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.
Monday, June 11, 2018
Here is the Indictment returned late last week in U.S. v. James Wolfe. Wolfe worked for 30 years for the United States Senate Select Committee on Intelligence ("SSCI") handling top secret and other classified information provided by the Executive Branch to Congress. According to the Indictment, Wolfe leaked the identity of "Male-1" to at least two reporters on two separate occasions and then lied about it to FBI Special Agents. Male-1 is none other than Carter Page and it is clear that the leaks were intended to damage Donald Trump. Reporter #2, referenced in the Indictment, is New York Times reporter Ali Watkins who was romantically involved with Wolfe for almost four years. Records of Watkins' email and phone contacts (but apparently not their contents) were subpoenaed from third party providers. Andrew McCarthy of NRO Online has commentary here, while Alex Pappas of Fox News examines some of Ms. Watkins' embarrassing historical tweets concerning the identity of leakers and the propriety of sleeping with sources. The press and certain members of Congress are concerned, as well they should be, about DOJ's capture of journalistic records. But keep in mind that the press is not the only institution with a watchdog role. The SSCI performs that function as well, and does so officially, with respect to intelligence-related oversight, and it is ironic (in a bad way) that its Chief of Security, if the charges are accurate, betrayed SSCI's trust. At this point Wolfe has only been charged, under 18 U.S.C. Section 1001 (the Martha Stewart statute) with lying to the FBI.
Friday, June 8, 2018
Special Counsel Mueller added two counts to Paul J. Manafort Jr.'s Indictment and charged Konstantin Kilimnik with these same two counts (Counts 6 and 7) - (see Third Superseding Indictment here). The new counts and new charges allege Obstruction of Justice (Count 6) and Conspiracy to Obstruct Justice (Count 7). Both of these alleged offenses come from the same statute - 18 U.S.C. 1512, with the conspiracy using subsection (k) of section 1512.
The charges are intriguing in that the special counsel elected not to charge using the general conspiracy statute, section 371, a statute he did use in count 1 against Manafort. The use of the conspiracy provision within a substantive offense is charged in count 2 (conspiracy to launder money), but here there is no charge of money laundering against Manafort.
So basically you have one conspiracy to defraud charge, two conspiracy charges coming from specific offenses but not charged under the specific offense provision of the general conspiracy statute, and one of the conspiracy charges coming from the same statute as the specific offense that is charged.
So some questions to ponder:
- did the special counsel only want one conspiracy charge under 371 and did not want to combine the specific acts?
- did the special counsel not want to confuse the conspiracy to defraud the government charge with specific offense charges?
- did the special counsel want to leave more room to split the charges if one of the two people now charged decides to cooperate?
There are probably some out there who will argue that this is all to get cooperation. And whether that is true is not the question being asked here. Special Counsel Mueller has a professional and skilled team and learning their thoughts on why things were charged in a certain way will hopefully be a talk he gives years from now to some bar association. In the interim, please continue to work as diligently as you have been.