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)

Tuesday, October 31, 2017

Crime Fraud Opinion in Manafort Case

Attached is In Re Grand Jury Investigation-Misc. Action 17-2336, the U.S. District Court Opinion holding that the crime fraud exception to the attorney-client privilege allowed Special Counsel Mueller the right to question Paul Manafort's lawyers about his allegedly misleading responses to questions from the U.S. Department of Justice.

(wisenberg)

 

 

 

 

 

October 31, 2017 | Permalink | Comments (0)

Monday, October 30, 2017

George Papadopoulos Criminal Information and Plea Papers

As most people have figured out by now, the most interesting development related to the charges unsealed today by Bob Mueller & company is the guilty plea entered into by an apparently marginal Trump Campaign operative named George Papadopoulos. Papadopoulos established direct and indirect contact with some Russians early in the campaign and lied about it later to the FBI. Not a good career choice. Now he has entered into a cooperation agreement and pled guilty under 18 U.S.C. Section 1001 (the Martha Stewart statute) to making false statements to government officials. Even without a downward variance his Guidelines Range is 0-6 months, so he won't be doing any time.  According to the U.S. v. George Papadopoulos Statement of the Offense, which is the key document in the case, on April 26, 2016, while Papadopoulos was working on the campaign, one of Papadopoulos's foreign contacts advised him that the Russians had access to "dirt" on Mrs.  Clinton and "thousands of emails."  Interestingly, the Statement of the Offense does not explicitly say that the emails were offered to the Trump Campaign by the Russians or that Papadopoulos shared the information about the emails with Trump Campaign officials. Here also are the  U.S. v. George Papadopoulos Criminal Information, and the U.S. v. George Papadopoulos Plea Agreement.

(wisenberg)

October 30, 2017 in Corruption, Current Affairs, Fraud, Investigations, Martha Stewart, Obstruction, Prosecutions | Permalink | Comments (0)

Manafort-Gates Indictment

Manafort and Business Associate Reportedly Charged with Tax Fraud

Here is the New York Times Story. Once we get the Indictment it will be posted. The charges against Manafort and his associate Rick Gates, although they do not relate in any way on their face to Donald Trump or the Trump Campaign, are substantive and serious in nature. We are looking at a Klein Conspiracy, False Statements, Failure to Register as a Foreign Lobbyist, Tax Fraud through failure to report control over foreign accounts, and Money Laundering. More to come.

(Wisenberg)

 

 

 

 

 

October 30, 2017 | Permalink | Comments (0)

On the Brink of Charges? UPDATE

The first thing to ask, if CNN's Friday night report is accurate, is who leaked? Because if the leak came from the government or court staff it is almost certainly an illegal violation of a sealed court order and/or grand jury proceedings. And if it came from the defense attorney of the party to be charged, who told him or her? The whole point of sealing something is so that the public doesn't know about it. All a courthouse staffer, moonlighting as media lookout, could have legitimately told the press is that "we saw so and so going into the court's chambers" or something along those lines.

Second, why would charges be sealed in the first place? Perhaps because the prosecution is afraid that someone will flee. That is the only legitimate reason I can think of to place an indictment under seal. If it was placed under seal to give government agents the opportunity for an early morning arrest it wouldn't surprise me one bit, given Andrew Weissman's dismal track record for hardball, heavy-handed tactics. (It will be interesting to find out someday just exactly what the government told a federal magistrate in order to get that no-knock warrant to search Paul Manafort's residence.)

Is it possible that the sealing was done in order to protect a defendant from having to spend the weekend (or at least one night) in DC jail? Unlikely. For defendants who do not turn themselves in by mid-morning in DC, the possibility of a night in jail is real. But if the prosecutors really cared about that, why not bring the charges on a weekday morning and allow the defendant to turn himself in the next day? This is done all the time.

Is it possible that the pending indictment report, true or false, is a deliberate ruse to see who will attempt to flee? In other words, does the government actually want someone to try to flee? After all, flight can be used as evidence of guilt in court. Unlikely, but anything is possible with Weissman in the number two slot.

We should find something out today. Here is Politico's excellent background piece by Darren Samuelsohn.

If there are any charges, expect them to be ancillary in nature. Look for false reporting violations or false statements to government agents. More to come.

UPDATE:

The Indictment is out and we will try to get it up as soon as possible. It is obvious that the prosecutors did the right thing in allowing Paul Manafort and Rick Gates to turn themselves in and that, in all likelihood, one of the defense attorneys leaked the news to CNN. Grand jury secrecy rules do not apply to witnesses or to those who receive their information from witnesses.

(wisenberg)

October 30, 2017 in Current Affairs, Grand Jury, Investigations, Legal Ethics, News, Prosecutions, Prosecutors, Searches | Permalink | Comments (0)

Thursday, October 19, 2017

Is the Schock Case Unraveling?

It's not every day that a federal district judge accuses the government of misleading the Court and demands corrective action. But it's happening in the Urbana Division of the Central District of Illinois. I posted here in March regarding the federal case against former Congressman Aaron Schock. Among other items of alleged government misconduct, the defense maintained that prosecutors improperly commented to grand jurors on Schock's failure to testify, in violation of his Fifth Amendment Privilege Against Self-Incrimination. The defense relied in part on an affidavit by a dismissed grand juror. After unequivocally denying the grand juror's allegation, the government clarified the record, more than six months later, admitting that government counsel "commented on or addressed Mr. Schock's testifying or decision not to testify before the grand jury" on eleven occasions. U.S. District Judge Colin Bruce was not amused, and ordered the government to review each of its previous filings "to ensure that no more false or misleading claims were made." Judge Bruce also gave the government 14 days to file a memo "detailing any further misrepresentations or misleading statements." Here is Judge Bruce's Order Requiring Government Memorandum re Misrepresentations. The government responded yesterday, denying that it had misrepresented anything to the Court, asking the Court to reconsider its finding regarding misrepresentation, and representing further that it had not intentionally made any materially misleading statements in its prior filings. Here is the Government's Compliance with the Court's October 3 Order and Motion to Reconsider. Schock, represented by George Terwillliger, Bob Bittman, Benjamin Hatch, Nicholas Lewis, and Christina Egan of McGuire Woods in DC and Chicago and by Jeffrey Lang of Lane & Waterman in Davenport, Iowa, wasted no time, not even a day, in firing back. Here is Schock's Motion to Strike or in the Alternative Leave to File a Response. Here as well is Schock's Proposed Response to Government's Compliance. In a future post, I will examine the nature of the government's comments to the grand jurors.

(wisenberg)

October 19, 2017 in Congress, Corruption, Current Affairs, Defense Counsel, Fraud, Grand Jury, Investigations, Judicial Opinions, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0)

Thursday, September 21, 2017

Mission Creep for Mueller? What Mission Creep? His Charter is Boundless.

I was on Tucker Carlson's show Tuesday night and he asked me whether Bob Mueller was guilty of "mission creep on a grand scale" by investigating "financial dealings going back some years." Presumably this was a reference to reports that Mueller and crew are investigating Paul Manafort's and President Trump's past financial arrangements with Russian citizens and business entities. I responded that Mueller's charter was broad. Special Counsel appointment letters, and the federal regulations covering the Special Counsel, are typically very vague, squishy, and capacious. This is not necessarily inconsistent with mission creep. It is to say that mission creep has to creep pretty far to run afoul of most Special Counsel charters. Attached is Rod Rosenstein Order Appointing Robert S. Mueller III as Special Counsel. Note that Rosenstein, in his capacity as Acting Attorney General (because Jeff Sessions had recused himself), made the appointment in order to "ensure a full and thorough investigation of the Russian government's efforts to interfere in the 2016 presidential election." Mueller is authorized 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)."

Note that the overall purpose of the Mueller appointment was to ensure a full and thorough investigation of Russian interference in the 2016 election. How can an investigation be full and thorough if Mueller is not entitled to follow every potential lead, including past business dealings? Note also that Mueller is authorized to take over the pre-existing FBI investigation confirmed by Comey. Thus, anything and everything already being looked at by Comey and his people is fair game for Mueller.

Then come the three non-exclusive categories of inquiry. First, any links or any coordination between the Russian government and individuals associated with Trump's campaign. With respect to the Russians, this would include individuals acting at Moscow's behest. Mueller would need to investigate who was acting at Moscow's behest. With respect to Trump's campaign this would include people informally associated with the campaign, paid or unpaid, including family members.

Second,  any matters that arose or may arise directly from the investigation. Hypothetical example? The FBI questions a former Trump associate from Russia who reveals that Trump violated the Foreign Corrupt Practices Act four years ago in his dealings with Brazil. It's covered.

Third, any other matters within the scope of 28 CFR§ 600.4(a), which reads in part as follows:  "The jurisdiction of a Special Counsel shall also include the authority to investigate and prosecute federal crimes committed in the course of, and with intent to interfere with, the Special Counsel's investigation, such as perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses; and to conduct appeals arising out of the matter being investigated and/or prosecuted."

So you see, where Special Counsel Mueller, and virtually all Special Counsel are concerned, there may be mission creep, but there is no such thing as unauthorized mission creep. It may not be right. It may not be fair. But it's the law.

And one other thing. The media's focus on Mueller's alleged investigation of obstruction of justice in connection with Comey's firing misses the mark in my view. Absent something additional, the firing of Comey, even if done with the specific intent to shut down the Russia investigation, is alone insufficient to support obstruction of justice charges. But President Trump's many reckless statements and warnings, prior to Ty Cobb's arrival on the scene, may potentially be relevant on the issue of knowledge or intent. For example, if something shady is found in connection with past family dealings in Russia, President Trump's warning to Mueller not to go into that area could easily be admissible in evidence.

(wisenberg)

September 21, 2017 | Permalink | Comments (1)

Saturday, September 16, 2017

DOJ Considering Changes to Yates Memo

According to Reuters, Deputy Attorney General Rod Rosenstein said on Thursday that there may be changes to the Yates Memo "in the near future." As discussed at length on this blog (see here, here, here, and here; see also here for an article on the Principles of Prosecution and the Yates Memo), the Yates Memo was released by the DOJ in 2015 in response to criticism that the government had failed to prosecute individuals, particularly on Wall Street, related to the financial crisis of the late 2000s.  The Yates Memo responded by focussing federal prosecutors on targeting individuals and requiring that corporations provide significant information on employee conduct to receive credit for cooperating with the government. The Yates Memo states, "[t]o be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct." 

According to reports, Rosenstein said, "It is under review, and I anticipate that there may be some changes to the policy on corporate prosecutions."  It is unclear how far the review extends or whether possible changes extend beyond the Yates Memo and include revisions to the larger Principles of Federal Prosecution of Business Organizations contained in the U.S.A.M. Whatever changes are made, it is unlikely that the focus on individuals will diminish. Attorney General Sessions has publicly commented on his commitment to holding individuals accountable for corporate misconduct. We will have to wait, therefore, to see whether significant changes or mere reiterations of current policy priorities are on the horizon.  

(LED)

September 16, 2017 in Deferred Prosecution Agreements, Investigations, Prosecutions, Prosecutors | Permalink | Comments (0)

Friday, August 25, 2017

Second Circuit Chills Joint Defense Communications in U.S. v. Krug.

In a remarkable opinion issued last Friday in United States v. Krug, the Second Circuit ruled that a courthouse hallway conversation between two co-defendants covered by the same Joint Defense Agreement, and overheard by a third covered co-defendant, did not constitute a privileged discussion protected under the common interest doctrine. Three Buffalo police officers indicted for civil rights violations had just attended a pretrial hearing at the federal courthouse. Defendants Krug, Wendel, and Kwiatkowski stood in a hallway right outside of a closed conference room where their attorneys were briefly discussing the case. The attorneys could not hear their clients. The opinion redacts the precise conversation but notes that, "the hallway discussion consisted of one member of the JDA (Wendel) conveying his independent, non-legal research to another member of the JDA (Krug) while noting he had sent the same research to his attorney. No legal advice was mentioned, much less shared or otherwise conveyed, among the co- defendants. The mere fact that the communications were among co-defendants who had joined in a joint defense agreement is, without more, insufficient to bring such statements within the attorney-client privilege." Kwiatkowski decided to plead guilty a week before trial. The 302 of his proffer, sent to the co-defendants' attorneys, revealed the hallway conversation's contents. Krug moved to exclude the comments from admission at trial. The trial judge granted the motion. Interlocutory appeal to the Second Circuit followed. The Second Circuit, in reversing the trial court, reasoned that the comment was not protected, because "[t]he excluded statements were not made to, in the presence of, or within the hearing of an attorney for any of the common-interest parties; nor did the excluded statements seek the advice of, or communicate advice previously given by, an attorney for any of the common-interest parties; nor were the excluded statements made for the purpose of communicating with such an attorney." That's quite a stretch. When you convey to a co-defendant that you have conducted some non-legal, but clearly relevant, internet research and sent it to your attorney, aren't you implicitly suggesting that your co-defendant inform his own attorney about the same research? And doesn't that make your statement one that was made for the purpose of communicating with an attorney for one of the common interest parties? Even more chilling is the following comment from the panel: "While expressing no view as to whether all such circumstances would invoke the privilege, we find nothing in the circumstances here to support the application of the privilege, and accordingly reverse the district court’s order of exclusion." In other words, even if one of the joint defense attorneys had been present, the Second Circuit will not say whether the comments would have been privileged. So be careful out there and remember that even strong written JDAs will not necessarily protect statements made between covered co-defendants. Even co-defendants covered by the same JDA should not be allowed to confer among themselves and communication between a covered defendant and the lawyer for a covered co-defendant should never take place absent the presence of the first defendant's own attorney. Terrence Connors of Connors LLP represents Krug and Rodney Personius of Personius Melber LLP represents Wendel. Here's hoping that they ask for en banc reconsideration.

(wisenberg)

 

August 25, 2017 | Permalink | Comments (0)

Monday, August 21, 2017

Bye Bye Billman. Bye Bye Bollin. Fourth Circuit Rejoins Legal Civilization and Prohibits Pretrial Restraint of Substitute Assets.

In an en banc decision in United States v. Chamberlain, issued on Friday, the Fourth Circuit overruled United States v. Billman and United States v. Bollin, holding that 21 USC 853(e) does not authorize pre-conviction seizure of untainted substitute assets: "[W]e overrule our precedent construing Section 853 and other identically phrased restraint provisions allowing the pretrial restraint of substitute assets and vacate the district court’s order relying on that precedent." In the process of explaining itself, the Fourth Circuit implicitly acknowledged that its precedent was never based on proper statutory construction: "[T]he plain language of Section 853 indicates that Congress did not intend the statute to permit such restraint. Accordingly, we hereby overrule Billman and Bollin." No other federal circuit had adopted the Fourth Circuit's view of Section 853. While Bollin was something of a legal laughingstock, it was no laughing matter to the countless defendants who saw their untainted assets seized before trial, effectively denying them the right to counsel of their choice.

The re-examination of Billman and Bollin was prompted by the Supreme Court's language and rationale in Luis v. United States 136 S.Ct. 1083 (2016) and the Government's brief in Honeycutt v. United States 137 S.Ct. 1626 (2017), which conceded that "under Luis, Section 853(e)(1)(A) does not permit the pretrial restraint of substitute property."

This is a great victory for the criminal defense bar, textualists, and all who oppose result-oriented statist jurisprudence.

Congratulations first and foremost to Chamberlain's attorney Elliot Sol Abrams of Cheshire Parker Schneider & Bryan in Raleigh, NC.

The following attorneys also deserve recognition for the role each played:

Abbe Lowell - lead counsel and author for amicus Cato Institute and NACDL.

Scott Coyle (Patton Bogs, formerly Chadbourne and Park) - counsel and co-author of brief for amicus Cato Institute and NACDL.

Thomas Maher - counsel for amicus NACDL.

Samuel Hartzell (Womble Bond, formerly Womble Carlyle, Raleigh, NC) - co-author of Chamberlain briefs. 

Howard Srebnick, Josh Greenberg, Josh Shore & Terrance Reed - who identified the relevant Solicitor General's position in the Honeycutt appeal and provided additional advice and assistance.

(wisenberg)

 

August 21, 2017 | Permalink | Comments (0)

Saturday, June 17, 2017

Misreading Rod Rosenstein and Missing a New Angle on Obstruction

Talking heads were in a dither yesterday, trying to decipher DAG Rosenstein's brief statement about the danger of relying on news accounts from supposedly reliable sources. See here for the Washington Post's account. Below is Rosenstein's statement in full:

Americans should exercise caution before accepting as true any stories attributed to anonymous ‘officials,’ particularly when they do not identify the country — let alone the branch of agency of government — with which the alleged sources supposedly are affiliated. Americans should be skeptical about anonymous allegations. The Department of Justice has a long established policy to neither confirm nor deny such allegations.

My reading of it is simple. Any prosecutor or case agent who has ever been involved in a high-profile investigation knows that the vast majority of press accounts about the investigation are far off the mark. Rosenstein is acutely aware of this phenomenon, having worked for Ken Starr in the Office of Independent Counsel in pre-Monica days. Yet the prosecutors and case agents are generally not allowed to talk to the press about the investigation, even to rebut preposterous stories, because this would entail disclosing highly confidential information, and prosecutors and case agents are subject to strict secrecy obligations. Self-important and self-interested people, however, inside and outside of law enforcement, love to parade their inside knowledge to the press, even anonymously. Rosenstein is trying to make that point, but he is doing something else as well. I think he is trying to throw a lifeline to Bob Mueller.

As those who professes to be an expert on television should know, sources interviewed by the government or brought before the grand jury are not, except in rare instances, under any obligation of secrecy. So a person whose lawyer is called by an Assistant Special Counsel or FBI Special Agent and asked to schedule an interview or accept service of a federal grand jury subpoena can shout it to the rooftops or anonymously leak it.

What if the source contacted by the government for an interview is strategically aligned with the target or subject of the overall investigation? What better way to conspire to attack the prosecution team than to anonymously leak your client's upcoming interview or grand jury appearance to the press, tip off the main subject's lawyer, and then sit back and watch while that lawyer attacks the prosecution team for illegal leaks? It is possible that something like this is happening right now to Mueller and company, and I believe that Rosenstein's statement was meant to cover this situation as well. The bottom line is that Mueller and company may not be leaking anything, yet are essentially powerless to do anything about the accusations against them.

But what if there really is an orchestrated effort by President Trump and his attorneys to have their allies leak to the press and then falsely accuse Team Mueller? In my view, this might supply the falsehood element that is required to prove a criminal obstruction of justice and has been, so far as we know, missing in the case of President Trump--Jeff Toobin and company to the contrary notwithstanding. Absent the extra element of lying or bribery, the firing of Comey or anybody else by Trump does not constitute obstruction. As I have previously said in these pages with regard to Comey's firing:

[B]arring new information, the idea that [Comey's] firing itself constitutes criminal obstruction is unsound. It was no more an obstruction of justice than Nixon's firing of Archie Cox. Trump could fire Rod Rosenstein and Bob Mueller tomorrow and order their successors to shut down the Russia Investigation and it still wouldn't be an obstruction of justice. He is the chief executive of the Executive Branch and has the authority to fire either one of them. Don't think it is an impossibility. Of course, it would signal the beginning of the end of Trump's tenure.

This kind of thing would be extremely difficult to prove, and trying to prove it could seriously sidetrack the investigation and alienate the press. But if it is happening and Mueller can prove it, such conduct could constitute criminal obstruction of justice.

(wisenberg)

June 17, 2017 | Permalink | Comments (0)

Wednesday, June 7, 2017

DOJ Ends Third Party Settlement Practice - But What is No Longer Allowed?

Attorney General Jeff Sessions issued a press release today here putting an end to settlements that had payments to third parties as a condition of settlement. The press release says that " [w]ith this directive, we are ending this practice and ensuring that settlement funds are only used to compensate victims, redress harm, and punish and deter unlawful conduct.”  

Will this mean that Chris Christie's agreement as US Attorney with Bristol-Myers Squibb and the University of Medicine and Dentistry of New Jersey that included an endowment of an ethics chair to Seton Hall Law School, will no longer be allowed in future agreements(see here, here, and here - see para. 20)? 

And will all the groups receiving funds from the BP Plea Agreement find that innovative resolutions will no longer be allowed in the future agreements?  For example the BP plea agreement included $350 million to the National Academy of Sciences for the purposes of Oil Spill prevention and response in the Gulf of Mexico. (see here)  The Court stated there -

"The National Academy of Sciences is required to use the funds to advance scientific and technical understanding to improve the safety of offshore oil drilling, production and transportation in the Gulf of Mexico." 

"Of course, the Court realizes that the fines and other penalties provided by the plea agreement can do nothing to restore the lives of the 11 men who were killed. But in the payment to the National Academy of Sciences, the agreement at least directs money towards preventing similar tragedies in the future. That the bulk of the payments to be made under the plea agreement are directed toward restoring the Gulf Coast and preventing future disasters, contributes to the reasonableness of the plea agreement."

AG Sessions says that "[u]nder the last Administration, the Department repeatedly required settling parties to pay settlement funds to third party community organizations that were not directly involved in the litigation or harmed by the defendant’s conduct.  Pursuant to the Attorney General’s memorandum, this practice will immediately stop."

It remains to be seen what will get included and what will be omitted in future non-prosecution, deferred prosecution, and plea agreements.  The actual memo is here.

(esp) 

June 7, 2017 in Civil Enforcement, Deferred Prosecution Agreements, Environment, News, Prosecutions, Prosecutors | Permalink | Comments (0)

Tuesday, May 23, 2017

Environmental Crime Prosecutions Down

Trac reports - "The latest available data from the Justice Department show that during the first six months of FY 2017 the government reported 152 new environment prosecutions. If this activity continues at the same pace, the annual total of prosecutions will be 304 for this fiscal year. According to the case- by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC), this estimate would be the lowest ever recorded since the Justice Department started tracking its environmental prosecutions over two decades ago."  For more information and data see here.

(esp)(w/disclosure that she received her BS degree from Syracuse University).

May 23, 2017 in Environment, Privileges | Permalink | Comments (0)

Saturday, May 20, 2017

Pucker Up Buttercups: It's Mueller Time

Scattershooting, while wondering whatever happened to John B. Henderson

The appointment of Bob Mueller as Special Counsel sends an unmistakable signal to every politico, white collar lawyer and potential target in DC. It's time to get serious. Think Fitzgerald on steroids. This will be a real investigation, with a real grand jury, and real prosecutors who know how to investigate, prosecute and keep their mouths shut. Expect plenty of collateral damage as well. There won't be any immunity giveaways or hand-wringing negotiations over the breadth of subpoenas. 

A number of commentators have suggested that Mueller is only "overseeing" the Russia Investigation, apparently in the same sense that an Attorney General oversees various criminal investigations within DOJ. Get a grip. Mueller will be totally involved in all strategic and tactical aspects of the case. He will be hands on. For God's sake, he and his lieutenants just resigned from their partnerships at Wilmer Hale to take on what could be one of the most significant criminal investigations in U.S. History, an investigation with profound implications for the country. He'll be there every day, every step of the way, and in total control. 

In today's WSJ (subscription required), Kimberly Strassel plants the seeds, in The Mueller Caveat, for a future Trump attack on Mueller. Of course Mueller's integrity is "unquestioned" but Strassel asks whether he can be "objective" about his old buddy Comey. This question assumes that Comey's firing will loom large in the Russia Investigation. I seriously doubt it. The contacts between Comey and President Trump in the period between inauguration and firing will certainly be looked at as a key to President Trump's intent and motives. But, barring new information, the idea that the firing itself constitutes criminal obstruction is unsound. It was no more an obstruction of justice than Nixon's firing of Archie Cox. Trump could fire Rod Rosenstein and Bob Mueller tomorrow and order their successors to shut down the Russia Investigation and it still wouldn't be an obstruction of justice. He is the chief executive of the Executive Branch and has the authority to fire either one of them. Don't think it is an impossibility. Of course, it would signal the beginning of the end of Trump's tenure.

Meanwhile, over on the left, the Comey flacks are out in force. It's comedy time at the New York Times with Saint James and Ben Wittes in starring roles. Michael S. Schmidt's NYT puff piece on Comey is a classic of the genre. Lawfare's Ben Wittes, an admitted Comey confidante, is interviewed and holds forth for the record. According to Wittes, Comey, pre-firing, had "concerns" about Rod Rosenstein's likely confirmation by the Senate. "He said, 'I don't know. I have some concerns. He's good, he's solid but he's also a survivor and you don't survive that long without making some compromises and I'm concerned about that.'" Translation: "Anyone who might consider firing me is by definition compromised." What a hoot. Comey would know all about survival and compromise. He's a 17 year DOJ veteran, who left at one point to take a $6 million per year job at Lockheed. Rosenstein on the other hand, prior to becoming DAG, spent his entire career in public service without a hint of impropriety. His reputation for straight-shooting is impeccable. Notably, Schmidt nowhere mentions Wittes's recent and unhinged hit piece on Rod Rosenstein in Lawfare.

I have a slightly different interpretation of Comey's concerns. I would have been concerned too, had I been in his shoes. Comey had been widely and correctly condemned by a broad and impartial sector of the legal and law enforcement community for his improper interference in the political process--an interference that violated longstanding DOJ policies and usurped DOJ's prosecutorial role. But Loretta Lynch was too politically damaged to fire him and Sally Yates, as a lame duck, was too weak. Comey knew that Rosenstein had the integrity and the stature to pull it off. Meanwhile, also in classic fashion, the broadcast media parroted the NYT. Joe Scarborough on Friday morning's show breathlessly reported Comey's "concerns" as if Comey, yesterday's goat, is now the nation's ethical ombudsman. 

Whatever happened to the idea that a respected public servant can make a serious mistake, even one that justifies his or her firing, and still be judged an honorable person based on the whole of his or her career? I know numerous people within the FBI and DOJ who have worked with Comey and have enormous respect for his abilities and integrity. This doesn't mean that he is flawless or that his conduct during the election renders him untouchable. By all means, let's have a public airing of all of the circumstances surrounding Comey's firing, assuming that it can be done without compromising Mueller's work. There is little doubt of President's Trump motivations. But let's not conflate the impropriety of President Trump's motives with the improprieties catalogued in Rosenstein's Memo.

(wisenberg)

May 20, 2017 | Permalink | Comments (0)

Thursday, May 18, 2017

Another Major Corruption Scandal Hits Brazil

As I mentioned in a post a few weeks ago, the Second Global White Collar Crime Institute will be held in Sao Paulo, Brazil on June 7-8, 2017 at the Law Offices of Trench Rossi Watanabe. The program for the event is now available online.  What was already shaping up to be a fascinating conference will now be even more interesting with news breaking overnight of another major Brazilian corruption scandal.  

According to the New York Times, the Brazilian newspaper O Globo alleged overnight that a food company executive taped a conversation with Brazilian President Michel Temer in March that included discussions of "hush money" being paid to a jailed politician.  According to the the New York Times, President Temer is also alleged to have told the food company executive to pay a lawmaker in relation to a dispute at a company facility.  The President of Brazil issued a statement in response to the O Globo story denying the allegations, and the New York Times noted in its article that the paper had not yet independently confirmed the allegations. 

According to The Rio Times, the food company executive in question, Joesley Batista, told federal prosecutors about the conversation as part of his cooperation pursuant to a plea bargain.  Batista had been implicated in the Carwash corruption investigation in Brazil.  After news of the allegations broke, lawmakers from several political parties called for an investigation.  There were also calls for the President to resign.  According to The Rio Times, PSB national president Carlos Siqueira told local media, "The resignation of the President has become an imperative not to aggravate the crisis further.  The Temer government ended today." 

This latest alleged scandal comes at a time when Brazil is still reeling from the fallout of the Petrobras scandal, a case that led to the downfall of former Brazilian President Dilma Rousseff.  These latest developments will certainly be ones to watch as corruption allegations continue to plague the Brazilian government. 

(LED)

May 18, 2017 in Corruption, International, News | Permalink | Comments (0)