undisclosed company with a subpoena problem.
The Collar for the Least Likely to Play Poker with Mueller – William Barr and Matt Whitaker.
The Collar for Best “Stand Your Ground Defense” – Second Year in a Row, to Rod Rosenstein who continues to stand firmly on Mueller’s appointment.
The Collar for Clotheslines –Second Year in a Row, to Donald Trump for hanging so many of his subordinates out to dry.
The Collar for Directional Impairment – Second Year in a Row, to Donald Trump for demonstrating that loyalty is a one-way street.
The Collar for Best Game of Hide and Seek – To Donald Trump for continuing to refuse to disclose his tax returns (third year in a row).
The Collar for the Best Parent – Retired years ago and renamed the Bill Olis Best Parent Award – not awarded again this year since no one comes even close to Bill Olis, may he rest in peace.
Friday, December 7, 2018
The Belmont Criminal Law Journal at Belmont University College of Law in Nashville, TN, will hold a symposium in early 2019 regarding “White Collar Crime in the 21st Century: When Corporations and Individuals Collide.” This year’s symposium will consider, among other things, the tensions that can develop between the interests of a corporation and the interests of an individual during a white collar criminal investigation and how these conflicts impact the representation of each party.
The symposium will occur at Belmont University College of Law on Friday, February 1, 2019, and include three academic addresses and two practitioner panels. Professor Ellen S. Podgor, the Gary R. Trombley Family White-Collar Crime Research Professor of Law at Stetson University College of Law and editor of this blog, will deliver the keynote academic address at this year’s event. The Belmont Criminal Law Journal is seeking two additional academics to give 30-minute presentations on topics related to this year’s theme. Belmont University College of Law will cover travel and lodging expenses. Further, all academic addresses presented during the symposium will be transcribed for publication in the Belmont Criminal Law Journal, which we anticipate being published in May of 2019. Please note that the Belmont Criminal Law Journal has a policy of allowing all presenters to make edits to the transcript prior to publication to bring the text in-line with what the presenter intended to say.
Our goal is to once again bring together academics, legal practitioners, government officials, and non-profit leaders to explore a cutting-edge issue in the field of criminal law. I hope you will consider joining us in Nashville for this interesting discussion. Those interested in submitting a proposed topic to present at the symposium should submit a draft title and brief one page summary of the proposed topic to Lexie Ward (Editor-in-Chief of the Criminal Law Journal) at email@example.com by Monday, December 17, 2018. Decisions regarding the submitted topics will be made by Friday, December 28, 2018.
Thursday, December 6, 2018
The latest filing by Special Prosecutor Mueller is very telling as to the status of the investigation. Michael Flynn pleaded guilty on Dec. 1, 2017, to making false statements to FBI agents, in violation of 18 U.S.C. 1001. In anticipation of sentencing on December 18th, the government filed its Memorandum in Aid of Sentencing, along with a heavily redacted Addendum. Some thoughts:
1. The fact that Flynn plead to a Section 1001 violation hurts Mueller's future cases if they decide to use him to testify against others in those cases. Pleading to a section 1001 charge is admitting that the individual gave a false, material statement, knowingly and willfully, within the executive, legislative, or judicial branch of the government. The opening cross-examination questions for such a witness might be - 1) You are a convicted felon? 2) And you were convicted for a crime of lying? 3) And you lied to the FBI?
2. But three things are noteworthy here - 1) the charge is false statements and not perjury - if it had been perjury then the cross-examination would go on about lying under oath and be dragged out for many more questions than the three previous ones; 2) prosecutors do not get to choose their witnesses and if they can provide an explanation for the lie (e.g. pressure or duress) it stings less; and 3) if you can back up the individual's testimony with other evidence then the false statement charge is less problematic. It seems likely here that there are documents, emails, or other evidence to support whatever Flynn may be saying.
3. Using a "shortcut offense" like section 1001 is typically not good since it takes away from the actual wrongdoing and society never sees the underlying conduct. Deterrence is best achieved when the actual criminality is disclosed and punished. (see White Collar Shortcuts here). But that is not the case here. Here Flynn is likely a source providing information for other investigations that can have charges beyond shortcut offenses. For one, Mueller did not use a shortcut in his charging of cybercrimes against Russians (see here). So using false statements here is again justified.
4. 19 interviews - WOW. That is significant. One doesn't meet 19 times and get nothing.
5. This is an ongoing investigation. Investigations in white collar cases take time. This investigation is certainly not finished -- one need only look at the number of redactions in the Addendum to reach this conclusion.
6. That the substantial assistance provided extends beyond the special counsel. Part A says "XXX Criminal Investigation" and Part B says "The Special Counsel's Office's Investigation" and then appears to have three separate subsections - with one subsection completely redacted. So one could conclude that the special counsel has 3 investigations that Flynn has been useful for, and that someone else perhaps is using him.
7. Mueller has yet again maintained secrecy, and there have been no leaks. This is impressive. It is also impressive that Mueller is speaking only through court papers and not providing any additional information.
8. It may be frustrating to many that more information has not been released, but in time it is likely we will know more. We need to be patient and trust someone who is clearly upholding the highest of ethical values.
Thursday, November 29, 2018
News media are reporting that Deutsche Bank has been raided by German prosecutors. (see BBC here), (see NYTimes here). A money laundering investigation is what is being reported. Deutsche Bank stated that "[i] is true that the police are currently conducting an investigation at a number of our offices in Germany. The investigation has to do with the Panama Papers case. More details will be communicated as soon as these become known. We are cooperating fully with the authorities." (Tweet @ Deutsche Bank). They also have stated that "[a]s far as we are concerned, we have already provided the authorities with all the relevant information regarding Panama Papers." So if Deutsche Bank provided everything, why is there a raid?
"Cohen's representations about the Moscow Project he made to SSCI (US Senate Select Committee on Intelligence) and HPSCI (House of Representatives Permanent Select Committee on Intelligence) were false and misleading. Cohen made the false statements to (1) minimize links between the Moscow Project and Individual 1 and (2) give the false impression that the Moscow Project ended before 'the IOWA caucus and ... the very first primary,' in hopes of limiting the ongoing Russia investigations."
Other interesting points - "Cohen discussed the status and progress of the Moscow Project with Individual 1 on more than the three occasions Cohen claimed to the committee, and he briefed family members of Individual 1 within the Company about the project."
And note page 6 - "Cohen responded, 'My trip before Cleveland. [Individual 1] once he becomes the nominee after the convention.""
So were there ties to Russia - clearly yes.
Thank you Special Counsel Mueller for continuing this important investigation. And for those who claim this is going on for too long - just remember that white collar cases typically take a long time.
Thursday, October 25, 2018
I hope you will join me and the ABA Criminal Justice Section for a spectacular White Collar Crime Town Hall on Thursday, November 1 from 3:30pm-5:00pm at the Mayflower Hotel in Washington, D.C. Due to the generosity of our sponsors, the program is free and will be followed by our Criminal Justice Section welcome reception at the hotel. You may register for the CLE on-site.
Below is a description of the White Collar Town Hall and the exemplary panelists who will discuss The Role of the Media in White Collar Criminal Investigations and the Mueller Probe.
The panelists will first examine the role of the media in these investigations generally, including the obligations/interests of the media in protecting the integrity of investigations, the tools available to prosecutors and defense attorneys to address media coverage during the investigative stage, and the tools and standards for fair trial protections due to pretrial media exposure. Then, the panel will delve into the Mueller probe specifically, addressing the media’s sources of information about the Mueller investigation, what the leaked information reveals about the investigation, the media’s impact on the Manafort trial, the Congressional role in providing investigative information to the public, and implications on other ongoing aspects of the investigation.
Moderator: Henry Asbill, BuckleySandler LLP, Washington, DC
Rebecca Ballhaus, Reporter, Wall Street Journal, DC Bureau, Washington, DC
Kevin Hall, Pulitzer Prize Winner, Chief Economics Correspondent and Sr. Investigative Reporter, McClatchy Newspapers
Michael Isikoff, Chief Investigative Correspondent, Yahoo News
Prof. Jessica Roth, Cardozo Law School, Reporter, ABA CJS Standards on Fair Trial and Public Discourse
In addition to our white collar program on Thursday evening, there will also be complimentary CLE programs at the Mayflower Hotel all day Friday. Our Friday program will begin with a keynote address on plea bargaining by Judge Jed Rakoff. This will be followed by a host of fascinating panel discussions focusing on the work of the Section and its committees. These will include:
A Fresh Look at Plea Bargaining in our Criminal Justice System
Prosecutors as Agents of Change
GITMO Twelve Years Later
Re-Entry and Innovation
What Civilians Can Learn from the Military Experience with Sexual Assault & Harassment
Enhancing Justice: Reducing Bias – Strategies for Change in the Criminal Justice System
On Friday, we will also hold our prestigious Criminal Justice Section Awards Luncheon and Address, which occurs at 12:30pm. The Address will be given by Hilarie Bass, immediate past President of the American Bar Association. Ms. Bass will discuss her work creating a new organization to address issues critical to women and minorities. These important remarks are incredibly timely given the recent launch by the Criminal Justice Section of the new Women in Criminal Justice Task Force.
Our Friday programming will be followed by our Criminal Justice Section fall reception.
The complete agenda is available on the Fall Institute website.
All CLE programming, including the White Collar Town Hall, is complimentary and participants may register on-site. Those wishing to attend the Awards Luncheon and Address should register online. The cost of the luncheon is $50. For those registering online, please note that website issues have resulted in improper pricing information being listed. The correct price should populate when you move to the checkout. If you have any difficulty registering online, please contact Regina.Ashmon@americanbar.org
Wednesday, September 26, 2018
Earlier today, the Department of Justice announced the issuance of an updated United States Attorneys' Manual. The new manual, now called the Justice Manual, represents the "first comprehensive review and overhaul of the Manual in more than 20 years." From the DOJ press release:
“This was truly a Department-wide effort, involving hundreds of employees collaborating from many different Department components,” said Deputy Attorney General Rod Rosenstein. “To mark this significant undertaking, and to emphasize that the Manual applies beyond the United States Attorneys’ Offices, we have renamed it the Justice Manual. Though the name has changed, the Manual will continue as a valuable means of improving efficiency, promoting consistency, and ensuring that applicable Department policies remain readily available to all employees as they carry out the Department’s vital mission.”
By 2017, many provisions of the Manual no longer reflected current law and Department practice. This diminished the Manual’s effectiveness as an internal Department resource, and reduced its value as a source of transparency and accountability for the public. To bring the Manual up to date, employees from around the country, primarily career attorneys, undertook a yearlong, top-to-bottom review. The Department’s goals were to identify redundancies, clarify ambiguities, eliminate surplus language, and update the Manual to reflect current law and practice.
Some specific changes include expanding the Principles of Federal Prosecution to incorporate current charging and sentencing policies, and adding new policies on religious liberty litigation, third-party settlement payments, and disclosure of foreign influence operations.
The Justice Manual may be accessed here.
Saturday, September 15, 2018
As noted here, the Special Counsel's Office filed an information, which immediately indicated that either the accused waived a Grand Jury Indictment or an Agreement had been reached (which typically includes the waiving of the indictment). In this case it was the latter, as seen in the entering of a plea agreement (see here) by Paul Manafort. The plea is to two counts of a sec. 371 conspiracy, with the first count having multiple objects of the conspiracy (money laundering, tax fraud, false statements, etc.) and the second count being limited to a conspiracy to obstruct justice under sec. 1512. Accompanying the plea we find the Statement of the Offense (here) and Exhibits (here). So here are some thoughts on the plea:
- The government and defense used specific objects of the conspiracy as opposed to just saying it is a conspiracy to the defraud the government, although on afterthought it does appear to be a conspiracy to defraud. It provides a roadmap to a vast array of alleged underlying criminal conduct.
- The Agreement makes clear that no additional charges will be brought against Manafort for his "disclosed participation in criminal activity including money laundering, false statements, personal and corporate tax and FBAR offenses, bank fraud, Foreign Agents Registration Act violations for his work in the Ukraine, and obstruction of justice."
- The Advisory Guidelines range is 210-262 months imprisonment, but each side left some room for argument here. And sentencing in this DC case, as well as the prior Virginia case will be delayed pending Manafort's cooperation. But of key importance is that the government will file a 5K1.1 if Manafort provides substantial assistance, which could bring down his sentence.
- Cooperation is a component of the agreement, including providing testimony in court proceedings. But the essence of that cooperation is obviously omitted here.
- The Plea contains the typical trial, appellate, and post-appellate waivers often found in plea agreements. But, noteworthy, is that Manafort is waiving his right to counsel during his cooperation with the government. This will save him attorney fees, but it also will mean that anything he says will be between him and the government.
- The forfeiture of both money and property is significant, and this plays well against any claims that this special counsel investigation was overly costly. Special Counsel Mueller is doing a good job here at trying to get money to cover the costs of this investigation.
And some thoughts on the Statement of the Offenses and Other Acts -
- It looks like the theme is how to disseminate misinformation. One has to wonder if this is a preview to the 2016 U.S. presidential campaign.
- Several individuals and companies are named only by letter in the Statement (A, B, D1, and D2) - did they previously provide information to the Special Counsel or have we now moved closer to these dominos. And if there are future cases here, will the Special Counsel's office handle these or refer them to other US Attorneys. I hope someone is watching the statute of limitations here.
- #35 is intriguing - Manafort initially told the DOJ "that he [did] not [have] relevant documents." But the statement here is that Manafort did in fact have "numerous incriminating documents in his possession, ..." The implication is clear that the government now has these documents. So, what other documents did Manafort have?
General Thoughts -
- Mueller's team plays a tough game as so many have folded to protect their family, or for the sake of their family.
- The Plea, the Statement and the Accompanying Exhibits make one wonder how pervasive phony media campaigns, such as this, have occurred.
- What is really important is not what is here in these documents, but rather what is not here. Mueller has been careful not to show his hand as he climbs the ladder of indictments and pleas that have individuals charged and convicted of federal crimes. And he certainly has done an impressive job in accumulating these. And from each plea he obtains additional evidence that implicates the next person.
- So who will be the next domino?
See also, Jack Townsend, Federal Tax Crimes - here.
Friday, September 14, 2018
Wednesday, August 22, 2018
Yesterday was a crucial day for Special Counsel Mueller's Investigation in that Paul Manafort was convicted on eight counts. The fact that the remaining counts were "hung" is inconsequential as the sting of these eight convictions sends a strong message and a possible heavy sentence. To make matters worse for Manafort, he still has an upcoming trial in DC on other charges. One could argue that there is always the possibility of success on appeal or a presidential pardon. But one has to wonder whether Manafort's time in negotiating a plea with the Special Counsel may be running out. And is there now competition in who will get the best cooperation agreement or favorable statement at sentencing from the government.
Further north, it was an important day in that within the same hour as Manafort's conviction, Attorney Michael Cohen entered a guilty plea to eight counts. Many in the media are noting that in the plea hearing Cohen said that his actions were "at the direction of a candidate for federal office." Was Michael Cohen sending a message to Mueller's team that he is ready to talk?
These two cases are not currently connected --two different prosecutors, two different offices, two different courts, two different matters.
But how many cooperators does Mueller need, and will Manafort (if he decides to cooperate) be up against Cohen's desire to offer evidence, assuming that he might have an interest in cooperation.
It may be a stretch to say that the clock is ticking for potential cooperators. It may also be that Mueller is someone who says "the more the better." Bottom line we just don't know. But yesterday's count of 8 will go down as a memorable day, not because of the matching 8s, but because of what is happening to individuals who had been associated with the President.
Tuesday, August 14, 2018
The NACDL recently released an important report detailing the impact of the trial penalty, which is the difference between the sentence a defendant receives in return for pleading guilty and the often much larger sentence he or she receives in return for exercising his or her constitutional right to trial.
From the NACDL press release:
The ‘trial penalty’ refers to the substantial difference between the sentence offered in a plea offer prior to trial versus the sentence a defendant receives after trial. This penalty is now so severe and pervasive that it has virtually eliminated the constitutional right to a trial. To avoid the penalty, accused persons must surrender many other fundamental rights which are essential to a fair justice system
This report is the product of more than two years of careful research and deliberation. In it, NACDL examines sentencing and other data underlying the fact that, after a 50 year decline, fewer than 3% of federal criminal cases result in a trial. With more than 97% of criminal cases being resolved by plea in a constitutional system predicated upon the Sixth Amendment right to a trial, the fact of imbalance and injustice in the system is self-evident. The report identifies and exposes the underlying causes of the decline of the federal criminal trial and puts forth meaningful, achievable principles and recommendations to address this crisis. With its release, NACDL intends to launch a sustained effort to rein in the abuse of the trial penalty throughout federal and state criminal justice systems. The Trial Penalty report, and the principles and recommendations it puts forward, seeks to save the right to a trial from extinction.
The entire report is well worth reading. For those in the white collar field, I'll note that the report contains a specific section on economic crimes. This portion of the report focuses on Section 2B1.1 of the Federal Sentencing Guidelines. The report discusses the role of 2B1.1 and loss calculations in creating incentives for defendants to plead guilty. You can access the entire NACDL report here.
I found the NACDL report particularly interesting as I've engaged in much research on the issue of plea bargaining and sentencing differentials, including the impact of such incentives on innocent defendants. In one study, we found that 56% of innocent participants were willing to falsely confess guilt and "plead guilty" in return for a bargain. You can read more about those findings and the issue of plea bargaining's innocence issue here.
Saturday, July 28, 2018
Can we talk about the law here? Title 52 U.S.C. §30121, subsection (a), makes it unlawful, among other things, for "(1) a foreign national, directly or indirectly, to make...(A) a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State, or local election." Section 30121 also makes it unlawful for a person to solicit, accept, or receive a contribution or donation described in subparagraph (A)...of paragraph (1) from a foreign national." If something is unlawful, it is against the law.
Clearly, if Donald John Trump, Donald Trump Jr. or anyone else associated with the Trump campaign knowingly solicited, accepted, or received money or a thing of value from a Russian national, that person has violated this provision of the Federal Election Campaign Act, as amended. And the same is true for Hillary Rodham Clinton and persons associated with her campaign.
But not every violation of law is a crime. To be guilty of criminally violating Section 30121 a person must do so knowingly and willfully. See 52 U.S.C. § 30109. In the context of the Federal Election Campaign Act, this means that an individual, to be guilty, must know that he is acting in violation of the law. In other words, here, as in certain other federal criminal statutes, ignorance of the law is an excuse.
In legally examining what we know about the infamous Trump Tower meeting of 2016, we should keep these realities in mind. I am speaking here of the meeting, and what led up to it, alone, and not what may or may not have later transpired. Based on what we currently know it seems extremely unlikely that any reasonable prosecutor could make a criminal case under the Federal Election Campaign Act against Donald Trump Jr. And that includes a case alleging any a conspiracy or attempt to willfully violate the statute. There just isn't enough.
Wednesday, July 25, 2018
For all of you Manafort junkies out there, here is Judge T.S. Ellis, III's July 24 2018 Order, resolving most of the outstanding prosecution and defense motions in limine in U.S. v. Manafort, due to be tried next week in Alexandria.
It is abundantly clear, based on these rulings and the charges in the EDVA Superseding Indictment, that this case will be presented to the jury by the government, as much as possible, as a relatively straightforward bank fraud, concocted by the defendant in order to hide the amount and source of improperly derived offshore income. Manafort and Rick Gates (now a cooperating witness) allegedly created phony loans from offshore nominee entities in order to conceal lobbying income derived from their work as unregistered agents on behalf of, among others, the Government of Ukraine and former Ukrainian President Victor Yanukovych. Later, when Yanukovych lost power and the money source dried up, Manafort and Gates allegedly inflated the value of Manafort's real estate holdings (and/or lied about the nature and use of said real estate) in order to obtain new loans and maintain a lavish lifestyle. The jury will hear and see evidence regarding Manafort's lavish lifestyle, his failure to register as a foreign agent, and his failure to disclose foreign bank accounts that he controlled. But the jury will not see or hear anything pertaining to the Trump campaign's purported collusion or interaction with Russia.
It is becoming fairly obvious to me that Mueller has no criminal collusion case to bring against the President or anyone in the President's entourage absent: 1) bombshell disclosures from Michael Cohen; 2) Manafort flipping after conviction; or 3) Manafort testifying through a post-conviction compelled immunity order issued by a federal court pursuant to 18 U.S.C. §§ 6002 and 6003. The Manafort case was never about Manafort. It was always about Trump. The law unquestionably allows Mueller to operate in this manner. It is what it is.
Tuesday, July 24, 2018
Today in Palmieri v. United States, the United States Court of Appeals for the D.C. Circuit upheld the dismissal of Matthew Palmieri's lawsuit challenging the revocation of his security clearance. It was a unanimous decision in a routine case. The lawsuit was ludicrous, claiming violations of practically every constitutional provision except the Third Amendment. Moreover, it is extremely difficult to challenge security clearance revocations under the Supreme Court's decisions in Department of the Navy v. Egan and Webster v. Doe. Nevertheless, the concurrence of Judge Gregory Katsas, a Trump appointee, is intriguing and timely, given President Trump's threats to revoke the security clearances of certain former intelligence chiefs. Judge Katsas seems to think it is an open question "whether Egan bars non-frivolous constitutional challenges to the denial or revocation of a security clearance." He did not believe that Palmieri's case was the proper vehicle to resolve the question, however, since there were abundant alternative grounds for upholding the district court's opinion. So, the resolution of this question will have to wait until another day, which could be quite soon if the President acts on his threats. Hat Tip to Paul Rosenzweig at Lawfare for noting the concurrence. See also Bradley Moss's outstanding Monday piece in the same publication, discussing the issue at length.
Monday, July 23, 2018
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.
Sunday, July 22, 2018
Not surprisingly, Politico's Josh Gerstein has authored a hit piece on Supreme Court nominee Brett Kavanaugh, with the catchy title "'Brett Was Involved': Inside Supreme Court nominee's work for Bill Clinton." In fact, the article tells very little about the breadth of Kavanaugh's work for the OIC, instead focusing on unsupported suggestions from partisan journalists (and Clinton sycophants) Jonathan Alter and Steve Brill that Kavanaugh (while working for Starr) may have violated Federal Rule of Criminal Procedure 6(e), which prohibits unauthorized disclosure of grand jury materials. That Gerstein would write such a piece of hack work is not surprising, given his history of shaping stories and quotes to fit a pre-conceived ideological spin.
A case in point is this May 2017 Gerstein hatchet job on Rod Rosenstein's three page memo--the memo used by the Trump Administration to justify the Jim Comey firing. (The May 2017 Gerstein piece was written before Rosenstein became the darling of the Morning Joe crowd by appointing Robert Mueller as Special Counsel.) Literally every person quoted in the May 2017 Gerstein article criticized Rosenstein's memo. No one defended it. Yet Gerstein had called me while he was working on the story and we spoke at length. I vigorously defended the reasoning and propriety of Rosenstein's memo, as well as Comey's firing. But you won't find any of those quotes in Gerstein's story. I'm confident that I was not the only source who defended Rosenstein's memo, the reasoning of which was vindicated by DOJ Inspector General Michael Horowitz's subsequent Report. As I pointed out here, four days after Gerstein's piece on Rosenstein, "legions of current and former DOJ prosecutors and FBI Special Agents" were appalled at Comey's public statements during the 2016 election. But Gerstein couldn't seem to locate or quote any of them.
With respect to the Alter-Brill suggestion/insinuation that Kavanaugh leaked grand jury information (and the typical call for a "thorough investigation"), it is pure, unadulterated hogwash. First, although Starr's OIC (where I served as Deputy Independent Counsel) was regularly accused of leaking grand jury information, a Special Master's investigation ordered by U.S. District Judge Norma Holloway Johnson, no fan of our office, cleared the OIC (and by implication all of our employees) of those charges. More importantly, to my knowledge, Kavanaugh himself was never in any way pegged as one of the supposed grand jury leakers. Kavanaugh did occasionally meet with members of the media, as he has always acknowledged, but there is nothing wrong with that per se. Special Prosecutor Archibald Cox regularly gave briefings on background to members of the press and both Cox and Special Prosecutor Leon Jaworski employed a press officer, Jim Doyle, who did the same. It was part of his job. Nobody has ever credibly suggested that Cox, Jaworski, or Doyle acted improperly in giving background briefings on non-privileged matters to the press. In addition, Kavanaugh, when running the Vince Foster investigation, apparently met with certain media figures who claimed to have evidence and information to impart about Foster's death. Kavanaugh would have been remiss in his duties, and accused of a cover-up, had he refused to meet with such sources.
So what is the evidence offered by Brill and Alter that Kavanaugh leaked grand jury information? According to Brill, “If what he did was not improper, why didn’t he do it on the record? The point is they all knew it violated rule 6(e). Brett was involved.” Really and truly, this is what Brill told Politico--this is his proof. Did Brill talk to Politico from a padded room? Keep in mind that Rule 6(e) violations are a crime. Where is your evidence, Mr. Brill? Put up or shut up.
What is Mr. Alter's proof? “Twenty years ago, I had indications that Kavanaugh was in contact with reporters and because it involves potential violation of federal law, those contacts need to be thoroughly explored in the confirmation process." Is an "indication" anything like a penumbra? Alter had "indications" 20 years ago that Kavanaugh had contact with reporters. Why does contact with reporters involve a potential violation of federal law? After all, it is a potential violation of federal law every time I file a tax return or fill out a government form. What is your proof, Mr. Alter? What precise "indication" did you have that anything Kavanaugh may have said or done constituted a violation of federal law or was improper in any way? Put up or shut up.
There are other problems with Gerstein's hit piece. For example, he writes that "Starr infamously took an expansive view of permissible contact with the media, allowing discussions about issues related to the ongoing investigation — disclosures that other prosecutors view as improper or ill-advised." How about some details Mr. Gerstein? What exactly are you talking about? Starr's position that prosecutors were allowed to publicly comment on the investigation in order to rebut false accusations by investigatory targets was part of the U.S. Attorney's manual at the time and had been endorsed in the past by then Deputy Attorney General Eric Holder. Starr's view of what constitutes 6(e) material was later confirmed by the U.S. Court of Appeals for the D.C. Circuit in a 1999 opinion (In Re Sealed Case).
Of course, it is perfectly proper to question Judge Kavanaugh on this topic, and his detailed response to the Senate Judiciary Committee's questionnaire already touches upon his contacts over the years with members of the press. The Senate is free to have at it. But these particular accusations are a joke, and Gerstein's attempt to turn them into a news story is absurd. Politico should be embarrassed.
Friday, July 13, 2018
Special Counsel Robert Mueller's Office has clearly been working to get to the bottom of the alleged Russian interference with U.S. elections. Today a D.C. federal grand jury handed down an Indictment against "12 Russian nationals for their alleged roles in computer hacking conspiracies aimed at interfering in the 2016 U.S. elections." The special counsel's website notes that "the indictment charges 11 of the defendants with conspiracy to commit computer crimes, eight counts of aggravated identity theft, and conspiracy to launder money. Two defendants are charged with a separate conspiracy to commit computer crimes." The Indictment is here.
There are some interesting lines in the Indictment including: "The Conspirators, posing as Guccifer 2.0, also shared stolen documents with certain individuals." It states,
"On or about August 15, 2016, the Conspirators, posing as Guccifer 2.0, received a request for stolen documents from a candidate for the U.S. Congress. The Conspirators responded using the Guccifer 2.0 persona and sent the candidate stolen documents related to the candidate's opponent."
The indictment speaks about how "[t]he conspirators, posing as Guccifer 2.0, also communicated with U.S. persons about the release of stolen documents." It notes how the conspirators "wrote to a person who was in regular contact with senior members of the presidential campaign of Donald J. Trump ..."
The Indictment states that "[i]n order to expand their interference in the 2016 U.S. presidential election, the Conspirators transferred many of the documents they stole from the DNC and the chairman of the Clinton Campaign to Organization 1."
One thing is clear in reading this indictment - Mueller is running a legitimate and important investigation and it needs to continue.
Tuesday, June 26, 2018
All is quiet on the white collar crime front for the 2018 Supreme Court Term. But there are likely a good many more grants to come. And of course one never knows when a civil case will have implications in the criminal sphere. Global Tech (2011), a patent infringement case, ended up being at the forefront of many white collar cases as it examined the concept of willful blindness. Lorenzo v. Securities and Exchange Commission may have some implications in the white collar world as the Court examines "whether a misstatement claim that does not meet the elements set for in Janus Capital Group, Inc. v. First Derivative Traders can be repackaged and pursued as a fraudulent-scheme claim.." (see Scotus Blog here).
But there is one other case that white collar attorneys may want to follow - Timbs v. Indiana, which looks at "[w]hether the Eighth Amendment's excessive fines clause is incorporated against the states under the Fourteenth Amendment. (see Scotus Blog here). Although this deals with a state issue and addresses the issue from a drug-related perspective, it does examine whether the excessive fines clause gets incorporated to the states via the 14th Amendment. The incorporation/selective-incorporation debate has deep roots in Supreme Court jurisprudence with some of the finest jurists debating the extent that Bill of Rights provisions get incorporated to the States. There are few provisions remaining in the Bill of Rights that have not been incorporated and one is the excessive fines clause. Maybe this Court will take the few remaining unincorporated provisions (e.g., grand jury presentment) and say lets move ahead and start giving everyone the basic rights provided in the federal system; or perhaps they will just grant this one and wait another few decades to consider the remaining unincorporated provisions. In the area of excessive fines, the heaviest burden of not incorporating this provision likely lies outside the white collar context, but that may be all the more reason to consider this case.
Monday, June 18, 2018
If Congressman Trey Gowdy is to be believed, and I see no reason not to believe him, this should be an interesting week in Washington. According to Gowdy, Speaker Paul Ryan read the riot act to the DOJ and FBI on Friday night about the Bureau's stonewalling and foot dragging in the face of longstanding subpoenas issued by the House Judiciary and Intelligence Committees. If the subpoenas are not complied with, Gowdy warned that the full constitutional powers of the House will be employed by week's end. It is clear that Gowdy was not just talking about holding people in contempt. Gowdy's comments are significant, because he has been one of the few House Republicans to consistently support the work of Bob Mueller and to give the benefit of the doubt to the Bureau regarding the origins of the Russian investigation. This has often put him on the outs with the many Trump shills on the GOP side. What apparently pushed Gowdy over the edge was the Horowitz Report's revelation of Peter Strzok's text response to Lisa Page that "we'll stop" Trump from being elected President. Astonishingly, it appears that this text had not been provided to the House prior to the release of the Horowitz Report. I suspect as well that Gowdy was enraged to read in the Report that the Bureau, with the active involvement of Deputy Director McCabe, sat on its knowledge of the Weiner laptop materials, even keeping it from the DOJ prosecutors who had been involved in the Clinton email server investigation (dubbed "Midyear Exam"), until alarmed officials in the SDNY U.S. Attorney's Office tipped off an attorney at Main Justice. It is clear that at the time Strzok was leading and ramping up the Russia investigation, he and a large group of DC FBI officials were suppressing the discovery of 347,000 potentially relevant emails on Weiner's laptop. This is why even the rather tame Horowitz Report "did not have confidence that Strzok's decision to prioritize the Russia investigation over following up on the Midyear-related investigative lead discovered on the Weiner laptop was free from bias." But make no mistake about it, Strzok did not act alone. As many as 39 FBI officials were likely to have participated in a September 28, 2016 secure video teleconference (SVTC) in which the discovery of 141,000 emails potentially relevant to Midyear Exam was discussed. (McCabe was informed of the 347,000 figure later that evening.) This was an FBI conspiracy of silence. The irony is that the FBI's attempt to suppress the Weiner emails almost certainly aided Trump's electoral victory. If the emails had been processed in a timely fashion, without publicity, their ultimate irrelevance would have been established prior to the election and Comey would not have needed to make the damaging announcement that he was reopening the Midyear investigation. It will be doubly ironic if there were wholly legitimate reasons to open the Russia investigation, but the FBI's misguided efforts to hide its own mistakes ends up tainting and derailing the entire project. Byron York reports here on the growing House GOP suspicion that the FBI is hiding even bigger bombshells.
Thursday, June 14, 2018
Analysis to follow in a while.
Here also is the Press Release and Executive Summary of OIG Report.