Thursday, November 30, 2017

DOJ Issues New Guidelines on FCPA

Rod Rosenstein announced new guidelines for FCPA cases. (here)  In his remarks he stated:

I want to highlight a few of the policy’s enhancements.

First, the FCPA Corporate Enforcement Policy states that when a company satisfies the standards of voluntary self-disclosure, full cooperation, and timely and appropriate remediation, there will be a presumption that the Department will resolve the company’s case through a declination. That presumption may be overcome only if there are aggravating circumstances related to the nature and seriousness of the offense, or if the offender is a criminal recidivist.

It makes sense to treat corporations differently than individuals, because corporate liability is vicarious; it is only derivative of individual liability.

Second, if a company voluntarily discloses wrongdoing and satisfies all other requirements, but aggravating circumstances compel an enforcement action, the Department will recommend a 50% reduction off the low end of the Sentencing Guidelines fine range. Here again, criminal recidivists may not be eligible for such credit. We want to provide an incentive for good conduct. And scrutiny of repeat visitors.

Third, the Policy provides details about how the Department evaluates an appropriate compliance program, which will vary depending on the size and resources of a business.

The Policy therefore specifies some of the hallmarks of an effective compliance and ethics program. Examples include fostering a culture of compliance; dedicating sufficient resources to compliance activities; and ensuring that experienced compliance personnel have appropriate access to management and to the board.

We expect that these adjustments, along with adding the FCPA Corporate Enforcement Policy to the U.S. Attorneys’ Manual, will incentivize responsible corporate behavior and reduce cynicism about enforcement.

(esp)

November 30, 2017 in FCPA | Permalink | Comments (0)

Tuesday, November 28, 2017

Drugs or White Collar Crime? - What Was Russia's Role "in the massive sports fraud?"

Thursday, November 16, 2017

Senator Robert Menendez Jury Hangs: Mistrial Declared

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

(wisenberg)

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

Monday, November 13, 2017

Special Counsels Are Sometimes Necessary

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

28 CFR § 600.1 Grounds for appointing a Special Counsel.

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

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

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

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

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

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

(wisenberg)

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

Thursday, November 9, 2017

Fox News Reports Veselnitskaya-Fusion GPS Connection

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

(wisenberg)

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

Wednesday, November 8, 2017

Fusion GPS: Already Within Mueller's Charter

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

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

(wisenberg)

 

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

Wednesday, November 1, 2017

The Latest Weissmann Puff Piece

In the course of a classic puff piece on Andrew Weissmann, Robert Mueller's number two man, New York Times reporter Matt Flegenheimer writes that the conviction obtained by Weissmann's Enron Task Force in the Arthur Andersen case was overturned by the U.S. Supreme Court "over a narrow issue involving jury instructions." This is profoundly misleading, as anyone even remotely familiar with the case should know.  The issue was not narrow at all. The jury instructions insisted upon by the Enron prosecutors, and approved over defense objections by a pliant judge, allowed Arthur Anderson to be convicted for a crime that did not exist. The instructions achieved this result by effectively eliminating a key intent element in the definition of obstruction of justice. Here is what happened.

In Arthur Andersen, Enron Task Force prosecutors convinced Judge Melinda Harmon to alter her initial jury charge, defining the term "corruptly." Judge Harmon's charge was right out of the form book, based on the approved Fifth Circuit Pattern Criminal Jury Instruction. The Government's definition allowed conviction if the jury found that Andersen knowingly impeded governmental fact-finding in advising Enron's employees to follow Enron's document retention policy. The word "impeded" was nowhere to be found in the Pattern Instruction. The 5th Circuit Pattern's requirement that the defendant must have acted "dishonestly" was deleted by Judge Harmon and the jury was allowed to convict based on impeding alone. Thus, at the government's insistenceknowingly impeding the fact-finding function replaced knowingly and dishonestly subverting or undermining the fact-finding function. This effectively gutted the scienter element in contravention of the standard Pattern definition.

As Chief Justice Rehnquist, speaking for a unanimous Court, wrote: "The jury instructions failed to convey the requisite consciousness of wrongdoing. Indeed, it is striking how little culpability the instructions required. For example, the jury was told that, even if petitioner honestly and sincerely believed its conduct was lawful, the jury could convict."

Moreover, according to Rehnquist, "[t]hese changes [to the jury instructions] were significant. '[D]ishonest[y]' was no longer necessary to a finding of guilt, and it was enough for petitioner to have simply 'impede[d]' the Government’s factfinding ability. 'Impede' has broader connotations than 'subvert' or even 'undermine,' and many of these connotations do not incorporate any 'corrupt[ness]' at all. Under the dictionary definition of 'impede,' anyone who innocently persuades another to withhold information from the Government 'get[s] in the way of the progress of' the Government. With regard to such innocent conduct, the 'corruptly' instructions did no limiting work whatsoever." 

Put simply, the trial and conviction of Arthur Andersen destroyed a major public accounting firm, based on a  non-existent legal theory pushed by the Enron Task Force. There was nothing narrow or technical about it.

UPDATE: See Ms. Powell's comment below. Licensed To Lie, by Ms. Powell, does go into many of the problems with the Enron Task Force. I reviewed the book for our readers when it came out. Here is that review.

(wisenberg)

November 1, 2017 | Permalink | Comments (1)