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October 21, 2011

What's Fair For the Goose Is Maybe Not The Same For the Gander; Immunity Orders And The Ninth Circuit


It's good to be king.

The government, in a criminal investigation, can issue a grand jury subpoena to collect evidence and put witnesses under oath. It can execute search warrants to go into a home or business and take documents. It can cut deals with people it thinks are involved in a criminal enterprise, so that they'll spend less time - or no time - in prison if they turn in someone else.

Someone fending off a government investigated can't do any of this.

King.jpgNormally, if a person has information that would make someone who hears it think the person is guilty of a crime, that person has a right to refuse to talk about it. It's a part of the Fifth Amendment. The government has a fix for that problem too - if a witness won't talk, and won't play ball by cooperating, the government can ask a court to grant the person immunity. The statute that lets a court grant immunity is at 18 U.S.C. § 6003.

If a court grants a person immunity, that person cannot be prosecuted based on the information he provides. That's in 18 U.S.C. § 6002. There's an exception if the person lies or does something similar when immunized, but, beyond that, a person with immunity cannot be prosecuted for what they talk about.

Getting immunity can be a very good deal.

What about defense witnesses though? Surely, there are times when a person who is accused of a crime identifies a witness who he needs for his defense, yet the witness may get himself charged with a crime if he provides information.

For example, imagine that a witness knows a person accused of a crime didn't commit it, because the witness and the accused were across town counterfeiting money together at the time of the alleged crime. The witness refuses to testify and invokes his Fifth Amendment right not to - he doesn't want the government to put him in prison for the counterfeiting.

Can the defense ask the court to give immunity to the witness?* If so, when?

That was exactly the situation that the district court dealt with in United States v. Wilkes. The Ninth Circuit issued an opinion on this very question.

Mr. Wilkes was accused of bribing Congressman Duke Cunningham.** The government alleged that Mr. Wilkes made inappropriate gifts to the Congressman - including a trip to Hawaii where they enjoyed the beach, scuba diving, and prostitutes.

In exchange, Mr. Wilkes' company was alleged to have sold inferior products to the United States government.

A number of people testified against Mr. Wilkes. They worked for his company and the government had asked the district court to grant them immunity. The district court did. They testified against Wilkes.

One of Mr. Wilkes other employees would have told a different story. The district court listened to what Mr. Wilkes lawyer said the witness would say. The court concluded,

I have to tell you the proffer I have as to what this fellow can offer strikes me as material and relevant evidence that the defense would want to present to counter some of what's been presented by the United States through immunized witnesses.

So, naturally, the trial court ruled that

The court, having fully heard all counsel, denies the motion to convey use immunity.

The district court believed that it could only grant immunity if the prosecutors had intentionally engaged in misconduct. As the court saw things,

unless it's somehow tethered to the suggestion of prosecutorial misconduct, I don't think it's appropriate for the court to make determinations of who gets immunity and who doesn't. In the first instance, under our system of Government, that's a prosecutorial decision. And unless I can find that the way in which discretion was exercised was unfair so as to deny the defendant a due process right, then it's not appropriate for me to substitute my judgment for that of the prosecutor. I do have a concern about the effect of not granting immunity in this case, but I would have the same concern if it was a different privilege implicated over which I'd have no authority to pierce the privilege and order a witness to testify, any number of other privileges. So it's an effect that the criminal justice system lives with and accommodates.

One can imagine that the court's regret about this "effect" was not very comforting to Mr. Wilkes.

Happily, after Mr. Wilkes trial, the Ninth Circuit decided United States v. Straub. (click for Ninth Circuit blog commentary)

Straub held that a district court should order immunity when the testimony would be relevant and the prosecutor gave immunity to one witness, but not to another who would have contradicted the one the prosecutor choose, and that choice by the prosecutor

the effect of so distorting the fact-finding process that the defendant was denied his due process right to a fundamentally fair trial

(Keep in mind, friends who aren't from the left coast, the rule in your part of the country may be different.)

Based on this standard, the court of appeals remanded for a hearing on whether the district court should have immunized the witness under Straub. The appellate court did note, though, that "[t]he district court also repeatedly expressed its concern that not granting Williams immunity would have the effect of distorting the fact-finding process." So perhaps the court of appeals thought it knew how this would turn out.

The rest of the opinion in Wilkes is a bit bleak. I wouldn't read it unless you're a prosecutor or looking to be saddened.

* This is assuming the defense is willing to swallow a conviction on the counterfeiting. There's probably a better hypothetical out there.
** The opinion says that the total list of charges were "one count of conspiracy
(18 U.S.C. § 371), ten counts of honest services wire fraud (18 U.S.C. §§ 1343 and 1346), one count of bribery of a public official (18 U.S.C. § 201), and one count of money laundering (18 U.S.C. § 1956(a)(1)(B)(i))."

June 10, 2011

OIG Investigations and Federal Employees

Federal employees are in a vulnerable position for an investigation by an Office of Inspector General (or OIG).  Basically, an OIG investigation can run in two different directions.  Each has it's own dangers that a federal employee who hears from an OIG Agent needs to be aware of.

If an OIG Agent is investigating a criminal violation of law, then the federal employee has the risk of being prosecuted.  If the OIG Agent thinks he or she can prove that the federal employee committed a crime, and the OIG Agent can convince an Assistant United States Attorney to bring a case, then the federal government is bringing its resources to bear to convict the federal employee of a crime.  Often, this means that the government wants a felony conviction, and it can quickly mean that prison time is a real risk.

If, however, the Assistant United States Attorney decides that a criminal prosecution is not warranted, either because there isn't enough evidence of a crime, or because what happened isn't serious enough to warrant a prosecution, or because what the OIG Agent is investigating isn't a violation of a criminal law, then the federal employee is still not in a good position, because he or she can lose his or her job.  If criminal charges aren't an option, the OIG Agent can require that a federal employee give an interview.  If the employee doesn't give the interview, then that can be a basis for a disciplinary action.

Federal employees face unique risks.  They're conduct has its own law enforcement offices that are set up to investigate - aside from government contractors, OIG Agents spend a lot of time looking at federal employees. 

For a federal employee who is under scrutiny by an OIG Agent, it is important to know what is happening, and what needs to be done to protect your job, and, possibly, your freedom.

November 5, 2009

Federal Government Contractors - Watch Out For Fraud Prosecutions

For many federal contractors, TARP and the American Recovery and Reinvestment Act are a godsend. The economy isn't great overall, but the federal government is still spending. This is good for the economy around Washington, D.C., and it's good for those who sell services and products to the federal government.

The government, though, has a concern about fraud in government contracting. Some of this is generic. Every agent with an Office of Inspector General can tell you that his or her job is to combat waste, fraud, and abuse. Even in normal times, Inspector General offices spend a lot of time investigating whether federal contractors have engaged in fraud. As a result, even in normal times, government contractors need to take reasonable steps to prepare themselves in case an OIG agent comes calling.

But these are not normal times. The federal government is spending an astounding amount of money, and it's worried that this spending is ripe for fraud. The Department of Justice's Criminal Division is gearing up to investigate and prosecute those who receive government funds and who they suspect of fraud. The White House has unveiled a web page where anyone can track the spending from the Recovery Act and it's express purpose is to prevent fraud.

Perhaps this will mean only that those who engage in shady activity have a higher likelihood of being prosecuted. What I worry will happen, though, is that the government will prosecute where it could better regulate, and that good, but perhaps sloppy, federal contractors, and their employees, will be caught up in politically created prosecutions and investigations.

Of course, time will tell.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 21, 2009

Manufacturing Speculation About A Company's Involvement In A Government Contracting Bribery Investigation

Apparently, a Kuwait company is suspected of getting millions of dollars of improper contracts after an Army office plead guilty to bribery.

The article above is an odd bit of journalism. The headline says that a Kuwaiti firm is "tied" to a scandal, but it isn't clear who "ties" the two together. As I read it, there is a bribery case in federal court that may involve, very tangentially, a Kuwaiti company. That company, in an unrelated matter, had a problem with a government contract that was treated a little strangely.

This is a nice example of how journalists have even fewer checks on their power than prosecutors. That this stuff gets published to make a company look bad is disappointing.

Here's the background:

An Army Major named Cockerham has entered a plea to taking about $9.6 million in bribes from a ledger that he maintained that said there were $15 million in bribes. [Note - if you're planning on taking bribes, do not keep them in a ledger.]

On the ledger, the Kuwaiti company, KMS Co., has an entry for $40,000, suggesting that the company gave the Major $40,000 in bribe money.

The company has other problems not related to the Major; it billed the government for gasoline that was reported stolen, and the reporter doubts that's an accurate description of why the gasoline didn't make it to the Army. The sanction for this missing gasoline is not what a source for the reporter says it should be.

The Major is cooperating with prosecutors, hoping to get more time off his sentence. The government isn't saying anything. The Major's defense lawyer says he doesn't know if they're going to talk about the $40,000 at sentencing.

I don't see any link in this story between the bribery investigation and the gasoline issue. Which makes me wonder who is feeding this story to the reporter.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

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