Wednesday, April 25, 2018
Everyone is reporting that Michael Cohen is taking the Fifth Amendment (see here and here). This is no surprise. For the government to get a search warrant, probable cause is needed. Further when there are parallel proceedings - with both possible civil liability and criminal prosecution, lawyers are quick to request a stay of the civil proceeding pending a resolution of the criminal action. When an individual is a target or subject of an ongoing investigation, not talking is about the best a lawyer can advise to their client. Perhaps the only monumental aspect of this case is that the individual taking the 5th Amendment happened to be the President's lawyer.
Tuesday, April 24, 2018
The redacted version of the Comey Memos have now been released and do not on their face come close to establishing criminal obstruction of justice by Donald Trump. What they do show is a new President with no concept of how to appropriately interact with his condescending, schoolmarmish FBI Director.
There are conceivably four potential endeavors to obstruct justice referenced in the memos.
1. According to Comey's notes, the President asks Comey if he can see his way to "letting this go, to letting Flynn go," because, "Flynn is a good guy and has been through a lot." It was an inappropriate request, but it was not an order. Had it been an order, it would have been even more inappropriate, but still not a crime. The President has the constitutional authority to order an investigation closed.
2. The President also asks Comey to "lift the cloud" hanging over him by publicly confirming that the President is not under investigation. Comey had already volunteered to Trump at least twice that Trump was not under investigation. Comey declined the President's request to publicly "lift the cloud" and lectured him on the appropriate channels through which to make such a request. There was nothing wrong with the President's request and there would have been nothing wrong with Comey acceding to it.
3. After asking Comey to "lift the cloud" for the umpteenth time, Trump tells Comey, "I have been very loyal to you, very loyal, we had that thing you know." Comey believes this was a reference by Trump to their January 27, 2017 conversation in which Comey expressed his preference to remain on the job as FBI Director and Trump asked for and received a pledge of "honest loyalty" from Comey. In other words, Comey believes that Trump wanted Comey to "lift the cloud" hanging over Trump in return for Comey keeping his job. Assuming that Trump actually said this, it was not a crime. Trump has the constitutional authority to order an investigation closed. He has the authority to fire any non-civil service appointee for refusing to carry out such an order. Trump could have told Comey, "lift the cloud or I will fire you." Ergo, he can certainly suggest that Comey owed it to him to "lift the cloud."
4. Trump repeatedly told Comey that the Russian hooker story was false, because Trump did not stay overnight in Russia during the 2013 Miss Universe Pageant. Apparently Trump did stay overnight. Is this a false statement to a law enforcement officer by someone endeavoring to obstruct justice? The Government would have to prove that Trump actually made this statement knowing it was false and knowing that he was under criminal investigation. But Trump had been already been told by Comey, multiple times, that he was not under investigation. Thus, even assuming that Trump made the statement in question and intentionally lied (as opposed to misremembering), a prosecutor would have to show that Trump was endeavoring to obstruct a criminal investigation, despite having been told that there was no investigation.
If Comey's notes are accurate, the President was a boorish novice with no comprehension of long-accepted norms regarding acceptable interaction between the President and his FBI Director. That doesn't make Trump a criminal.
Tuesday, April 10, 2018
Playing the press has become an important component in handling a white collar case. In the past, one might remain silent and let the case be resolved prior to making any statements, especially press-related statements. With the speed of the internet, it often becomes necessary for attorneys to respond to allegations to provide a level playing field. It, therefore, was no surprise to see Michael Cohen's attorney, Stephen M. Ryan, issuing a press release. (see here). He calls the US Attorneys Office "completely inappropriate and unnecessary." He argues that his client "has cooperated completely with all government entities, including providing thousands of non-privileged documents to the Congress and sitting for depositions under oath."
It is interesting to see the use of a search here as opposed to a subpoena. The downside of the government using a search is that it is more expensive, not secret like the grand jury process, requires probable cause, and if the probable cause is later found lacking the entire search can be invalidated. The upsides of a search are surprise, getting the material immediately without having to wait for the grand jury, obtaining items that might be found in plain view, and also receiving possible incriminating statements from individuals while performing the search, this latter one mostly applicable in the corporate or business context. One can argue obstruction of justice either way. On one hand you get the items in question before there is any possibility of them being destroyed. On the other hand if documents were destroyed, prosecutors would have a "short-cut offense" to charge of obstruction of justice.
In my Article, White Collar Shortcuts, forthcoming in the Illinois Law Review, I note how prosecutors are using investigative and charging "short-cuts" more frequently in white collar cases. Whether the use of a search warrant was a "short-cut" here, remains to be seen.
The attorney-client privilege has had its challenges over the years. But to say the "attorney-client privilege is dead" is clearly an exaggeration and inaccurate.
As noted here, there have been many law offices that have been searched throughout the years. (see here). The government has protocols in place to handle these searches. And hopefully a court will take it a step further and appoint an independent taint team to protect any client information. As you can tell, I am not a fan of the FBI or DOJ being the "taint team." But this does not diminish the ability of the government to stop potential criminality whether it exists inside or outside a law firm.
Some basics - "The core protection of the privilege requires (1) a communication, (2) that was made by the client to a lawyer, (3) that was made in confidence, and (4) that was made for the purpose of obtaining professional legal advice (or services relating thereto)." (See Podgor & Israel, White Collar Crime in a Nutshell 5th Ed. p. 461). One of the exceptions to this privilege is the crime-fraud exception, an exception that does not provide a privilege to client communications that are made for the purpose of furthering an ongoing or future crime or fraud. In assessing whether something falls within the crime-fraud exception, "[t]he key is the purpose of the client, not the knowledge of the lawyer, as the exception applies whether or not the lawyer is aware of the client’s purpose. It also applies whether or not that purpose was actually achieved." Id. at 489.
What we don't know with regard to the search of the President's lawyer's office: 1) whether or not the information sought in the search involved activities of the President, activities of the lawyer, or the activities of others. If this involves activities of the lawyer, an issue of attorney-client privilege may not be implicated. We also do not know whether any confidential communications were being sought. Finally, we don't know if the crime-fraud exception was even a basis used for this search.
And as I say again, white collar investigations take time. Let's give the government, whether it be a special prosecutor or a US Attorneys Office, the time to properly conduct their investigation. If they overstep their authority, there will be plenty of time down the road to challenge it.
Monday, April 9, 2018
The NYTimes is reporting that the FBI raided the office of President Trump's personal attorney, Michael Cohen. (see here). Raids on law offices are not new, and there have been many law offices throughout the years that have had FBI teams show up to obtain boxes of materials and computers. In places such as the Southern District of Florida, one might find a law office raided by the FBI when the attorneys represented individuals engaged in drug dealing, and the government believed that the attorneys were involved in the illegality. But perhaps what is new here, is that the attorney represented the President of the United States, albeit in his personal capacity.
Law firm searches are particularly tricky as the attorney is likely to have privileged information that may be compromised when the investigating agents view items in cases they are opposing. The US Attorney's Manual sets forth a procedure for searching law offices (U.S. Attys Manual - 9-13.420) to protect this information. The Manual provides that "[f]or purposes of this policy only, 'subject' includes an attorney who is a 'suspect, subject or target,' or an attorney who is related by blood or marriage to a suspect, or who is believed to be in possession of contraband or the fruits or instrumentalities of a crime." The Manual notes that:
There are occasions when effective law enforcement may require the issuance of a search warrant for the premises of an attorney who is a subject of an investigation, and who also is or may be engaged in the practice of law on behalf of clients. Because of the potential effects of this type of search on legitimate attorney-client relationships and because of the possibility that, during such a search, the government may encounter material protected by a legitimate claim of privilege, it is important that close control be exercised over this type of search. Therefore, the following guidelines should be followed with respect to such searches:"
The guidelines then note that prosecutors should use the "least intrusive approach," obtain "authorization by United States Attorney of Assistant Attorney General," consult with the Criminal Division - including submitting "a draft copy of the proposed search warrant, affidavit in support thereof, and any special instructions to the searching agents regarding search procedures and procedures to be followed to ensure that the prosecution team is not "tainted" by any privileged material inadvertently seized during the search." "If exigent circumstances prevent such prior consultation, the Criminal Division should be notified of the search as promptly as possible." The guidelines also provide that there is "safeguarding procedures" in place "to ensure that privileged materials are not improperly viewed, seized or retained during the course of the search." And in conducting the search, "to protect the attorney-client privilege and to ensure that the investigation is not compromised by exposure to privileged material relating to the investigation or to defense strategy, a "privilege team" should be designated, consisting of agents and lawyers not involved in the underlying investigation." Specific procedures are used for searching and seizing computers. Finally, guidelines also exist concerning the review of the materials obtained.
Bottom line - 1) All of this takes time. 2) The use of a search warrant against a law firm is not new. 3) Can a government taint team really assess privileged material? 4) The government procedures are concerned about protecting their cases, but who is monitoring and protecting the attorney's cases?
Hopefully, a court will soon step in to evaluate any privilege issues.
Sunday, April 8, 2018
Manuela Andreoni, Ernesto Londono & Shasta Darlington, NYTimes, Ex-President ‘Lula’ of Brazil Surrenders to Serve 12-Year Jail Term
Norimitsu Onishi, NYTimes, Jacob Zuma Appears in Court for South Africa Corruption Trial
Katie Bo Williams, The Hill, Mystery surrounds Sessions appointee to FBI investigation
Dan Klepal & Scott Trubey, AJC, Atlanta corruption probe: Bickers makes first court appearance on bribery charges
Wednesday, April 4, 2018
Monday night, in the U.S. District Court for the District of Columbia, Special Counsel Robert Mueller filed his Response [Government's Response in Opposition to Motion to Dismiss] to Paul Manafort's Motion to Dismiss the Superseding Indictment. Manafort's Motion to Dismiss is bottomed on the alleged invalidity of Acting AG Rod Rosenstein's May 7 2017 Order Appointing Robert S. Mueller III as Special Counsel and defining Mueller's jurisdiction. As part of his Response, Mueller referenced and filed Attachment C, a redacted version of Rosenstein's August 2 2017 Letter Re The Scope of Investigation and Definition of Authority.
Before Monday night there was no public knowledge of this August 2 letter, which sets out in detail, among other things, the specific matters already under investigation before Mueller came on board. According to the August 2 letter, the May 7 Order had been "worded categorically in order to permit its public release without confirming specific investigations involving specific individuals." The private August 2 letter, in contrast, "provides a more specific description of your authority." Recall that the May 7 Appointment Order authorized Mueller to "conduct the investigation confirmed by then-FBI Director James B. Comey in testimony before the House Permanent Select Committee on Intelligence on March 20, 2017, including...(i) any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump; and (ii) any matters that arose or may arise directly from the investigation; and (iii) any other matters within the scope of 28 C.F.R § 600.4(a)." The August 2 letter unequivocally states that "[t]he following allegations were within the scope of the Investigation at the time of your appointment and are within the scope of the Order:
• Allegations that Paul Manafort:
º Committed a crime or crimes by colluding with Russian government officials with respect to the Russian government's efforts to interfere with the 2016 election for President of the United States, in violation of United States law;
º Committed a crime or crimes arising out of payments he received from the Ukrainian government before and during the tenure of President Viktor Yanukovych;
In other words, FBI Director Comey was already investigating Manafort for possible criminal collusion with the Russians and for payments Manafort received from Yanukovych, before Mueller came into the picture. By including the Yanukovich payments in his probe of Trump, Comey displayed an aggressiveness sadly absent from the investigation of Ms. Clinton's email server.
What is odd is that Rosenstein's August 2 letter was sent almost three months after Mueller began his inquiry. You would think that such a specific private memo detailing the scope of Mueller's investigative authority would have been issued contemporaneously with the May 7 Order. That it wasn't suggests there were disagreements in defining the outer boundaries of Mueller's charter or that Mueller or Rosenstein began to perceive problems with the wording of the May 7 Order and foresaw the possibility of just the sort of Motion to Dismiss ultimately filed by Manafort.
Rachel Stockman at Law and Crime notes here that the more specific delineation of authority laid out in the August 2 letter came one week after the raid on Manafort's home. Mueller may have wanted written reassurance that the search and seizure were within his authority ab initio, or, as we say in Texas, from the get-go.
Tuesday, April 3, 2018
The Washington Post is reporting that "Mueller told Trump's Lawyers the President isn't" a target of the Special Counsel's Investigation, but that in early March "Mueller described Trump as a subject of his investigation." (see here & here)(emphasis added). Whether President Trump currently is a subject or witness is important, especially for legal counsel in advising whether their client should testify or speak with investigators.
"A target is a person as to whom the prosecutor or the grand jury has substantial evidence linking him or her to the commission of a crime and who, in the judgment of the prosecutor, is a putative defendant." U.S. Attorney's Manual 9-11.151. Being told that one is not a target is definitely something good for President Trump to hear. But "[a] subject of an investigation is a person whose conduct is within the scope of the grand jury's investigation." Id. This is something that may or may not be good for President Trump. It can mean that the government just hasn't made up their mind yet as to whether the individual will remain under investigation or move to being a witness. This last category, a witness, is obviously the preferred place to be, if one has to be anywhere near a grand jury or being asked to speak with government attorneys.
"A grand jury may properly subpoena a subject or a target of the investigation and question the target about his or her involvement in the crime under investigation." U.S. Attorneys Manual 9-11.150. "It is the policy of the Department of Justice to advise a grand jury witness of his or her rights if such witness is a "target" or "subject" of a grand jury investigation." U.S. Attorney's Manual 9-11.151. Because the DOJ Manual is unenforceable at law, there is little that one can do if they are not advised of their rights as a target or subject, except perhaps report the prosecutors for not following their internal policy. In some instances, more common perhaps in white collar cases, a subject or target may "request or demand the opportunity to tell the grand jury their side of the story." Government lawyers are instructed that a "refusal to do so can create the appearance of unfairness." U.S. Attorney's Manual 9-11.152.
But should a target or subject testify or even be questioned by government attorneys? Some white collar individuals feel they can talk their way out of an indictment, when in fact they are talking their way right into one. So targets and subjects can be hesitant to speak with the government without any immunity. Even with immunity, the fear is that they will provide false evidence, perjure themselves, or if not before a grand jury say something materially false to investigators and be criminally liable under the false statement statute (18 U.S.C. 1001).
So if reports are accurate that President Trump is not a target, this does not necessarily mean he can rest easy. If he remains a subject, then it will be more time before we know where things stand. It is common in white collar cases for individuals to remain in a holding pattern for many months and sometimes years as white collar investigations take time.
Alexander van der Zwann is the first individual to be sentenced from Special Counsel Mueller's Investigation (see here). The sentence is 30 days. (see here & here). According to the terms of the plea agreement, he faced a maximum of 5 years imprisonment. (see here). The agreement called for a level 6 under the sentencing guidelines, with a reduction of 2 for acceptance of responsibility, finalizing at a level 4. The details of the false statement that led to the violation of 18 U.S.C. 1001 are here.