Dante’s Guide: Preparing the Grand Jury Witness

Dante Alighieri
(c. 1265–c. 1321)

Finally, one gets to quote Dante while talking about grand jury witnesses:

In the year 1300, at age 35, the narrator of Dante’s Inferno famously finds himself in trouble:

Midway in our life’s journey, I went astray

from the straight road and woke to find myself

alone in a dark wood.  How shall I say

what wood that was!  I never saw so drear,

so rank, so arduous a wilderness!

Its very memory gives a shape to fear.

The grand jury witness finds himself or herself in a position not unlike that of the Italian poet at the beginning of his trek through the Divine Comedy.  The federal grand jury is one of the most powerful, secret and peculiar institutions in American law and culture.  It is certainly the most one-sided and the one that most lay persons find runs counter to their civics-class understanding of American governance.

In the poem, Dante has a guide through hell:  the Roman poet Virgil.  When Dante asks to be saved from the first of three beasts with which he is confronted, Virgil does not spare Dante’s sensibilities:

And he replied, seeing my soul in tears

“He must go by another way who would escape

this wilderness, for that mad beast that fleers

before you there, suffers no man to pass.

She tracks down all, kills all, and knows no glut,

but, feeding, she grows hungrier than she was.”

As lawyers for grand jury witnesses, we must do as Virgil does, and first off remind our client that, like the She-Wolf, the grand jury “tracks down all, kills all, and knows no glut.”

Plus, “fleers” is a great word.

Nice chair. Hot seat.

All this from a chapter I wrote — Dante’s Guide: Preparing the Grand Jury Witness — in a book just published by the ABA.

From the ABA Bookstore blurb:

The witness is the star of any trial. All other evidence—exhibits, demonstrative evidence, the facts—come to life through the witness. In every successful trial there was at least one witness who told a story, held the jury’s attention, withstood cross-examination, and helped win a verdict. In every loss there is usually a witness who crashes and burns. How do you explain the difference?

Preparation.

For all but the experienced expert witness, testifying is an alien experience and the courtroom is a strange and forbidding place. The witness needs help, and it’s the lawyer’s job to provide it. The authors of this book have prepared, examined, and cross-examined thousands of witnesses over the course of their successful careers as trial lawyers. They have seen first-hand what works and what does not—on the witness stand and in pre-trial preparation and practice sessions. Their hard-won lessons, lessons learned in the trenches of trial practice, are contained here.

This is the second in a series of books published by the ABA under the title “From the Trenches.” This second volume, “Mastering the Art of Witness Preparation,” contains 12 chapters covering all aspects of witness preparation. Whether you are a first-time, second-chair associate or a veteran first-chair partner preparing for your 100th jury trial, this book will provide guidance, thoughtful insights, and unique perspectives on preparing your witness to testify.

Here’s where you can get the book: Mastering the Art of Preparing Witnesses

(The book has some outstanding trial lawyers as contributors, including Jim MillerMike O’Donnell, Scott O’Connell, Jessie Zeigler,  Sawnie McEntire, and Jerry Glas.)

We have addressed grand jury matters before here

Representing Witnesses Before The Grand Jury

and here

Of Grand Juries and Ham Sandwiches

Anatomy of a Murder (1959)

It’s not grand jury witness prep, but here’s the first few minutes of Anatomy of A Murder:

Plus, Duke Ellington did the score:

 

 


Congressional Investigations, Criminal Cases and The Knights Who Say “Ni!”

We are heading into what appears to be a summer of investigations along the Potomac, some of them in the House and Senate.  What are some of the things we might reasonably expect to see as investigations congressional and criminal cross paths?  And what does Monty Python have to do with it?

Previously, I shared a few lessons about congressional investigations.

First, the short-version video:

Jack Sharman – Learning in Congress from Legal Filmworks Unlimited on Vimeo.

Second, a longer how-to approach for lawyers and clients in a congressional investigation:

Lessons From An Ex-Congressional Lawyer

In particular:

We are in the summer months.  We have written before about  summer hearings:

As a former oversight-and-investigations lawyer for a House committee, I can testify: summer is the high season for O&I hearings.  Nothing is going on legislatively, O&I hearings don’t require lobbyists or constituents, it is hot as hell but most House and Senate hearing rooms have good air-conditioning these days and, if you get some hearings under your belt in June and July, you’ll have plenty as a Member to talk about in your district or state.

Because most people are familiar with Congressional investigations only through television, they assume that if they are caught up in an investigation they will be summoned to testify before a committee like John Dean or Oliver North, with cameras clicking amid vigorous partisan drama.  Although your client may indeed be called to testify in a public hearing — and you should prepare as though your client will be called — it is more likely that constraints of time, the demands of the media, and political pressure and compromise having little to do with your client will result in your client never being called.  If your client testifies, remember that in many instances the committee members’ “questions” are not actually designed to elicit information from the witness.  Rather, questioning is often more like speech-making designed to maximize camera time on the questioner or to score political points against the opposition.

These  lessons were reinforced in my latest job in this arena: Special Counsel to the Alabama House Judiciary Committee for the impeachment investigation of Governor Robert Bentley.

Talk of President Trump and impeachment seems to have subsided for the moment with the appointment of former FBI Director Robert Mueller as a Special Counsel to investigate potential links between the Russian government and the Trump campaign.

What are some points to keep in mind as these investigations — congressional and criminal — move down their parallel tracks?

Jacket and tie, please.

The Grand Jury Is Grand. The criminal investigators will largely call the shots.  How so?

There are two reasons that there will likely be increased negotiation and tension between Congress and the Special Counsel.

Telling Tales. The first reason is one common to all federal criminal investigations: no prosecutor wants his or her witnesses making statements, especially public statements under oath. Sworn statements lock the witness into a story and can be used by defense counsel for cross examination in a potential criminal trial.

Federal Knights Who Say “Ni!” The second reason is that, much like the terrifying “Knights Who Say ‘Ni!'” in the 1975 film Monty Python and The Holy Grail who look down upon the coconut-slapping Knights of the Round Table, federal prosecutors do not usually hold congressional investigators in high esteem although they convey that view with varying degrees of politeness.  (Of course, I have expressed a differing view, sometimes with varying degrees of politeness). I learned this lesson both from my Whitewater time as Special Counsel to the House Financial Services Committee for the investigation of President and Mrs. Clinton’s dealings with Madison Guaranty and also from the recent impeachment investigation of Alabama Governor Robert Bentley.

INCENTIVE NOTE: If you make it to the end of this post, there is a “Knights Who Say ‘Ni!'” clip.

This clash between prosecutors and congressional investigators should not be too surprising. Congressional investigations and grand jury investigations serve different institutional and constitutional mandates. From time to time, there will be some tension.

Paging through for immunity.

Immunity? Congress could bugger up the criminal investigation by granting General Michael Flynn (or other witnesses) immunity in exchange for their testimony.  As noted by Philip Shenon in Politico, after the Iran-Contra prosecutions of Colonel North and Admiral Poindexter, that is unlikely to happen:

The special prosecutor was convinced that Congress was on the verge of sabotaging his politically charged investigation—one that led straight into the White House and threatened to end with a president’s impeachment. And so he went to lawmakers on Capitol Hill with a plea: Do not grant immunity to witnesses in exchange for their testimony if you ever want anyone brought to justice.

But the plea failed. And the special prosecutor, Lawrence Walsh, a former federal judge appointed in 1986 to investigate the Iran-contra affair during the Reagan administration, watched two of his highest-profile targets go free: former National Security Adviser John M. Poindexter and Poindexter’s deputy, Lieutenant Colonel Oliver North. Although both former Ronald Reagan aides were later convicted at trial of multiple felonies, the convictions were overturned, with appeals courts deeming the prosecutions tainted as a result of the testimony the men had given to Congress with grants of supposedly limited immunity.

Read the full article: How Congress Could Cripple Robert Mueller.

As a reminder: a grant of congressional immunity raises a potential “Kastigar” problem for a criminal prosecutor.  As the United States Court of Appeals for the District of Columbia Circuit said in United States v. North:

Because the privilege against self-incrimination “reflects many of our fundamental values and most noble aspirations,” Murphy v. Waterfront Comm’n, 378 U.S. 52, 55, 84 S. Ct. 1594, 1596, 12 L. Ed. 2d 678 (1964), and because it is “the essential mainstay of our adversary system,” the Constitution requires “that the government seeking to punish an individual produce the evidence against him by its own independent labors, rather than by the cruel, simple expedient of compelling it from his own mouth.” Miranda v. Arizona, 384 U.S. 436, 460, 86 S. Ct. 1602, 1620, 16 L. Ed. 2d 694 (1966).

The prohibition against compelled testimony is not absolute, however. Under the rule of Kastigar v. United States, 406 U.S. 441, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972), a grant of use immunity under 18 U.S.C. § 60021  enables the government to compel a witness’s self-incriminating testimony. This is so because the statute prohibits the government both from using the immunized testimony itself and also from using any evidence derived directly or indirectly therefrom. Stated conversely, use immunity conferred under the statute is “coextensive with the scope of the privilege against self-incrimination, and therefore is sufficient to compel testimony over a claim of the privilege…. [Use immunity] prohibits the prosecutorial authorities from using the compelled testimony in any respect….” Kastigar, 406 U.S. at 453, 92 S. Ct. at 1661 (emphasis in original). See also Braswell v. United States, 487 U.S. 99, 108 S. Ct. 2284, 2295, 101 L. Ed. 2d 98 (1988) (“Testimony obtained pursuant to a grant of statutory use immunity may be used neither directly nor derivatively.”).

When the government proceeds to prosecute a previously immunized witness, it has “the heavy burden of proving that all of the evidence it proposes to use was derived from legitimate independent sources.” Kastigar, 406 U.S. at 461-62, 92 S. Ct. at 1665. The Court characterized the government’s affirmative burden as “heavy.” Most courts following Kastigar have imposed a “preponderance of the evidence” evidentiary burden on the government. See White Collar Crime: Fifth Survey of Law-Immunity, 26 Am.Crim.L.Rev. 1169, 1179 & n. 62 (1989) (hereafter “Immunity”). The Court analogized the statutory restrictions on use immunity to restrictions on the use of coerced confessions, which are inadmissible as evidence but which do not prohibit prosecution. Kastigar, 406 U.S. at 461, 92 S. Ct. at 1665. The Court pointed out, however, that the “use immunity” defendant may “be in a stronger position at trial” than the “coerced confession” defendant because of the different allocations of burden of proof. Id.

Committee assignment?

Constitutional Theater. Congressional investigations, in part, are political theater.  That’s okay.  As we have noted elsewhere:

The fact that there appear to be no rules in a congressional investigation underscores perhaps the primary fact that counsel should bear in mind: the committee’s investigation takes place in a political environment, not a litigation environment.  Although the investigatory process appears legalistic, it always unfolds in a political environment in which the actors have political goals that may or may not have anything to do with your client.

Because most people are familiar with Congressional investigations only through television, they assume that if they are caught up in an investigation they will be summoned to testify before a committee like John Dean or Oliver North, with cameras clicking amid vigorous partisan drama.  Although your client may indeed be called to testify in a public hearing — and you should prepare as though your client will be called — it is more likely that constraints of time, the demands of the media, and political pressure and compromise having little to do with your client will result in your client never being called.  If your client testifies, remember that in many instances the committee members’ “questions” are not actually designed to elicit information from the witness.  Rather, questioning is often more like speech-making designed to maximize camera time on the questioner or to score political points against the opposition.

When a congressional committee issues a subpoena, for example, it may (and will) do so with the knowledge and expectation that the recipient may not make even a good-faith attempt at compliance.  With regard to recent subpoenas sent to intelligence agencies by the House Intelligence Committee, for example:

Where NSA had previously complied with the House panel’s investigators, sources said that cooperation had ground to a complete halt, and that the other agencies – FBI and CIA – had never substantively cooperated with document requests at all.

Read the story by James Rosen: House Intelligence Committee sends subpoenas to intel agencies

Come to order?

Enforcing subpoena compliance is a legally and politically difficult maneuver for a congressional committee, especially where it seeks enforcement against the executive branch.  Customarily, the subpoena issues, then a bit of Kabuki theater ensues, and an agreement is reached, as in the case of General Flynn.  Although there are multiple reason why General Flynn . . .

5 Possible Reasons Why Michael Flynn Is Now Turning Over Documents

. . .  . may have decided to comply with the document subpoena from the Senate Intelligence Committee, one possible explanation is that his lawyer simply reached an agreement about the scope of responsive documents that was tolerable.

As a necessary aside, I object to the ATL description of the D.C. Circuit’s North opinion as a “three decade old precedent from a split panel [that] rested on a mushy determination that North’s congressional testimony ‘tainted’ the criminal prosecution.”  As Judge David Sentelle’s judicial clerk at the time, I reiterate the court’s observation:

The fact that a sizable number of grand jury witnesses, trial witnesses, and their aides apparently immersed themselves in North’s immunized testimony leads us to doubt whether what is in question here is simply “stimulation” of memory by “a bit” of compelled testimony. Whether the government’s use of compelled testimony occurs in the natural course of events or results from an unprecedented aberration is irrelevant to a citizen’s Fifth Amendment right. Kastigar does not prohibit simply “a whole lot of use,” or “excessive use,” or “primary use” of compelled testimony. It prohibits “any use,” direct or indirect. From a prosecutor’s standpoint, an unhappy byproduct of the Fifth Amendment is that Kastigar may very well require a trial within a trial (or a trial before, during, or after the trial) if such a proceeding is necessary for the court to determine whether or not the government has in any fashion used compelled testimony to indict or convict a defendant.

We readily understand how court and counsel might sigh prior to such an undertaking. Such a Kastigar proceeding could consume substantial amounts of time, personnel, and money, only to lead to the conclusion that a defendant–perhaps a guilty defendant–cannot be prosecuted. Yet the very purpose of the Fifth Amendment under these circumstances is to prevent the prosecutor from transmogrifying into the inquisitor, complete with that officer’s most pernicious tool–the power of the state to force a person to incriminate himself. As between the clear constitutional command and the convenience of the government, our duty is to enforce the former and discount the latter.

Read the entire North opinion here.

Open invitation.

Congressional subpoenas (such as the one to the right) are not the only examples of tension in legislative investigation.  In the impeachment investigation of Alabama Governor Robert Bentley, the issue of legislative authority to enforce subpoenas against the executive branch was front and center, as set out in the Special Counsel’s report:

The Committee Has Subpoena Power.

The Committee has inherent, constitutional authority to issue subpoenas pursuant to its investigative powers.  The investigative power of the legislature and, by extension, legislative committees, have been further derived from its broad legislative power.  This precedent, though it does not directly discuss legislative subpoenas, clarifies the broad powers enjoyed by the Alabama Legislature while showing great deference to the Legislature’s enactments.  Further, an extensive list of other states that have addressed the issue of legislative subpoenas has unanimously endorsed such an ability, with no court finding that its state’s legislature lacks this power.   

This Committee has broad power to investigate.

“The Legislature is laden with a broad form of governmental power which is plenary in character, and subject only to those express limitations appearing in the Constitution.”[1]  This authority is “absolute or exclusive.”[2] The Legislature’s plenary power is not, as has been suggested by Governor Bentley throughout this investigation, derived from either the State or Federal constitutions; to the contrary, these documents serve as the only limitations upon the Legislature’s power.[3] “Apart from limitations imposed by these fundamental charters of government, the power of the [Alabama] Legislature has no bounds and is as plenary as that of the British Parliament.”[4]

Inherent in the power to legislate is the power to investigate.  In McGrain v. Daugherty, the United States Supreme Court held that  “[t]he power to legislate carries with it by necessary implication ample authority to obtain information needed in the rightful exercise of that power, and to employ compulsory process for that purpose.”[5]  Relying on this precedent, the Alabama Supreme Court also has held that “the power to legislate necessarily presupposes necessity for investigation by members of each House.”[6]  This “inquiry power” is sweepingly broad.[7] It encompasses not only the authority to investigate into the propriety of existing and proposed laws but also into the departments of the government “to expose corruption, inefficiency or waste.”[8] Indeed, the United States Supreme Court has recognized that “Congress’s investigative power is at its peak when the subject is alleged waste, fraud, abuse, or maladministration within a government department.”[9]  States, too, have recognized that the legislature “is acting at the height of its powers” during an impeachment process.[10]  So long as it is “related to, and in furtherance of, a legitimate task” of the legislature, the inquiry falls within the permissible bounds of legislative investigation.[11] 

The federal constitution does not give Congress subpoena power, but the United States Supreme Court has repeatedly held that the power to obtain information through compulsion has long been treated as “an attribute of the power to legislate.”[12]  “[W]here the legislative body does not itself possess the requisite information—which not infrequently is true—recourse must be had to others who do possess it.”[13] And while “[i]t is unquestionably the duty of all citizens to cooperate with Congress in its efforts to obtain the facts needed for intelligent legislative action,”[14] “[e]xperience has taught that mere requests for such information often are unavailing, and also that information which is volunteered is not always accurate or complete; so some means of compulsion are essential to obtain what is needed.”[15]  Thus, a necessary component of the power of investigation is a process to enforce it.[16]

Like the federal courts, the majority of state courts “quite generally have held that the power to legislate carries with it by necessary implication ample authority to obtain information needed in the rightful exercise of that power, and to employ compulsory process for that purpose.”[17]  Relying on McGrain and general notions of the plenary authority of the legislature, courts across the country have upheld the constitutionality of legislative subpoenas as inherent in the broad legislative authority afforded to state legislatures.[18]

[1] Ex parte Alabama Senate, 466 So. 2d 914, 917 (Ala. 1985) (quoting Hart v. deGraffenried, 388 So. 2d 1196, 1197 (Ala. 1980)) (emphasis in Ex parte Alabama Senate).

[2] Id. at 918.

[3] In re Opinion of the Justices No. 71, 29 So. 2d 10, 12 (Ala. 1947).

[4] Id.  (citing Alabama State Federation of Labor v. McAdory, 18 So.2d 810 (Ala. 1944)).

[5] McGrain v. Daugherty, 273 U.S. 135, 165 (1927); see also Mason’s § 795(5) at 562 (the legislature has “the power in proper cases to compel the attendance of witnesses and the production of books and papers by means of legal process”).

[6] See In re Opinion of the Justices No. 71, 29 So. 2d at 13 (citing McGrain, 273 U.S. 135); see also Mason’s § 795(2) at 561 (“The legislature has the power to investigate any subject regarding which it may desire information in connection with the proper discharge of its function . . . to perform any other act delegated to it by the constitution.”).

[7] See Watkins v. United States, 354 U.S. 178, 187 (1957) (“The power of the Congress to conduct investigation is inherent in the legislative process.  That power is broad.”).

[8] See id.

[9] Todd Garvey, Congress’s Contempt Power and The Enforcement of Congressional Subpoenas: A Sketch, Congressional Research Service, April 10, 2014, at 3 (citing Watkins, 354 U.S. at 187). 

[10] Office of Governor v. Select Comm. of Inquiry, 858 A.2d 709, 738 (Conn. 2004). 

[11] See Watkins, 354 U.S. at 187.

[12] McGrain, 273 U.S.  at 161; see also, e.g., Eastland v. U.S. Servicemen’s Fund, 421 U.S. 491, 504 (1975).

[13] McGrain, 273 U.S. at 175.

[14] Watkins, 354 U.S. at 187.

[15] McGrain, 273 U.S. at 174.

[16] See id. (“The power of inquiry—with process to enforce it—is an essential and appropriate auxiliary to the legislative function.”); Eastland, 421 U.S. at 491 (“[I]ssuance of subpoenas . . . has long been held to be a legitimate use by Congress of its power to investigate.”).

[17] See McGrain, 273 U.S. at 165.

[18] See, e.g., Conn. Indem. Co. v. Superior Court, 3 P. 3d 868 (Cal. 2000); Garner v. Cherberg, 765 P. 2d 1284 (Wash. 1988); In re Shain, 457 A. 2d 828 (N.J. 1982); Commonwealth ex rel. Caraci v. Brandamore, 327 A. 2d 1 (Pa. 1974); Maine Sugar Industries, Inc. v. Maine Industrial Bldg. Authority, 264 A. 2d 1 (Maine 1970); Chesek v. Jones, 959 A. 2d 795 (Md. 2008); Sheridan v. Gardner, 196 N.E. 2d 303 (Mass. 1964); Gibson v. Florida Legislative Investigation Committee, 108 So. 2d 729, 736 (Fla. 1958); State ex rel. Fatzer v. Anderson, 299 P. 2d 1078 (Kan. 1956); Du Bois v. Gibbons, 118 N.E. 2d 295 (Ill. 1954); Nelson v. Wyman, 105 A. 2d 756 (N.H. 1954); In re Joint Legislative Committee, etc., 32 N.E. 2d 769 (N.Y. 1941); Terrell v. King, 14 S.W. 2d 786 (Tex. 1929).

Read the Special Counsel report here.

And, here is your reward for getting all the way through this post:

 


The Freedom of Little Joe Cartwright: Tax Crime, Edgar Allan Poe, Noir Film and Lacrosse

Notes for the week.

Prosecuting Individuals

Federal criminal tax lawyer Jack Townsend blogs at Federal Tax Crimes.  Here is his note on Prosecuting Corporate Employees, particularly in the tax context:

I have previously blogged on Professor Brandon Garrett (UVA Law) who have carved out an academic niche on how the Government deals with corporate crime, particularly large corporate crime (the too big to jail group). See e.g., Judge Jed Rakoff Reviews Brandon Garrett’s Book on Too Big to Jail: How Prosecutors Compromise with Corporations (Federal Tax Crimes Blog 2/10/15), here. At the risk of oversimplifying his arguments, I summarize them in part relevant to this blog entry: When the Government goes after corporate misconduct, it too often focuses only on the corporation in terms of criminal sanctions and not the individuals, particularly those higher up the chain, who committed the underlying conduct. Corporations cannot go to jail; individuals can. Prosecuting and convicting individuals in addition to corporations could, he thinks, provide more front-end incentive for individuals to forego illegal conduct within the corporations. However, as fans of tax crimes know at least anecdotally, it is hard to convict higher level corporate officers for conduct that their underlings actually commit. The poster child example is the acquittal of Raoul Weil, a high-level UBS banker who “remoted” himself from the dirty work of actually servicing U.S. taxpayers seeking to evade U.S. tax. See e.g., Raoul Weil Found Not Guilty (Federal Tax Crimes 11/3/14; 11/6/14).

Mr. Townsend goes on to discuss the DOJ’s Yates Memorandum and new work by University of Virginia law professor Brandon Garrett.  Professor Garrett’s website (Federal Organizational Prosecution Agreements) is the best compendium of deferred-prosecution and non-prosecution agreements.

Michael Landon ("Little Joe Cartwright") being served with a subpoena (1968)

Michael Landon (“Little Joe Cartwright”) being served with a subpoena (1968)

Another useful Townsend post addresses a common issue — the Government’s attempt to muzzle the recipients of subpoenas:

In United States v. Gigliotti, 2015 U.S. Dist. LEXIS _____ (ED NY 12/23/15), here, Judge Dearie denied a motion to suppress evidence obtained pursuant to grand jury subpoena that unlawfully contained the following:
YOU ARE HEREBY DIRECTED NOT TO DISCLOSE THE EXISTENCE OF THIS SUBPOENA, AS IT MAY IMPEDE AN ONGOING INVESTIGATION.

Sound familiar?  Read the entire piece at Judge Criticizes Prosecutor’s Use of Language Directing Secrecy for Receipt of Grand Jury Subpoena.  We have written about the grand jury previously herehere and here.  If you are to young (or too old) to remember Bonanza on TV, here is a refresher.  Here is an episode from 1960 entitled — appropriately, for White Collar Wire readers — “Desert Justice”:

Head-on-a-platter and all that.

Head-on-a-platter and all that.

Or Not Prosecuting Individuals?

White Collar Wire should have sent a Christmas goose to Senator Elizabeth Warren (D-MA), who wants more white-collar types to get indicted: 2015 Spurred Billions in Bank Fines, But Not Enough for Warren.  In particular:

In a 10-page report titled “Rigged Justice: 2016,” the U.S. Senator’s staff cited 20 cases in which they say prosecutors showed “timidity” by not pursuing individuals for civil or criminal misdeeds. No executives at Citigroup Inc., JPMorgan Chase & Co., or Deutsche Bank AG were accused of wrongdoing in cases alleging rigged currency markets and the misleading of investors, her office wrote in the document released Friday. The investigations led to their companies paying billions of dollars in penalties.

Senator Warren will have none of the Yates Memo, thank you:

The report even dismisses a recent U.S. Justice Department announcement, known as the Yates memo, in which Deputy Attorney General Sally Quillian Yates heralded a new direction by telling prosecutors to embark on investigations by focusing on people, not companies. “Both before and after this DOJ announcement, accountability for corporate crimes has been shockingly weak,” Warren’s office wrote.

“Shocking to whom” is a good question, but it’s all good for the white-collar bar.  Here is her report.

Good Practices and Bad

A miscalculated penalty, perhaps.

A miscalculated penalty, perhaps.

From the Harvard Law School Forum on Corporate Governance and Financial Regulation and Jon Eisenberg, a partner in the Government Enforcement practice at K&L Gates LLP, here is a useful article (with cases and charts) about the SEC’s use of civil monetary penalties.  Tellingly, and sadly, the authors point out that “these decisions might not survive appellate scrutiny . . .  but very few respondents appeal their sanctions all the way to the D.C. Circuit.”

 

 

Hall monitor?

Hall monitor?

Deferred-prosecution agreements often impose corporate monitors.  Should the reports of such monitors be kept confidential?  A federal judge ordered the release of the HSBC monitor’s report, over the object of both HSBC and DOJ:

A federal judge has ordered the release of a report detailing how well HSBC Holdings Plc has complied with anti-money laundering requirements imposed by U.S. regulators when the British bank was fined $1.92 billion three years ago.

Thursday’s order by U.S. District Judge John Gleeson in Brooklyn is a defeat for HSBC and the U.S. Department of Justice, which complained the release could make it easier to launder money, including for terrorism, and discourage cooperation with law enforcement.

“This case implicates matters of great public concern and is therefore one which the public has an interest in overseeing,” Gleeson wrote, citing the public’s constitutional right of access under the First Amendment.

I cannot speak to the terrorism angle, but cooperation (and thus, monitoring) both work best when company employees have some comfort that what they say and do will be held in confidence, at least within reasonable parameters.  The public’s oversight interest is real, but surely an organization that has paid billions in fines and is living with a monitor is being “overseen” to a reasonable extent, especially when that oversight requires continued cooperation to be effective.

Read the entire article here: HSBC money laundering report must be made public.  To read our earlier posts about DPAs and monitors, go herehere, and here.

Crime Fiction

Digital content, quoth the raven.

Digital content, quoth the raven.

From the good folks at The Rap Sheet, a piece on the nominees for the 2016 Edgar Awards.  Here is the complete list from the Mystery Writers of America.

Thomas Hardy (1840-1928)

Thomas Hardy (1840-1928)

It is not a raven, but there is a bird in  Thomas Hardy’s poem “The Darkling Thrush”:

I leant upon a coppice gate
When Frost was spectre-grey,
And Winter’s dregs made desolate
The weakening eye of day.
The tangled bine-stems scored the sky
Like strings of broken lyres,
And all mankind that haunted nigh
Had sought their household fires.

The land’s sharp features seemed to be
The Century’s corpse outleant,
His crypt the cloudy canopy,
The wind his death-lament.
The ancient pulse of germ and birth
Was shrunken hard and dry,
And every spirit upon earth
Seemed fervourless as I.

At once a voice arose among
The bleak twigs overhead
In a full-hearted evensong
Of joy illimited;
An aged thrush, frail, gaunt, and small,
In blast-beruffled plume,
Had chosen thus to fling his soul
Upon the growing gloom.

So little cause for carolings
Of such ecstatic sound
Was written on terrestrial things
Afar or nigh around,
That I could think there trembled through
His happy good-night air
Some blessed Hope, whereof he knew
And I was unaware.

Crime Noir and Miles Davis

It's Miles. It's cool.

It’s Miles. It’s cool.

On the subject of crime, Apple Music must have intuited that I like noir-ish fiction and cool jazz.  It directed to me a set of Miles Davis that included “Ascenseur pour l’echafaud” (1958), a French crime film by Louis Malle released in the States as Elevator To The Scaffold (or Lift To The Scaffold in the U.K.)  Davis’s horn on the title track is as evocative as it gets, as seen here:

 

ESPN's 30-for-30

ESPN’s 30-for-30

Wishing It Were Fiction: Duke Lacrosse and Due Process

On Sunday, March 13, at 9 p.m. ET, ESPN’s acclaimed “30 for 30” film series will present Fantastic Lies, a film about the the Duke lacrosse case.  Here is an interview with the producer, Marina Zenovich.

Damage done.

Damage done.

We have written about the Duke lacrosse case before, here and here.

 

Depends on how we sell it.

Depends on how we sell it.

In opening statements and closing arguments, the genuine is good.  The cornball or the obscure, on the other hand, are bad.  The same is true of our written work.  As noted by Philip Corbett, master of the After Deadline blog in the New York Times:

[A]n overreliance on anecdotal openings — especially the classic “stranger in the lead” approach — can make our prose feel shopworn rather than vivid. This is particularly true when readers encounter unfamiliar names at the top of two or more adjacent stories, whether in print or online.

 

Read the entire piece: Here’s Someone You Never Heard of. Read On.

 


Barry Bonds, Ramblin’ Man

The federal appeals court in San Francisco recently reversed baseball player Barry Bonds’s conviction for obstruction of justice.

Grand jury slugfest.

Grand jury slugfest.

The criminal charge and conviction arose out of testimony that Bonds gave to a grand jury investigating the illegal provision and use of steroids in major league baseball.  As the Ninth Circuit Court of Appeals summarized it:

During a grand jury proceeding, defendant gave a rambling, nonresponsive answer to a simple question.  Because there is insufficient evidence that Statement C was material, defendant’s conviction for obstruction of justice in violation of 18 U.S.C. 1503 is not supported by the record. Whatever section 1503’s scope may be in other circumstances, defendant’s conviction here must be reversed.

Why is this decision relevant to corporations, their employees and their lawyers?

Interview

In interviews by government agents, in grand jury testimony led by prosecutors or in testimony at trial, a witness gets a lot of bad questions and gives a lot of bad answers. “Bad” answers are not necessarily untruthful. They may be vague; or not responsive to the question; or simply an observation made into the air in order to fill the silence.

Even well-prepared witnesses fall victim to this syndrome. Invariably, they fail to (a) listen to the question; (b) answer the question; and (c) stop. If it’s incomprehensible question, they fail to ask for a new question.  If it’s a question they don’t like, they answer some other, unasked question.

This problem is particularly acute with business people. In general, business people are compensated for having answers to questions and solutions to problems. To respond “I just don’t know” or “I don’t get your question” is not well received in commerce. Business people are trying to do a deal and “get to yes.”  “Yes” is not the place that agents, prosecutors and regulators seek. (At least, not that kind of “yes.”)

Sharp haircuts, dull questions.

Sharp haircuts, dull questions.

We have discussed here and here  and here the do’s and don’t’s of interactions with government agents.  In particular, do not fall prey to the Efrem Zimbalist, Jr. syndrome.

That lesson is worth repeating:

“Government Agents,” a Lightfoot140 by Jack Sharman. from LFW on Vimeo.


Representing Witnesses Before The Grand Jury

And you ain't authorized.

And you ain’t authorized.

For businesses and their officers, directors and employees, the grand jury is an increasingly visible complement to the threat of civil litigation and administrative sanction.  (We have discussed the grand jury’s role and power here and here).

Under the auspices of the Alabama State Bar’s White-Collar Crime Committee, Lightfoot hosted a one-hour CLE video on Representing Witnesses Before The Grand Jury.

Representing Witnesses Before the Grand Jury from LFW on Vimeo.

This program offers practical advice for representing witnesses subpoenaed to testify before the grand jury or provide documents. Listen to insights into the decision to testify (or not), preparing your client to provide testimony, securing immunity and special considerations in representing the immunized witness.

Monopoly

Reasonable doubt at a reasonable price.

Hosted by Lightfoot white-collar lawyers Jack Sharman, Tenley Armstrong  and Jeff Doss, the panelists are Richard Jaffe (Jaffe & Drennan, P.C.), David McKnight (Baxley, Dillard, McKnight & James) and Melissa Atwood (U.S. Attorney’s Office, Northern District of Alabama).  (The panelists’ opinions are their own and may or may not reflect the opinions of their firms, their clients or, in Ms. Atwood’s case, the Department of Justice).


A Meditation On Independence Day

Oh, say, Can you still see plea-bargaining reform?

Oh, say, Can you still see plea-bargaining reform?

We all like the Fourth of July; most of us want it to mean something beyond cookouts and fireworks.  When my children were little, I would read aloud to them the entire Declaration of Independence, an oration they found both alarming and distracting. The nation’s Independence Day celebration has changed over time, as has its people (alarmed or distracted) and their culture.

We have an Independence Day in film and in song, works of art that speak to a patriotism grounded in a corporate concept (national independence) and in a citizen concept (individual independence).

Here in the early portion of the 21st-century, it is the domestic liberty of individuals, rather than the specter of foreign domination from across the seas, that is the most fruitful subject for reflection this Independence Day.  At the end, you can decide which is more apt: alarm or distraction.

In the Declaration of Independence, the list of grievances against King George III and his agents is lengthy and detailed, a fact that my young children frequently brought to my attention as I declaimed in our den.

Need to read the fine print.

Need to read the fine print.

In general, however, the revolution that followed the Declaration was a “conservative” revolution, at least compared to successor-revolutions such as the French and the Bolshevik.  In terms of its genesis, the complaints in the Declaration were the complaints of Englishmen who had been denied English rights.

Further, many of the concepts underpinning those rights – for example, the nature of the sovereign and his subservience to God, the more powerful King – arose out of the Protestant Reformation in Europe.  There were many flavors and strains of what we call “Protestant,” but one of several unifying factors was an emphasis on the individual’s direct access to the divine, rather than a requirement that the individual proceed through a priest or a bureaucratic episcopate that could grant or withhold dispensation, including that ultimate dispensation of liberty and property rights — the freedom and freehold of the kingdom of God.  The individual believer could now read a sacred text (the Bible) for himself or herself.  Priest, prince, pope: all potentates were sidelined.

In our pluralistic, post–Christendom culture, what bearing (if any) does this historical, cultural and religious context have this Independence Day?

On this Independence Day, the concept of “independence” is informed by two consistent drumbeats.

First, the national-security state that has grown ever since September 11 shows no sign of abating.

Still got the briefcase, though.

Still got the briefcase, though.

Second, the editorial, social-media and congressional criticism of prosecutorial handling of post-recession financial institutions and white-collar defendants feeds an apparently deep-seated need to assign particular blame for generalized ills.

For a white-collar defense lawyer, he confluence of these two drumbeats is deafening. For business people – indeed, for all citizens – the scales have been tipped further in favor of the state and its investigatory and prosecutorial apparatus.  Substantively, there continues an arguable over- criminalization of undesirable but not, at heart, criminal conduct, a legislative spasm driven by an unseemly result–orientation.

The grand jury has long been unmoored from its original function as a buffer between the sovereign and subject.  Reform of the grand jury and the plea-bargaining system is overdue but unlikely to happen in the near-term.  (On the other hand, Martin Luther thought he was merely trying to reform the church and did not intend, as Winston Churchill said in another context, to set Europe ablaze).

Maybe I needed the microphones.

Maybe I needed the microphones.

In addition, the “presumption of innocence” about which we all learned (or, at least, used to learn) in civics class has been translated into a presumption of guilt.  Most citizens, most of the time, believe that when a person or company is charged with a criminal offense, they are guilty (or perhaps guilty of something pretty close to the charged offense).  (We have discussed presumption problems here and here).

Such impulses and shifts in presumptions do damage due process and, ultimately, the status of a free people.  Citizens in white-collar professions are often the first to clamor for more national security externally and more law-enforcement domestically.  In many circumstances, of course, that clarion call is entirely appropriate, even vital, to our survival as a nation.  On the other hand, the call can only be answered by the raw exercise of sovereign power.  One need not be a Protestant Reformer or a Declaration subscriber to wonder if another call, this one for reflection and vigilance, is not perhaps overdue if we are to maintain those liberties — that “independence” — that we all treasure.

Happy Independence Day.


Of Grand Juries and Ham Sandwiches

Ready for indictment.

Ready for indictment.

It is true: having long ago become unmoored from its origins as a shield between Crown and subject, a grand jury can indict a ham sandwich if the prosecutor desires.  The grand jury’s status as a prosecutor’s tool animates this post from our friends at White Collar Crime Prof Blog: Kaley Opinion, Based on Legal Fiction, Is Harmful to Defendants and Lawyers

In particular:

In Kaley v. United States (12-464, decided February 25, 2014), the Supreme Court by a 6-3 vote extended the rulings of United States v. Monsanto, 491 U.S. 600 (1989) and Caplin & Drysdale v. United States, 491 U.S. 617 (1989) by determining that a grand jury finding of probable cause that a federal defendant committed a crime was conclusive in any effort by that defendant to secure funds out of temporarily restrained assets to hire a private attorney of his choice.  A defendant seeking release of funds may still be able to challenge the grand jury determination that there was probable cause that the assets seized resulted from or were involved in the purported criminal activity, but not that the activity was criminal.

The opinion, written by Justice Kagan, exalts the inviolability of the grand jury and demonstrates a naive misunderstanding of (or lack of concern about) the reality of its role in the determination of probable cause, ignores the presumption of innocence, and denigrates the importance of independent defense counsel in the criminal justice system.  It tilts the playing field of justice in the government’s favor by giving the government, in some cases, the option to deprive the defendant of the counsel he has selected or intends to select.

And you ain't authorized.

And you ain’t authorized.

This subject merits a deeper review in upcoming weeks, but suffice it to note that the combination of (1) the legal fiction of grand jury independence; (2) the grand jury’s power and secrecy; and (3) the fact that businesses and businesspeople often misunderstand or are careless about items (1) and (2) can spell disaster for well-meaning corporate citizens.


Why read White Collar Wire?

This is a blog about business crime. We post stories about news, cases, judicial opinions, practical tips and scholarly work regarding white-collar criminal and civil enforcement, grand jury investigations and regulatory compliance. We want to be useful to businesspeople, internal counsel, defense lawyers in private practice, prosecutors and law-school teachers.

Sometimes, we write about crime fiction, cocktails and theology. As anyone who’s ever been involved in the defense or prosecution of a white-collar case can testify, all three come in handy.

Don’t read us because you’re a criminal. Read us because, some time or other, someone may think you are.

Follow me onTwitter — @WhiteCollarWire — or email me at jsharman@lightfootlaw.com.

If you want more info about me, it’s here: http://lightfootlaw.com/alabama-lawyer/jackson-r-sharman

Jack Sharman