In white collar cases, prosecutors often stress the signs or "indicia" of fraud inherent in a given defendant's conduct. In the FBI/DOJ investigation of Secretary Clinton we have several signs of incompetence and/or highly irregular conduct on the part of those in charge. The one that stands out most clearly to anyone who practices white collar criminal defense was the decision to allow Cheryl Mills to attend Secretary Clinton's FBI interview. Competent prosecutors do not allow a key witness to participate as an attorney in an FBI interview of the main subject. It just isn't done. It isn't a close question. It is Baby Prosecution 101. Director Comey's attempt to justify this decision during yesterday's House Judiciary Committee Oversight Hearing was disingenuous and disgraceful. According to Comey, the FBI has no power to control which attorney the subject of an investigation chooses to represent her during an interview. This is literally true, but irrelevant and misleading. Prosecutors, not FBI agents, run investigations. Any competent prosecutor faced with the prospect of Ms. Mills's attendance at Secretary Clinton's interview would have informed Clinton's attorneys that this was obviously unacceptable and that, if Clinton insisted on Mills's attendance, the interview would be conducted under the auspices of the federal grand jury. At the grand jury, Secretary Clinton would not have enjoyed the right to her attorney's presence in the grand jury room during questioning. In the event Clinton brought Ms. Mills along to stand outside the grand jury room for purposes of consultation, competent prosecutors would have gone to the federal judge supervising the grand jury and attempted to disqualify Ms. Mills. In all likelihood, such an attempt would have been successful. But of course, it never would have gotten that far, because Secretary Clinton will do anything to avoid a grand jury appearance. So, Director Comey's response was a classic dodge, one of several that he perpetrated during yesterday's hearing. As noted above, the decision to allow Ms. Mills to attend Secretary Clinton's FBI interview was only the clearest example to date of irregular procedures sanctioned by the prosecutors in charge of the Clinton email investigation. More to come on that in a subsequent post.
Category: Grand Jury
-
The New York Times Magazine several weeks ago published a lengthy, largely sympathetic article about Graham Spanier, the former Penn State president (Sokolove, "The Shadow of the Valley"), see here, who is awaiting trial on charges of perjury and other crimes in connection with the Pennsylvania grand jury investigation of his alleged complicity or nonfeasance concerning the actions of now-convicted (and affirmed on appeal) former assistant football coach Jerry Sandusky.
The article rather gently criticized the Freeh report, commissioned by the university, as I too did (see here), and asserts that it "probably led to [Spanier's] indictment." Commissioning an independent investigative report — generally either by a former prosecutor or judge, or a large law firm — is the de rigueur response of institutions or corporations accused of wrongdoing. An independent investigative report, especially by a respected authority, has the weight of apparent impartiality and fairness and thus the appearance of accuracy. However, the investigative report — frequently done with no input from the accused or presumed wrongdoers (since, fearful of prosecution, they choose not to be interviewed) — is often based on an incomplete investigation. Further, since the investigator is expected to reach conclusions and not leave unanswered questions, but unlike a prosecutor may not be required to have those conclusions tested by an adversary in an open forum, such investigations, like the Freeh investigation, are often based on probability, and sometimes even speculation, more than hard evidence. Lastly, the "independent" report, like the report concerning Gov. Christopher Christie's alleged involvement in Bridgegate, may be less than independent.
* * *
The article also discusses an interesting pretrial motion in Spanier's case concerning a question that had puzzled me since the Penn State indictments were announced over two years ago — what was Penn State's counsel doing in the grand jury? Sub judice for six months is a motion for dismissal of the indictment and other relief related to the role of the Penn State general counsel ("GC") who appeared in the grand jury with Spanier, and also earlier with two other officials who were indicted, Tim Curley, the former athletic director, and Gary Schultz, a vice president.
According to the submitted motions (see here , here and here ), largely supported by transcripts and affidavits, the GC appeared before the grand jury with Spanier (and also separately with Curley and Schultz) and Spanier referred to her as his counsel (as also did Curley and Schultz). According to what has been stated, neither she, who had previously told the supervising judge — in the presence of the prosecutor but not Spanier — that she represented only Penn State, nor the prosecutor corrected Spanier. Nor did the judge who advised Spanier of his right to confer with counsel advise Spanier that the GC was actually not representing him or had a potential conflict.
Later, after Spanier's grand jury testimony, according to the defense motion, the GC — represented by Penn State outside counsel — was called to testify before the grand jury. Curley and Schultz — both of whom had by then been charged — objected in writing to the GC's revealing what they asserted were her privileged attorney-client communications with them. Spanier apparently was not notified of the GC's grand jury appearance and therefore submitted no objection.
Prior to the GC's testimony, Penn State's outside counsel asked the court essentially to rule on those objections and determine whether the GC was deemed to have had an attorney-client relationship with the individuals, as they claimed, before Penn State decided whether to waive its privilege (if any) as to the confidentiality of the conversations. Upon the prosecutor's representation "that he would put the matter of her representation on hold" and not "address . . . conversations she had with Schultz and Curley about [their] testimony," the judge chose not to rule at that time on the issue of representation, which he noted "perhaps" also concerned Spanier, and allowed her to testify, as limited by the prosecutor's carve-out.
Nonetheless, despite the specific carve-out to conversations with Schultz and Curley analogous to those she had with Spanier and the judge's mention that the issue might also apply to Spanier, the prosecutor questioned the GC about her conversations with Spanier in preparation for his testimony. Her testimony was reportedly harmful to Spanier (see here). At no time did the GC raise the issue of whether her communications with Spanier were privileged.
Whether the motion will lead to dismissal, suppression of Spanier's testimony or preclusion or limitation of the GC's testimony, or none of the above, will be determined, presumably soon, by the judge. Whatever the court's ruling(s), I have little hesitation in saying that is not how things should be done by corporate or institutional counsel. At the least, even if the GC were, as she no doubt believed, representing the university and not the individuals, in my opinion, the GC (and also the prosecutor and the judge) had an obligation to make clear to Spanier (and Schultz and Curley) that the GC was not their counsel. Additionally, the GC had, in my view, an obligation to make clear to Spanier that the confidentiality of his communications with her could be waived by the university if it (and not he) later chose to do so. Further, the GC, once she was called to testify before the grand jury, had in my opinion an obligation to notify Spanier that she might be questioned as to her conversations with him in order to give him the opportunity to argue that they were privileged. And, lastly, the GC had, I believe, an obligation to ask for a judicial ruling when the prosecutor went beyond at least the spirit of the limit set by the judge and sought from her testimony about her communications with Spanier.
(goldman)
-
One of the increasing incursions into constitutional rights in the white-collar area is the expansion of the "required records" exception to the Fifth Amendment privilege against self-incrimination. In general, that doctrine provides that an individual or entity required by law to maintain for regulatory purposes certain records has no Fifth Amendment right to refuse to produce them to the government.
The Second Circuit last month, in affirming a contempt finding against an individual for failing to produce to a grand jury records of foreign bank accounts mandated to be kept by regulations promulgated pursuant to the Bank Secrecy Act, 31 CFR 1012.420 ("BSA"), held, in accord with prior rulings by other circuits, that the "required records" exception to the Fifth Amendment privilege against self-incrimination pertains to the production of such records. In Re Grand Jury Subpoena Dated February 2, 2012, (13-403-CV, Dec. 19, 2013).
The individual contended that he had a Fifth Amendment right to refuse to comply with a grand jury subpoena for foreign bank records. He claimed that the subpoena put him in a Catch-22 position: produce documents that might incriminate him or confirm that he failed to maintain records of his foreign bank accounts, which also might incriminate him. The court essentially said "tough," and affirmed the contempt order.
The court first considered whether the "act of production" doctrine (see United States v. Hubbell, 500 U.S. 27 (2000)) applied to "required records." Under that doctrine, generally a person could on Fifth Amendment grounds resist a subpoena for the production of records unless the government could demonstrate it was a "foregone conclusion" that the person actually possessed such records. Although the contents of the records, as in the case of "required records," might not be privileged, by producing them the individual essentially incriminated herself by its production by admitting, among other things, that she possessed such records. The court held that the Fifth Amendment did not apply to required records, either as to the content of or production of such records, and thus the "act of production" privilege, a form of Fifth Amendment protection, did not apply.
The court then applied the three-prong test of Grosso v. United States, 390 U.S. 62 (1968), to determine whether the required records doctrine applied to the BSA regulation. That test provides, first, that the purpose of the legal requirement must be "essentially regulatory;" second, that the information sought must be of a type "customarily kept;" and third, that the records must have "public aspects" which make them at least analogous to public documents. The court then held that the regulation, although it was designed in part to facilitate criminal prosecutions, was "essentially regulatory" in that it did not target only those suspected of criminal activity since possession of foreign bank accounts by itself was not unlawful. Second, it held that the records were "customarily kept" since holders of bank accounts are likely to be aware of or have records of the details of their accounts. Third, the court held that "records lawfully required to be kept" for purposes of constitutional analysis by definition have "public aspects." Practically, such a finding eliminated this third prong as an independent prerequisite for application of the exception.
In sum, the court essentially ruled that any records ordinarily kept by individuals that are required to be made available to governmental authorities pursuant to a law not primarily designed to detect criminal activity lack Fifth Amendment protection.
Thus, the decision essentially gives federal prosecutors the ability to subpoena any person and demand that she produce any foreign bank records she possesses, even absent any knowledge or suspicion that she has such an account. To be sure, in this case, and virtually all other reported cases involving subpoenas of foreign bank accounts, the government appears to have had a considerable basis to believe the person subpoenaed does have a foreign bank account. The Second Circuit's ruling, however, at least implicitly, does not require that such governmental knowledge be a prerequisite for an enforceable subpoena for foreign accounts. "Fishing expeditions" for foreign bank account information appear to be allowed.
I would not be surprised, therefore, to see a considerable increase in the number of governmental subpoenas for records of foreign bank accounts, and perhaps the addition of a boilerplate request for foreign bank records in other subpoenas for financial records. As they say, there's no harm in asking.
-
The statute of limitations, I used to think, was designed to allow a wrongdoer who is not arrested for a period of years to have a certain sense of repose to be able to go on with his life without fear of arrest for that wrongdoing. Recent legislative and prosecutorial activity in extending statutes of limitations in areas such as child sex crimes and sex crimes where DNA of the otherwise-unidentified perpetrator has been preserved has undermined this rationale. Further, the use of conspiracy statutes in federal prosecutions also allows prosecutors to effectively punish defendants for acts committed beyond the ordinary statute of limitations as part of a conspiracy that continues into a period within the statutory limit.
White-collar prosecutors often view the statute of limitations, generally five years from the date of occurrence of the crime, as the period which they have to prepare a case to secure an indictment. Courts rarely, if ever, dismiss a case for a delay in indictment if the indictment is returned within the statutory period even if the defendant can demonstrate that the delay was due solely to prosecutorial lassitude and that the defendant has been prejudiced by loss of witnesses, dimming of witnesses' memories, and other factors that hamper her right to present a defense. And arguments at sentencing that the defendant has led a blameless but fearful life for the many years the prosecution took to indict him generally fall on deaf ears.
Occasionally, prosecutors find they are unable to prepare to their satisfaction cases within the statute of limitations period and ask defense counsel to agree to extend the limit. Unless there is a possibility that additional time would afford a defense lawyer a realistic possibility of dissuading the prosecutor from indicting or of securing a favorable pre-indictment plea disposition, there is rarely a good reason for a defense lawyer to agree to such an extension. Yet, defense lawyers frequently acquiesce to the prosecutor's request.
Some years ago, in a matter involving a series of allegedly false billings to the government, a federal prosecutor asked me to agree on behalf of my client to extend the statute of limitations. In response to my question why he sought an extension, the prosecutor said, quite frankly, that he had been too busy with other matters to bring the matter before a grand jury and that some (but not all) of the charges would soon be time-barred. I asked him why I, on behalf of the defendant, should therefore consent to a waiver of the statute. He responded that if I did not consent to the extension, he would charge my client as part of a massive conspiracy to defraud the United States in order to include the false billings on the expired dates (but not as separate charges). I told him that I would not agree.
A few days later, I received a letter from the prosecutor, thanking me for agreeing to an extension of the statute of limitations and including a waiver form to be signed by my client and me. Concerned that a failure to protest might be construed at a later time by a judge as an acquiescence to the prosecutor's request for an extension, especially if the prosecutor (or a successor) contended that I had agreed orally, I fired off a letter expressing my surprise at the letter and reiterating that I did not and would not consent to an extension. (I do not know whether the prosecutor's letter was prepared prior to our conversation in the expectation that I would consent and then sent in error, or was sent in the hope that I would change my mind or execute it without paying attention.) The client was never indicted.
As this case illustrates, it is my belief that defense lawyers too readily consent to prosecutors' requests to extend the statute of limitations. Although I personally am generally agreeable to consenting to an extension of time because an adversary is busy and needs more time to prepare papers, when such consideration clearly is to the detriment of a client, I believe a lawyer should not extend such professional courtesy, even if she fears she would be marked by the prosecutor's office as an attorney who deserves no personal consideration. Effective advocacy should generally trump civility.
I therefore note with interest that Reed Brodsky, the defense lawyer for Paul J. Konigsberg, a targeted long-time accountant for and close associate of Bernard Madoff, reportedly had refused to consent to an extension of the limitations period on behalf of his client. See here. I do not know what reasons, if any, the prosecution gave for its request and what reasons Brodsky had to refuse the request. I do know that a trial of some of Mr. Madoff's former employees, which is expected to go beyond the statute of limitations cutoff date, began this week. Of course, in the event any or all of those employees are convicted (or even not convicted), they might well then agree to cooperate with the authorities against Mr. Konigsberg.
If any of those defendants are available to testify against Mr. Konigsberg, the prosecutor will certainly be able to use them as witnesses. The prosecutor should not, however, properly be able to use the grand jury subpoena power or the grand jury itself to obtain their testimony or other additional evidence to prosecute Mr. Konigsberg for the crimes for which he was charged since a grand jury cannot be used to gain evidence for already-indicted cases or for additional Madoff-related crimes since they are time-barred. To be sure, at times prosecutors do secure additional evidence for use in a pending case when they conduct a grand jury investigation with a view toward indicting additional defendants or prosecuting not-yet-charged crimes against an already-indicted defendant. That is unlikely here.
-
Virtually every presidential State of the Union speech, or its gubernatorial equivalent, calls for tougher criminal laws and/or new investigative resources. President Obama's address last week was no exception. The President called for the establishment of a new unit "to crack down on large scale fraud and protect people's investments." As blog editor Ellen S. Podgor wondered, see here, it was unclear how this unit would differ from the Financial Fraud Enforcement Task Force established in 2009. I too asked whether this purportedly new unit was anything other than a repackaged version.
The announcement of a new prosecutorial unit also was perhaps an unintended implicit admission that existing federal law enforcement agencies had been less than successful in dealing with serious alleged crimes which some believed had caused the financial crisis. Both Attorney General Eric Holder and SEC Enforcement Director Robert Khuzami defended their record, stating that not every mistake is a violation of law. Holder said, "We also have learned that behavior that is reckless or unethical is not necessarily criminal," a statement which (aside from leading me to ask why it had taken him so long to realize it) should be painted on the walls of every prosecutorial office.
The principal apparent structural difference between this unit, entitled the Unit on Mortgage Origination and Security Abuses ("UMOSA"), and the prior one is, besides its more focused jurisdiction, that this is a joint task force of both federal and state officials. One of its co-chairs — albeit one of five, four being DOJ or SEC officials — is New York State Attorney General Eric Schneiderman, who has shown his independence and aggressiveness toward Wall Street by pushing for stronger sanctions against financial institutions for robo-signing and other improprieties committed after the crisis arose.
Generally, joint federal-state task forces are a one-way street. The feds take the best criminal cases and leave the dregs to the state. One purported justification for such selection is that federal laws and rules of evidence make it easier for federal prosecutors to bring cases and win convictions. Schneiderman has indicated somewhat to the contrary — that New York and other state laws give state attorneys general greater means to bring both civil and criminal prosecutions.
The idea of combining federal and state resources is generally a good one. Too often law enforcement agencies refuse to share information with other agencies, if at all, until they have determined the information was insufficient for them to act on, often too late for use by the other agencies. On the other hand, I fear that some task force constituents might attempt to make an end run around constitutional and statutory laws and rules, specificially Fed.R.Crim.Pro. 6(e), which, generally, as relevant here, prohibits disclosure of grand jury information to non-federal officials. Of particular concern is whether information secured by federal grand juries, much of which is through immunized testimony, will be provided for use by the states. Both Attorneys General Holder and Schneiderman seem aware of this restriction, but both appear to view it as an obstacle to overcome rather than a right to ensure. How scrupulous they will be in upholding the rule and spirit of grand jury secrecy will be seen.
(goldman)
-
Check out – Sue Reisinger, Corporate Counsel, She Asked, Counsel Told: Case Against Glaxo Attorney Is Dismissed
The former VP and Associate General Counsel of GlaxoSmith Kline had been charged with a 6-count Indictment for the alleged crimes of obstruction (1512), falsification and concealment of documents (1519) and false statements (1000). The Indictment against Lauren Stevents has now been dismissed, but it is without prejudice.
Stevens claimed a defense to the charges of advice of counsel in her responses to the FDA's inquiry. The government response was that 18 USC 1519 is a general intent crime and therefore a "good faith reliance on advice of counsel is only a defense to specific intent crimes."
The court did not agree with the government, citing applicable sources that provide a solid basis for its holding. My take is that the statute clearly is requiring two intents – to "knowingly alters, destroys, multilates, conceals, coversup, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impeded, obstruct, or influence the investigation ….." With two intents it seems clear that one should use specific intent here.
But what is more questionable here is that the government thinks that specific intent should not be required here. Should you really prosecute someone who may not have had the specific intent to do these alleged acts? Will this achieve the deterrence from criminality that we desire? Irrespective of whether one accepts the government's claim that advice of counsel is an affirmative defense or the defense and court position that it negates the mens rea, is prosecution of this alleged conduct the way we want to spend valuable tax dollars?
This case is a perfect example of how we are failing to use our resources wisely. Do we really need to spend money prosecuting folks who may not have complied with a government discovery request properly? Or would the money be better spent using it for educating lawyers and others of how to respond to government inquiries correctly. And what happens if we turn the tables – should we start prosecuting Assistant United States Attorneys who do not comply with constitutional requirements of discovery, or would our resources be better spent educating them of the importance of upholding these constitutional rights.
Bottom line – don't refile this case.
(esp)
Addendum – See here
-
In a case pending and set for trial in March in the Central District of California, with allegations of FCPA and money laundering violations, DOJ prosecutors are seeking to start another grand jury investigation of the defendants. Lawyers for the defendants cried foul and moved to quash five subpoenas calling for testimony today. As a result, the federal judge presiding over the case imposed stringent conditions on any use of the grand jury by DOJ prosecutors.
A grand jury is not to be used for "strengthening [a] case on a pending indictment or as a substitute for discovery." (Beasley, Simels, Arthur Andersen). Prosecutors claimed that their purpose in questioning these witnesses, all current employees of the company under indictment, was for a "new" investigation. Interestingly, the filings show that this "new" grand jury investigation came immediately after DOJ prosecutors were denied access to the employees for pre-trial, witness preparation interviews.
Defense lawyers Jan Handzlik and Janet Levine also argued that the DOJ prosecutors were "manufacturing" a new investigation to create reasons to postpone the trial, set for March 29th. They suspected the government would seek a superseding indictment leading to a trial continuance. Prosecutors disagreed and filed an under seal, in camera declaration to justify the new investigation.
US District Judge Howard Matz denied the defense motion to quash the grand jury subpoenas, but issued an order that handed the DOJ prosecutors what some of us consider to be a stinging defeat. He placed conditions on what the government could do if it chose to proceed with its "new" investigation, stating in part:
(1) At the upcoming trial, the Government may not proffer or refer to any newly obtained evidence derived from the testimony of any witness before any grand jury session conducted after the return of the First Superseding Indictment on October 21, 2010. . . .
(2) The Government may not, and shall not, question any witness about any business and financial relationship that the [defendant ] Company had with [other individuals and entities named in the pending indictment]
(3) The Government may not, and shall not, question any witness about any of the other events that directly form the basis for the charges contained in the first superseding indictment.
(4) The Government shall file under seal a transcript or transcripts of the grand jury testimony it obtains from the aforementioned witnesses, and it shall do so by not later than one week before the start of trial, and
(5) The Government may not point to or rely on whatever evidence it obtains at the upcoming grand jury sessions to seek or obtain a continuance of the trial date.
Defense counsel in this case are Jan L. Handzlik (Greenberg Traurig LLP) and Janet I. Levine (Crowell Moring).
See Court's Order – Download Matz min order re GJ
See also Richard Cassin, FCPA Blog, Sparks Fly Before LA Trial
(esp)
-
At the end of this past year, the Statewide Grand Jury in Florida issued its first Interim Report – Statewide Grand Jury Makes Anti-Corruption Recommendations in First Interim Report. (Report is here) According to the press release issued at that time –
"Key recommendations of the Statewide Grand Jury include:
– Expanding the definition of public employees to include private employees contracted by government entities that perform government services;
– Creating sentencing enhancements for offenses committed by officials who use their public position to facilitate their crimes;
– Creating an independent State Office of Inspector General, responsible for hiring and firing agency Inspectors General;
– Expanding definition of criminal bid tampering to include bid-rigging schemes; and
– Authorizing the Ethics Commission to initiate investigations with a supermajority vote of commission members."This report comes at an interesting time, as the American Law Institute is gearing up for a new project called Principles of Government Ethics.
(esp)
-
I had a fun time commenting about grand jury reform yesterday at the Overcriminalization 2.0 Conference in Washington, DC–our nation's capital.
Here are three of my ideas for improving the federal grand jury's fairness. No doubt others have thought of these improvements as well.
1. All fraternization between prosecutors and grand jurors should be strictly forbidden. Federal grand jury proceedings are supposed to be on the record. But this policy can be circumvented by informal conversations between grand jurors and prosecutors, before grand jury begins or during breaks. Even if testimony is not conveyed through such informal discussions, friendship and camaraderie can develop, particularly over the long haul of a white collar investigation. This makes it far more likely that the grand jurors will bend to the prosecutor's will and resolve all doubts and issues in his/her favor. My suggestion is that the grand jurors be treated more like petit jurors, in terms of the informal contact that prosecutors are allowed to have with them. In addition to promoting fairness, such a reform should impress upon the grand jurors the seriousness and sanctity of their work.
2. All summarizing of prior evidence and testimony by the prosecution should be strictly prohibited. Federal prosecutors are not allowed to "deliberate" with the grand jury. That means they can't sit in with the grand jurors and try to sway their votes. The prohibition applies whether or not the grand jury is engaged in deliberations just prior to voting. What sometimes happens over the 18 month course of a white collar grand jury investigation is that jurors ask questions about the credibility of witnesses and the content of prior evidence and testimony. The prosecutor cannot comment upon the credibiltiy of witnesses, but can summarize prior evidence and testimony. Suppose a grand juror says, "I just don't believe this last witness, Mr. Smith. Isn't what he said inconsistent with what Mrs. Jones said?" Under current rules, the prosecutor may respond as follows. "I cannot comment upon Mr. Smith's credibility, because I cannot deliberate with you. But I am allowed to summarize prior testimony. What I can tell you is that Mr. Smith's testimony is inconsistent with Mrs. Jones' testimony and with the testimony of every other witness we have heard from, including seven of your fellow citizens and five FBI Special Agents." The ability to summarize thus inherently lends itself to potential abuse. This potential should be eliminated, and the prosecutor should be confined to telling grand jurors that they can ask to examine evidence or have prior testimony read back to them by an agent.
3. The case agent should be required to inform federal grand jurors under oath of all exculpatory information that the government is aware of. DOJ already encourages prosecutors to disclose exculpatory evidence to the grand jury and some jurisdictions require it as an ethical matter. I suggest here something further. The case agent should be required to reveal to the federal grand jurors under oath, in every case, all exculpatory information in the government's possession or that the government is aware of. This will facilitate the delivery of relevant information to the grand jurors, by forcing the prosecutor and case agent to focus on the question of exculpatory information. What could be more relevant to a grand jury's charging decision than information inconsitent with guilt? Isn't this the fair thing to do?
These three suggested reforms have at least three things in common: 1) they will improve the fairness of the grand jury process; 2) they pose no risk of physical harm or danger to any government witness or employee; and 3) they impose no significant time or cost burdens on the government.
(slw)
-
Guest Blogger – Dan Cogdell
As the Justice Department prepares a grand jury investigation of possible crimes involved in the BP oil spill, ex-CEO Tony Hayward is looking smarter for leaving this country for reasons beyond his lack of popularity.
Multiple indictments are likely to be sought, charges could reach well up the corporate ladder and British citizens who are not in this country when indicted might have protection from “double criminality,” which prevents extradition unless the same action is a criminal offense in both countries. It’s very possible the Justice Department will stretch the envelope and that could put their use of U.S. laws in a place not covered by European Union law.
There is no question the federal government is taking dead aim at environmental crimes in the BP oil spill or that the legal artillery is formidable. Federal prosecutors were already ramping up their environmental crime filings before the Deepwater Horizon started spewing oil into the gulf. Now, with massive public pressure, this could be the environmental version of the Enron prosecutions.
This week (8/23-8/27) the U.S. Coast Guard and the Interior Department are holding hearings in Houston to further investigate the BP disaster. Witnesses who invoke the Fifth Amendment may not look like team players, but they will be taking the smartest path.
Expect prosecutors to take fullest advantage of the powerful and far-reaching tools they have available. Expect them to issue more than just wrist slaps and corporate fines out of the Refuse Act, the Migratory Bird Treaty Act and the Clean Water Act. Expect them to seek jail time. There is a lot going in their favor.
Prosecutors will most assuredly rely on the “Responsible Corporate Officer Doctrine,” which allows Clean Water Act violations to be directed at even top corporate officers. Prosecutions under this theory have resulted in convictions of people who were not even at work sites and, in one case, not even working for a company but had “honorary power.” (See United States v. Hanousek, 176 F. 3rd 1116 (9th Cir. 1999), cert. denied, 528 U.S. 1102 (2000), and United States v Brittain, 931 F2d 1413 (10th Cir. 1991)) The “Responsible Corporate Officer Doctrine” may be the prosecutor’s ticket to tag BP’s hierarchical elite while soothing the related political nightmare currently facing the U.S. government.
In a Clean Water Act misdemeanor case, the government does not have to prove that anyone intentionally caused this enormous harm. Negligence is a comfortably lower bar for these prosecutors. And this isn’t BP’s first rodeo. A company culture that prosecutors contend encourages money-saving over safety has landed BP in the government’s sights time and time again, and will only bolster the prosecutor Howard Stewart’s efforts.
Whether BP employees or contractors believe they are targets or not, they must balance the idea of seeing justice done with protecting themselves and their employer. Taking the Fifth at this point may be the least popular but most prudent move.
Dan Cogdell is a Houston-based criminal defense attorney with Cogdell & Ardoin who has represented numerous clients in environmental and white-collar criminal cases.
(DC)
MattBray.net 