Surprise, surprise, surprise. According to Joe Palazzolo at WSJ's Law Blog, DOJ's Office of Professional Responsibility has cleared Brenda Morris of any wrongdoing whatsoever in the Ted Stevens case. The story is here.
Category: Obstruction
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Here is William Roger Clemens' Reply Memorandum supporting his Motion to Prohibit Retrial and Dismiss the Indictment, which was filed on Friday. Like the original defense Motion and the Government's Response, it is well written. I was surprised, however, by the defense's failure to spend more time on a particularly disingenous aspect of the Government's Response, relating to the prosecution's violation of a court order during opening argument. I'll have some commentary on this issue in a few days.
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Corporate Counsel's Sue Reisinger reports here that Rod Rosenstein, the universally respected U.S. Attorney for the District of Maryland, refused to sign his name on either Lauren Stevens indictment, because he did not believe that the evidence was sufficient to support a conviction. The case was prosecuted by District of Massachusetts AUSAs, but venue was found in Maryland. The typical practice is for the U.S. Attorney in the district of prosecution to sign all indictments issued by the grand juries in his/her district, or at least to have his/her signature block signed by an AUSA. This did not happen in the Stevens case. Rosenstein, a former colleague of mine, is the quintessence of straight-arrowhood. His failure, literally, to sign-off on the Stevens charges surely sent an important signal to Judge Roger Titus, who threw the case out under Rule 29. Let me give you an idea of how well respected this Jimmy Stewart, Boy Scout, is. Rosenstein, the Republican appointee in an overwhelmingly Democratic state with two Democratic U.S. Senators, has yet to be replaced, even though a Democrat has held the White House for 2 and one-half years. The story of the Stevens prosecution gets curiouser and curiouser.
(wisenberg)
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Sue Reisinger at Corporate Counsel has this fascinating piece titled, Why Didn't the Maryland U.S. Attorney Sign the Lauren Stevens Indictment? But there are some additional questions that need answers. Why if a top US Attorney is not willing to sign the Indictment did senior officials at DOJ's criminal division not intercede? And if they did re-examine the case, did they authorize proceeding with this case? (For background on the dismissal of this case by the judge, see here).
There is something to be said about an indictment coming from the district bringing the charges - it's an aspect of venue. Prosecutors from that district get to look at the case in comparison to other matters being prosecuted in that district, in order to determine if this merits expending funds for a prosecution. Having outsiders brought in to consider a prosecution may be warranted, especially when the prosecutor has a conflict. But in any event, someone at the top needs to examine whether the prosecution is warranted.
(esp)
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Here is yesterday's opinion from the D.C.Circuit in United States v. David Safavian. The former Jack Abramoff friend and colleague was convicted upon retrial, after the appellate court threw out the original convictions on various grounds. The primary contention in the latest appeal was vindictive prosecution, as new charges were added after the remand. The Court held that the trial court did not abuse its discretion in finding that the government added the new charges to counter Safavian's literal truth defense. Safavian's alleged felonious conduct was incredibly petty and minor in nature. The prosecution was a tremendous waste of government resources.
(wisenberg)
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Here is a case of infinitely greater importance than the Rajaratnam insider trading farce, but one that is largely getting the silent treatment from our financial press. I haven't seen a real news story on the Lauren Stevens trial since the first day of trial. This is pathetic. One of the most thoughtful blogosphere commentaries comes here from my friend David Douglas at Shook, Hardy & Bacon. David says that the prosecution represents a "gotcha" game, because the government did not set out clear markers regarding what it would and would not tolerate from in-house counsel responding to FDA document requests.
But that is clearly not the story told by the United States in the charging instrument. The Indictment quotes a 10-29-02 letter from Stevens to the FDA in which she confirms an earlier pledge of GSK's best efforts to obtain and provide "materials and documents presented at GSK-sponsored promotional programs, even if not created by, or under the custody or control of GSK." (That sounds like a pretty clear marker to me.) Stevens then allegedly told the FDA that GSK's production was complete, although she had failed to produce numerous presentation slides containing "incriminating evidence of potential off-label promotion by GSK."
According to one of the defense's responsive pleadings, Stevens and her team, "reached a consensus decision not to produce the presentations immediately, but instead to seek a meeting with the FDA at which GSK would discuss the presentations." Ms. Stevens tried several times to set up such a meeting, but the FDA did not respond positiviely, "and the anticipated meeting never occurred." That isn't exactly a compelling defense.
My friend, DC criminal defense attorney Eugene Gorokhov, of Burnham & Gorokhov, attended the first day of testimony. Eugene's eyewitness account follows:
"The Stevens trial seems to be off to an interesting start. We missed openings but saw the government's first witness. He was a reviewer for the FDA and was the person chiefly responsible for communication with GSK and Ms. Stevens in particular. The first part of his testimony focused on the basic rules – what is a package insert, indicated use, etc., and legality of off-label prescribing versus illegal off-label promotion. He testified on direct that [the FDA] initially started to send inquiries to GSK based on an anonymous complaint by a doctor regarding off-label promotion at GSK-sponsored events. The government had him read at length from correspondence between the FDA and GSK (authored by Stevens). The point seemed to be to establish that GSK clearly sought wide-ranging materials on any and all off-label promotion, and that Stevens was therefore clearly on notice of what was expected and did not provide complete or truthful responses. The prosecutor repeatedly asked whether this or that statement by Stevens could have influenced the FDA.But on cross, the defense showed some of the non-sensical aspects of the prohibition on off-label promotion. For example, if a paid speaker discusses a drug for 5 minutes and then is asked unsolicited questions the rest of the time about off-label use, it is perfectly legal. It is also legal in any setting other than promotion, ie, academia, discussions with other physicians, etc. In any of the above settings the speaker could use the same words regarding off-label use, and it is not criminalized. On the other hand, if there is a groundbreaking discovery regarding off-label use the paid speaker must keep that a secret at any promotional event. The defense attacked the government's assertion that the documents sought concerned all off-label use, as opposed to just use for weight loss. The defense confronted the government witness not only with multiple statements from GSK's correspondence with the FDA that reflected this understanding, but also the statement of the witness in a letter to the DOJ that specified off-label use for weight loss and made no mention of other uses.Finally, the government witness admitted that all of GSK's [advertising] promotional materials were in the FDA's files before they sent any document requests, and and that the FDA never previously took issue with any of these materials. However, the FDA witness indicated that he did not remember reviewing any of these promotional materials before sending the document requests to GSK."(wisenberg) -
The Third Circuit recently ruled in a closely watched case, on the issue of whether corporate counsel had in fact represented an individual within the corporation and as such the attorney-client privilege should apply. (see here) The unpublished opinion of the court found no error on the part of the district court. Counsel for Appellant Norris has now filed for a rehearing en banc. Three issues are presented in this Petition:
"I. The Panel Decision Squarely Conflicts With Shramm, Arthur Andersen, and Aguilar as to the Requisite Specific Intent for a Conspiracy to Obstruct a Grand Jury Proceeding;
II.The Panel Decision Squarely Conflicts with Farrell's Holding that 'Corrupt Persuasion' Does Not Include Persuading an Alleged Co-Conspirator to Withhold Incriminating Information;
III. The Panel Decision Misapplied Bevill to Permit the Evisceration of a Corporate Officer's Personal Attorney-Client Privilege."
Petition for Rehearing En Banc – Download 2011-04-06 Petition for Rehearing En Banc
(esp)
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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
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In a closely watched case (see here), the Third Circuit was asked to consider whether corporate counsel had in fact represented an individual within the corporation and as such the attorney-client privilege should apply. Defendant had argued that the Bevill standard should not "apply here, as here, both the individual and the corporation have an express attorney-client relationship with counsel." Reply Brief of Ian P. Norris – Download 2011-02-25 Norris Reply Brief.
The Third Circuit issued an unpublished opinion that resolves this issue in a paragraph, stating in part that:
"[t]he District Court in this case held an evidentiary hearing and ultimately determined that Norris failed to meet his burden in asserting his privilege pursuant to the five-factor test set forth in In the Matter of Bevill, Bresler & Schulman Asset Management Corp., 805 F.2d 120, 123 (3rd 1986). The District Court did not legally err in applying this test, and we see no clear error in the District Court's holding based on the facts elicited in the evidentiary hearing."
To all the corporate executives that are cooperating with corporate counsel thinking that the individual is representing them – beware….
Opinion- Download Opinion
(esp)
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The government has unsealed the Hughie Elbert Stover Indictment in the Southern District of West Virginia. Stover is charged with one count of 18 U.S.C.Section 1001 false statements and one count of 18 U.S.C. Section 1519 concealment, mutilation, and destruction of records and documents. This is the first indictment coming out of the government's investigation of the 2010 Upper Big Branch Mine explosion in Montcoal, West Virginia. The charges do not appear to be directly related to the explosion itself, which may account for the relative restraint of the well-crafted speaking indictment and DOJ's Press Release on Hughie Stover. Stover, head of security for Massey subsidiary Performance Coal Company, Inc., is accused of lying to federal investigators by stating that: 1) Performance security guards were forbidden to give advance warning of Mine Safety and Health Administration ("MSHA") Inspectors' presence at the mine; and 2) he would fire any guard who gave such advance notice. According to the indictment, Stover actually devised the system under which advance notice of MSHA Inspectors' presence was quickly relayed through the mine via a mine communications channel. Stover is also accused of directing an employee to destroy records of the warning system. Section 1519 was enacted as part of Sarbanes-Oxley. The indictment nowhere mentions Massey Energy or the explosion itself. The press release does, including quotes from U.S. Attorney Booth Goodwin and Assistant Attorney General Lanny Breuer. Therefore, the press release clearly goes beyond what is in the indictment. I am generally not a fan of broad speaking indictments or lengthy press releases that announce indictments. But here, as mentioned, the indictment, although speaking, is restrained and well-crafted. The purpose of the relatively brief press release is to send a message that any obstruction of an important ongoing investigation will be swiftly and ruthlessly punished. In this regard, it is important to note that both the alleged false statements and the alleged records destruction occurred in January of this year. To me, this is one of the very few valid reasons for any kind of an extended press release announcing an indictment–that is, to send a message that obstruction of a major ongoing investigation will not be tolerated and that those who engage in it will pay a price. Press reports indicate that Stover was arrested at his home. This was unfortunate and unfair. Stover is innocent until proven guilty and, as Stover's Conditions of Pretrial Release indicate, nobody considers him a flight risk or danger to the community. He was released on an unsecured $10,000.00 bond.
(wisenberg)
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