The Definition of White Collar Crime

If you search the U. S. criminal code for the definition of white collar crime, you will come up empty. Nor will you find a separate section in the statute books captioned “White Collar Crimes.” Nevertheless, the idea of white collar as a distinct category of crime is firmly ensconced not only in the criminal law and law practice but also in popular culture. White collar crime also is a primary focus of this blog. So what exactly is it?

Origin of the Term White Collar Crime

The term “white collar crime” has an interesting history that actually originated in sociology, not law. Sociologist Edwin Sutherland coined the term in the 1930s and defined it as:

Wrongdoing committed by a person of respectability and high social status in the course of his [or her] occupation.

Edwin Sutherland, who first came up with the definition of white collar crime.

Sutherland thought white collar crime was a serious matter

Sutherland was responding to sociological theories that the root causes of crime were poverty and desperation.  He pointed out there was an entire category of crime, which he called white collar crime, committed by people with wealth and high social status. Theories that argued crime was primarily a problem of the lower social classes — the “blue collar criminals” — could not explain this type of criminal activity.

Although Sutherland’s definition was useful for his sociological purposes, it is not particularly useful for criminal law. The justice system does not define offenses based on the class of the offender.  A poor man who commits Medicaid fraud to get the medication he needs to survive and the doctor who commits Medicaid fraud in order to afford a new BMW both commit the same criminal offense.  To be sure, prosecutors will handle the cases differently when deciding whether and how to prosecute. But the nature and elements of the offense are the same.

Accordingly, one of the first things I tell students in my white collar crime class is that the term “white collar crime” is something of a misnomer.  As Sutherland intended, the term suggests a focus on the nature of the offender – the “white collar” executive or person of high social status.  White collar criminal law, however, focuses on the nature of the offense. It refers to a category of criminal offenses that share certain common characteristics.

The Definition of White Collar Crime

As I mentioned, there is no official definition of white collar crime in the criminal code. Here is a good working definition:

White collar crimes are non-violent illegal activities that principally use deceit, deception, concealment, fraud, or misrepresentation to obtain money, property, or some other advantage, or to conceal or cover up other wrongdoing.

This definition excludes a broad category of offenses considered violent crime and “street” crime (assaults, robbery, burglary, etc.). It does not include drug offenses. It also excludes certain specialized criminal areas such as immigration or terrorism.

White collar crimes often present issues and challenges that are quite different from those presented by violent crimes or drug crimes. They may require different resources, a different kind of focus, and a different skill set on the part of both attorneys and investigators. It therefore makes sense not only to study those crimes together but to identify the practice of white collar crime as a distinct specialty.

law books and gavel

Examples of White Collar Crimes

Although there is no definitive or exhaustive list, these are some of the leading white collar criminal offenses:

  1. Mail and Wire Fraud
  2. Securities Fraud/Insider Trading
  3. Conspiracy
  4. Bribery, Gratuities, and other public corruption
  5. Obstruction of Justice
  6. Perjury
  7. False Statements
  8. Money Laundering
  9. Racketeer Influenced and Corrupt Organizations Act (RICO)
  10. Foreign Corrupt Practices Act (FCPA)

Characteristics of White Collar Crimes

White collar crimes and generally share some common characteristics, including:

  1. They are non-violent.
  2. Deceit or deception is involved.
  3. Intent is often the central question.
  4. The grand jury plays a critical role.
  5. Defense counsel are actively involved in the investigative stage.
  6. They often involve multiple actors.
  7. They often involve corporations.
  8. Parallel proceedings are often a factor.
  9. They highlight the breadth of the statutes and importance of prosecutorial discretion.

These are generalizations and not all will apply in all cases, but they are the characteristics common to many white collar matters. These characteristics give rise to the special challenges and demands that make white collar crime a distinct practice area for both prosecutors and the defense bar. Let’s examine them in more detail.

Non-violent

As the definition quoted above provides, white collar crimes are non-violent offenses. This is a key characteristic that distinguishes white collar crime from many other types of crime.

Deceit or Deception Involved

Again as provided in the definition, the key to most white collar offenses is obtaining money, property, or some other advantage through deceit or deception.  It’s taking property at the point of a pen rather than the point of a gun. This is what’s at the heart of fraud, a concept that is central to many white collar crimes.

Centrality of Questions of Intent

Although bad intent must be proven in all criminal cases, in non-white collar cases it is not usually the central or most difficult question. If a burglar breaks into a home and steals jewelry, his intent in doing so is pretty clear.  In a major drug deal, the intent of the parties is not really in dispute.  If I stick a gun in your face and take your wallet, my intent is plain. In such cases, it is usually clear that a crime has been committed and that the criminal had the requisite intent. The challenge is finding out who did it and proving that beyond a reasonable doubt.

In white collar cases, by contrast, what happened and who did it are often quite clear. In a contracting fraud case, for example, there will be a paper trail of documents, e-mails, and other records that spell out just what happened and who did what. The central issue will be intent: what was in the minds of the actors at the time. Were the false invoices really an attempt to defraud, or were they — as the defense will almost certainly claim — merely an accounting error or some other kind of mistake? Were the gifts to a politician just presents from an old friend, or were they a corrupt attempt to influence the politician’s actions? Are the witness’s misstatements under oath deliberate lies and therefore perjury, or merely innocent mistakes or misrecollections?

A street crime prosecution typically involves proving observable events that took place — the shooting, the robbery, the drug deal. A white collar crime prosecution frequently involves proving what was going on in someone’s head. Given our inability to read minds, that can make proving such cases beyond a reasonable doubt particularly challenging.

Grand jury room door

Role of the Grand Jury

In a street crime case, much of the investigative work, such as gathering physical evidence and interviewing witnesses, can be done by case agents outside of the grand jury.  In the federal system a drug felony or violent felony will still require a grand jury indictment, but frequently the grand jury work is not extensive. It’s clear that a crime has been committed, and once investigators have determined the identity of the suspect the grand jury will simply hear sufficient evidence to find probable cause and vote on the appropriate charges.

In white collar crime, the grand jury plays a much more critical role. The grand jury is the most powerful and important investigative tool of the white collar prosecutor. Grand jury subpoenas allow the prosecution to gather the documents from reluctant businesses and compel sworn testimony from recalcitrant witnesses. The grand jury investigation may extend for months or even years, as complex fraud schemes that may involve millions of documents and scores of witnesses are investigated. Through it all, the grand jury frequently is determining not simpler questions such as “who did it,” but questions of intent and whether a crime was even committed at all. Grand jury work is a big part of the practice of white collar crime, for both the prosecution and the defense.

Role of Defense Counsel

In a typical street crime case, defense counsel first gets involved when the client has been arrested, charged, and brought into court for a presentment or arraignment.  The investigation usually is largely over, and the case will move forward to trial, plea, or some other disposition.

White collar defense counsel play an entirely different role, one that is related to the central role of the grand jury. For white collar defense counsel, their involvement begins when the first grand jury subpoenas start to fly. They conduct their own investigation, interviewing many of the same witnesses and reviewing many of the same documents being reviewed by the grand jury. Defense counsel coordinate the client’s response to the grand jury subpoenas and other investigative steps by the government. They also interact with the agents and prosecutors throughout the investigation to achieve the best possible outcome for their client, whether that means no charges at all, an immunity deal, a plea agreement, or some other disposition.

For a street crime defense lawyer, the case usually begins with the indictment.  But for a white collar defense lawyer, job one is managing the investigation and trying to prevent the indictment from ever happening. The white collar case is generally won or lost at the grand jury stage, because if there is an indictment, the odds are overwhelming that the client will either plead guilty or be convicted at trial. This aspect of managing the investigation, and counseling the client throughout, is the distinctive feature of white collar criminal defense work that differentiates it from other criminal defense.

Involvement of Multiple Actors

It’s hard to pull off a fraud like Enron or Worldcom by yourself. Significant white collar crimes frequently will involve multiple individuals acting together. This leads to issues involving not only conspiracy law but also the use and representation of cooperating witnesses, negotiating plea bargains that involve cooperation with the “little fish” in order to get the “big fish,” seeking and granting immunity for witnesses, joint defense agreements, and other legal issues that arise only in complicated, multi-player investigations.

Involvement of Corporations

Urban legend has it that depression-era bank robber Willie Sutton, when finally apprehended, was asked why he only robbed banks and replied, “Because that’s where the money is.” Similarly, in our economy, corporations are the vehicle through which large amounts of capital are raised. Because white collar crimes frequently are business crimes or “money crimes,” corporations often end up involved in the case, either as potential defendants or as victims. A related aspect of this is the possibility of corporate criminal liability, with corporations actually being charged with the crimes committed on their behalf by their agents – something that rarely occurs in the world of street crime or drug cases. For defense counsel this also raises unique challenges involving representing corporate entities vs. representing individual defendants.

Parallel Proceedings

White collar cases often involve events that generate interest from multiple different agencies or investigative bodies. For example, in a major bank fraud case, the same set of facts may be the subject of investigations by the federal grand jury, state grand juries, and federal agencies such as the IRS or the SEC. There may be multiple civil suits filed by aggrieved parties. Congress may want to hold hearings and have witnesses testify. Trying to manage all of these different proceedings simultaneously presents special challenges for white collar defense counsel in particular, but also for the prosecution. Once again, in the criminal world of drug crimes or violent crimes, this is not often an issue.

Breadth of Statutes and Importance of Prosecutorial Discretion

White collar crime statutes are notoriously broad and, in many cases, somewhat vague. Many statutes prohibit “fraud,” for example, but nowhere is fraud defined. The statutes speak in broad proscriptions, perhaps necessarily so to avoid loopholes and evasion by clever criminals.  This heightens the role and importance of prosecutorial discretion.

In a homicide case, if the prosecutor believes she can prove who did it, she is going to prosecute. She will not take a pass in favor of a civil suit by the victim’s family. In a potential fraud case, though, there may be many possible alternative outcomes and remedies. The white collar prosecutor may look at a potential complex fraud case and decide the conduct is not clearly criminal enough to justify the time and resources of a criminal investigation. She may decide the matter can be resolved through civil sanctions by the SEC or through some other remedy.

White collar offenses themselves are often less black and white. Accordingly, the role of the prosecutor in interpreting the statutes and determining when charges are appropriate is much greater. Whether prosecutors do a good job of exercising this discretion in all cases is currently a subject of considerable debate.

Click here to subscribe to the Sidebars mailing list and receive email notifications of future posts.

Bob McDonnell’s New Trial Motion and the Definition of “Official Act”

Former Virginia Governor Robert McDonnell and his wife Maureen were convicted in federal district court on September 4, 2014 on multiple counts of conspiracy and public corruption. As expected, they have asked the judge to throw out their convictions based on a number of alleged legal errors during the trial. It’s an uphill battle, as many of their arguments were already rejected earlier by the same judge, but those legal arguments also will form the groundwork for the appeal to the U.S. Court of Appeals for the Fourth Circuit that will follow their sentencing.

McDonnell2

One of the central defense arguments in their new trial motions is that the corruption convictions cannot stand because any actions by McDonnell in response to the gifts he received from Jonnie Williams did not constitute “official acts” within the meaning of the federal bribery statute. This has been a key issue throughout the entire case. But should it have been?

The definition of “official act” at issue comes from the federal bribery statute, 18 U.S.C. §201.  Section 201(a)(3) provides:

the term “official act” means any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.

Since before the case was even indicted, the defense has argued that even if McDonnell promoted Jonnie Williams’ product Anatabloc by, for example, holding a product launch event at the Governor’s mansion or recommending that Virginia officials use it in research studies, these were just efforts to help a Virginia business and did not constitute “decisions” or “actions” on a “matter, cause, suit, proceeding or controversy” under this definition.

The government agreed throughout the trial that this was the correct legal standard and argued successfully to the judge and jury that the former Governor’s actions did qualify as “official acts.”  The trial judge also agreed that this was the relevant question and included the definition of “official acts” from 18 U.S.C. §201(a)(3) in his instructions to the jury.

I think this is the wrong legal standard.  I don’t think the government should have been required to prove that McDonnell’s conduct met this definition of “official act” in order to convict him.  And if I’m right, it means the McDonnells got more than just a fair trial on the corruption issues — they got a trial where the legal cards were actually stacked in their favor.

Federal Bribery vs. Honest Services Fraud

The explanation requires getting down in the weeds a bit with these criminal statutes, so bear with me.  As I noted, the definition of “official act” that has been central to this case comes from the federal bribery statute, 18 U.S.C. §201.  Under that statute a public official is guilty of bribery if he/she “corruptly demands, seeks, receives, accepts, or agrees to receive or accept” anything of value in exchange for being influenced in the performance of any “official act,” as defined above. The statute, however, applies only to federal public officials. A state governor generally doesn’t qualify, which is why the McDonnells were not charged under this law.

The corruption charges in the McDonnell case are Hobbs Act extortion under color of official right and honest services wire fraud, the two most common federal vehicles for charging state and local public corruption. The Supreme Court has held that Hobbs Act extortion under color of official right is basically the equivalent of bribery. Honest services fraud used to apply to a wider range of allegedly fraudulent activities, but in the landmark 2010 case of Skilling v. United States the Supreme Court limited the scope of the statute and held that it applies only to conduct that amounts to bribery or kickbacks.

Both the Hobbs Act and honest services fraud essentially operate as “bribery by another name” when it comes to federal prosecution of state and local corruption. They allow federal prosecutors to charge bribery against those who, like McDonnell, do not qualify as federal public officials under 18 U.S.C. §201. (For the rest of this discussion I’m going to focus on honest services fraud, although I think the end result is the same for the Hobbs Act as well.)

So the McDonnell defense syllogism goes like this: 1) McDonnell is charged with honest services fraud, and Skilling held that honest services fraud requires proof of bribery; 2) the federal bribery statute, 18 U.S.C. §201, requires that in exchange for a benefit the public official performed “official acts;” and therefore 3) to prove honest services fraud, prosecutors must show that McDonnell performed “official acts” as defined in the federal bribery statute.

The principal flaw in this argument is that the Skilling Court said honest services fraud was limited to bribery, not to “bribery as defined in 18 U.S.C. §201.” In fact, it makes absolutely no sense to suggest that when the Skilling Court said “bribery” it was referring to the specific terms of the federal bribery statute.

One reason it makes no sense is that honest services fraud applies to state and local public officials like McDonnell, who would not be subject to bribery charges under §201. Honest services fraud also applies to private sector bribery, such as an employee who violates his duty of honest services to his employer by accepting payments from a competitor company to sell his employer’s secrets. (Skilling itself was a private sector honest services fraud case, involving former Enron executive Jeff Skilling.) Private sector bribery likewise is not covered by 18 U.S.C. §201 and private individuals cannot, by definition, perform “official acts.” It cannot be the case, therefore, that “bribery” for honest services fraud is equivalent to bribery as defined by 18 U.S.C. §201, because much of the bribery unquestionably covered by honest services fraud would not violate §201.

Further evidence comes from the method the Skilling Court used to determine what Congress meant by “honest services” when it passed the honest services statute in 1988. The Court surveyed the honest services cases decided before that law was passed and concluded that because the overwhelming majority of those cases involved bribes or kickbacks it was appropriate to limit the definition of honest services fraud to such cases.  But most of the cases the Court relied upon involved state and local corruption or private sector honest services fraud  — conduct that would not have violated the federal bribery statute.

In other words, when the Skilling Court defined honest services fraud it looked to the broad universe of bribery law and drew upon a large number of cases that would not have fallen under 18 U.S.C. §201. Indeed, the Court expressly noted (footnote 45) that honest services fraud, as it was defining it, reached well beyond the scope of 18 U.S.C. §201. When it used the term “bribery” the Court was referring not to the precise terms of the federal bribery statute but to a more generic or common-law definition that would encompass bribery of officials at the federal, state or local level as well as private sector bribery.

Does this mean that state officials such as McDonnell are held to a different, and possibly higher, standard than federal officials?  Not at all – federal officials also may be charged with honest services fraud under the same standards.  All it means is that honest services fraud bribery and18 U.S.C. §201 bribery of a federal official are not identical. Any other conclusion would render the Skilling decision incoherent.

The Essence of Bribery

Bribery is an ancient common-law crime that was around long before Congress attempted to define it; there is nothing magical about the formulation in §201. The essence of bribery is a quid pro quo: the government must show that in exchange for something of value the bribe recipient agreed to be influenced in the discretionary exercise of his or her powers. It’s the influence component that is the key, more than the precise nature of the action taken: bribery influences the recipient of the bribe to act not in the best interest of those to whom the recipient owes a duty of loyalty but rather to benefit the person who paid the bribe.

So where could a federal court look for a definition of bribery to use in an honest services fraud case, if not to §201? Courts frequently begin such questions by looking at legal dictionaries.  My Black’s Law Dictionary defines bribery as offering or giving a thing of value “to influence action as an official or in discharge of a legal or public duty.”  Another standard source, the Model Penal Code (§240.1), defines bribery as agreeing to accept “any pecuniary benefit as consideration for the recipient’s decision, opinion, recommendation, vote or other exercise of discretion as a public servant.” The heart of the bribery concept is the same: the quid pro quo, exchange of something of value to influence an official’s discretionary action.  But the language is more general than §201(a)(3) and does not include the specific focus on a “question, matter, cause, suit, proceeding or controversy.”

Other possible sources include other laws. The federal bribery statute is not the only bribery law out there. In a case involving the Virginia governor it might make sense for a court also to examine the Virginia state bribery statute, since it is the citizens of Virginia to whom McDonnell owed the duty of honest services. Virginia law provides that a public official is guilty of bribery if he/she accepts any “pecuniary benefit” from another in exchange for being influenced in a “decision, opinion, recommendation, vote or other exercise of discretion as a public servant.” VA Code §18.2-447(2). Again the heart of the bribery offense is the same: the official being influenced in his or her actions by the benefit paid. But this definition, particularly the references to the official making a “recommendation” or the “exercise of discretion,” also is broader than the definition of “official acts” in 18 U.S.C. §201.  It would seem clearly to cover some of the actions taken by McDonnell, such as recommending that Virginia researchers undertake a study of Anatabloc or exercising his discretion to use the Governor’s mansion for a product launch event. If the trial judge had also used this statute to inform his jury instructions on what constitutes bribery for honest services fraud, the instructions would have looked quite different.

I’m not arguing that a Virginia state statute should govern a federal prosecution. The key point is that it is the common-law offense of bribery that must be shown to establish honest services fraud, not conduct that meets the precise terms of a single statutory definition. Nevertheless, in the McDonnell case many trees lost their lives in the battles over whether McDonnell’s conduct amounted to a “decision” or “action” on a “matter” or “proceeding” or otherwise fit the precise terms of 18 U.S.C. §201(a)(3). That battle is still being waged in the new trial motions. The fight should have been over the essence of bribery, the quid pro quo, and whether McDonnell agreed to exercise the discretionary powers of his office in exchange for the gifts. Instead, much of the battle was over whether the quo in this case happened to match the exact terms of only one of the many possible formulations of the crime of bribery — and one that comes from a statute with which McDonnell was not, and could not be, charged.

(One question all of this raises is why the federal definition of “official act” is so specific and relatively narrow. The reason has to do with the fact that the same statute and same definition of “official act” apply to two different crimes, bribery and gratuities. In addition, there are other ways to violate the federal bribery statute that do not require proof of an “official act.” I’ll explore these issues in more detail in a future post.)

The Significance of United States v. Jefferson

How did the §201 definition of “official act” become such a central part of McDonnell’s case? Both sides in the case, as well as the trial judge, were heavily influenced by the important corruption case of United States v. Jefferson.  Jefferson is a former Louisiana Congressman who was prosecuted and convicted in 2009 for public corruption, also in the Eastern District of Virginia.  On the appeal of Jefferson’s case the Fourth Circuit (which also will hear McDonnell’s appeal) spent a great deal of time discussing the proper definition of “official act” under 18 U.S.C.§201, and upheld the trial court’s instructions concerning that term. McDonnell’s trial judge modeled his own jury instructions on those given in Jefferson, including telling the jury they had to find that McDonnell committed “official acts” as so defined.

Jefferson, however, was a federal public official who was actually charged with violating 18 U.S.C. §201. The court in Jefferson had to discuss the definition of “official act” under the federal bribery statute, and the government had to prove that Jefferson performed “official acts,” because that was the actual crime of which Jefferson was convicted. (Jefferson also was convicted of honest services fraud, but once he was found guilty of federal bribery the Skilling requirement that bribery was involved was obviously satisfied and there was no need to look further.)

The Jefferson court, however, had no occasion to explore the real issue in McDonnell’s case: is the concept of bribery in honest services fraud limited only to the precise definition of bribery found in §201, particularly when the defendant is not charged under §201? As demonstrated above, I believe the answer to that question is “no.” Nevertheless, from the beginning of the McDonnell case, the defense, prosecution, and judge all agreed that Jefferson was the governing legal authority and that Jefferson‘s discussion of “official acts” defined what the government had to prove.

A Narrowed Playing Field

I’m confident the government recognizes this issue. In a defense motion for disclosure of grand jury materials filed on January 21, 2014, the very day the indictment was returned, the defense referred to the government taking the position that bribery under honest services fraud and the Hobbs Act is not limited to simply the “official acts” definition under 18 U.S.C. §201. (There is no information in that pleading about where and when the government made that argument; perhaps it was in pre-indictment meetings with the defense team.) In that same motion the defense argued against this broader definition and advanced their claim, made consistently throughout the case, that the government was required to prove “official acts” as defined in 18 U.S.C. §201.

If that was indeed the government’s initial position, I believe they were correct. By the time they responded to that defense motion in February, however, it appears the prosecution had made a tactical decision not to fight that fight and to agree that proving “official acts” as defined in §201(a)(3) was required. From that point on, up to and including today, both sides and the judge have proceeded with the case on the assumption that this is the proper standard.

It appears to me that the defense made an aggressive effort from day one to narrow the playing field to the defense’s advantage, and the government ultimately agreed to compete on that field. Given the jury’s verdict it’s hard to fault the government for that decision — you always have to choose your battles. I wonder, though, if it’s a decision they will end up regretting if it is used against them in the future, with other defendants arguing in every honest services case that §201(a)(3) controls.

In the new trial motions, the defense argues that even with this narrowed playing field the judge’s jury instructions on “official act” were flawed. I suppose at this point the government is somewhat locked in to arguing on the “official acts” turf before the trial judge, since it agreed that was the appropriate standard. At least on appeal, though, if I were representing the government, one of my arguments would be not only was the judge’s instruction on bribery legally sound, but it was actually a more favorable instruction for the defense than the law requires.

In other words, the McDonnells got a break when it came to the jury instructions on public corruption, and they were still convicted. That’s going to make it that much harder to argue that the jury’s verdict should be overturned.

Thoughts?  Questions?  A different point of view?  Leave me a comment below.

Sign up for free e-mail updates of new blog posts by clicking on the “follow” button on the upper right.

Ink by the Barrel: Assessing the Obama Administration’s “War on the Press”

Updated 12/13/14 – see below.

There’s an old adage about tangling with the press that advises: “Never pick a fight with a man who buys ink by the barrel.” The Obama administration must be reflecting on the wisdom of that advice these days.

Over the past few years, the press has concluded that this administration is just about the worst thing that ever happened to them. James Risen, the New York Times reporter under subpoena to testify in the criminal trial of his alleged source Jeffrey Sterling, has said he believes President Obama “hates the press” and that Obama is the “greatest enemy to press freedom in a generation.” Susan Page of USA Today recently claimed that the Obama White House is “more dangerous” to the press than any other White House in history.

The resignation of Attorney General Eric Holder has led to another round of criticism of the administration’s treatment of journalists, as people reflect on Holder’s tenure. In a recent column in the Washington Post ominously titled “Holder’s Dark Legacy,” First Amendment lawyer David Schulz argued that the Obama administration has been “worse than Nixon” for freedom of the press.

So how did a liberal Democrat — and former constitutional law professor to boot – end up branded as one of the greatest threats to the free press in the nation’s history?

Much of the criticism stems from the Obama administration’s aggressive prosecution of leakers of classified information. A popular talking point is that this administration has prosecuted twice as many leakers as all other administrations in history, put together. This is true, and sounds like a startling statistic, until you realize that the grand total of such prosecutions by the Obama administration is seven – and at least a couple of those cases were actually started during the Bush years.

That’s right: out of all the people who now call themselves journalists, all the media reports being made every day, and all of the leaks constantly taking place, the Obama administration has summoned the vast prosecutorial resources of the federal government to wage “war on the press” by bringing a grand total of about one case a year. And of course those cases aren’t brought against journalists, but against federal employees who have violated their oaths to maintain classified information.

This slight uptick in leak prosecutions from a mere trickle to a slightly larger trickle is not really surprising. Security concerns in general have greatly increased in the post-9/11 world, causing the government to take certain leaks more seriously.

In addition, technology has made leaks potentially much more damaging. In the past, if sensitive information was leaked to a media outlet such as the New York Times, the government could usually depend on the editors contacting them about a potential story and at least listening to any security concerns the government had. Now, however, with the click of a mouse, a leaker can disseminate information worldwide instantly, with no need to go through any journalist, much less a “mainstream media” reporter. Little wonder that the administration is trying to head off such leaks before they even occur.

Most people would probably look at this handful of leak prosecutions and conclude the administration is making at least a modest effort to protect national security by deterring disclosures of sensitive classified material. The press, however, looks at these prosecutions and sees an assault on the First Amendment. To them, these cases are not about plugging leaks, but about attempting to muzzle journalists.

The press, of course, depends on leaks from confidential sources in order to fulfill their role of acting as a government watchdog and keeping the public informed. But cracking down on leaks is not the equivalent of waging war on the press. Leakers of classified information are, by definition, breaking the law. Despite the government’s efforts, such leaks continue at a robust pace, and to some degree this is no doubt both inevitable and healthy, particularly given the amount of material the government classifies. The press regularly receives those leaks when they occur, but that doesn’t mean there is some kind of First Amendment right to expect that federal employees will routinely violate their oaths — or that the government will always look the other way when they do.

Most members of the media presumably agree there are some core government secrets that need to be kept. No one would argue, for example, that a government employee should be able freely to leak the identity of covert government agents overseas, or planned military operations during time of war, or similarly vital national security information.

If the press deems leak prosecutions an assault on freedom of the press, the logical implication of that position is that leakers should never be punished. But if leakers could act with impunity, then rules protecting classified information would be toothless and impossible to enforce and national security would be at risk. If a leak is serious enough, then investigation and prosecution have to be an option. The target of such cases is the leak, not journalism itself, and a leak prosecution is not an attack on the press.

A related aspect of this controversy is that investigations of leak cases sometimes require seeking information from journalists. As I’ve noted elsewhere, leak cases are different from most investigations. If a confidential source leaks information to the press about some criminal misconduct at the Pentagon, for example, a prosecutor who wants to investigate that misconduct has no need to talk to the reporter or discover the reporter’s source. When a source is merely reporting misconduct by others, the government has tremendous power through the grand jury to investigate that misconduct directly.

In a leak case, however, the potential criminal misconduct is the source’s disclosure of classified information, and the conversation with the reporter is itself the crime being investigated. The source is the target of the investigation and frequently the reporter is the only direct witness. In such cases, in order to prove the crime beyond a reasonable doubt, it may be necessary to seek information from the reporter in the form of e-mail or phone records or even testimony about the source’s identity.

The cases in which this happens are extremely rare. Under Department of Justice guidelines, information may be sought from a reporter only as a last resort, and only after multiple levels of approval. When it happens it’s almost always in a leak case – and even in many of those, the government manages to prove the case without seeking any information from the journalist who received the leak.

In the rare case in which the government does seek information from a journalist, however, the reaction of the press generally borders on the apocalyptic. Any such efforts are seen not as steps to prosecute the leak, but as an attack on journalism itself. For example, despite the Fourth Circuit Court of Appeals ruling that he is a critical government witness in the prosecution of Jeffrey Sterling, James Risen has repeatedly claimed he has been subpoenaed because the government is trying to punish him for his reporting. Risen is currently on a tour promoting his new book, where he regularly talks about his supposed status as a victim of government persecution and how it is evidence that Obama “hates the press.”

(As an aside, although Risen apparently believes the government officials who are supposedly “after” him are quite corrupt, he must not think they are very creative. As his case demonstrates, prosecuting a source is a lousy way to punish a journalist. It will be incredibly slow, as the reporter’s employer hires top-notch legal talent to spend years in court battling the subpoena. It will also turn the reporter into a martyr and folk hero within the journalism community, resulting in speaking gigs, journalism awards, and great material for a book tour — as the saying goes, you can’t buy that kind of publicity. If the source ends up pleading guilty, as about 95% of criminal defendants do, or if the case otherwise goes away, then the reporter will never be called to testify and will never risk being punished for contempt at all. If this administration really is “worse than Nixon” and is motivated by a desire to punish Risen, you might expect them to sic the IRS on him or use some other more efficient and effective method.)

It’s remarkable to me how the press — with a few notable exceptions such as the Washington Post’s Walter Pincus — loses all perspective over any government investigation that touches in any way on their activities. There tends to be no recognition of competing interests or the possible need to compromise. It reminds me of the National Rifle Association, which usually responds to even the most modest gun control proposal with overblown claims that the Second Amendment is under assault and the government is coming to take your guns. What the government sees as an attempt to improve public safety, the gun lobby sees as an all-out assault on the right to bear arms.

Similarly, what the government sees as an attempt to stop damaging leaks of classified material, the press sees as proof that the administration is an enemy of the First Amendment. (“Obama is coming to take your newspapers!!”). The press are usually quick to call out other groups that make such overblown claims, but seem unable to apply that same media spotlight to themselves.

There’s another saying that in any war, truth is the first casualty. The truth about the alleged “war on the press” is that these leak cases are not about the press at all. They are about investigating crimes involving potentially grave harm to national security, where journalism occasionally gets caught in the crossfire. The government prosecuting about one such case per year poses no threat to the First Amendment or to our robust free press.

For more than two centuries there has been a healthy tension between the right and obligation of the free press to inform the public and the legitimate need of the government to keep secret certain vital information. In general this push and pull – with the government trying to keep some secrets and the press trying to ferret them out – is healthy for our democracy. This tension flares up from time to time in skirmishes such as those involving Risen, but an occasional skirmish is not a war.

Update 12/13/14:  According to press reports today, Attorney General Holder has decided that the Department of Justice will not seek to compel Risen to identify his source, despite having fought for three years to enforce the subpoena. If this were indeed a war, you’d have to call that decision an unconditional surrender.

Questions?  Comments?  Please leave them below.

UPDATE:  Last week I discussed Yates v. United States, where the Supreme Court is considering the definition of a “tangible object” under the obstruction of justice statute 18 U.S.C. 1519.  A federal judge in Boston has now delayed the sentencing of two friends of the accused Boston marathon bomber, Dzhokhar Tsarnaev, pending the Supreme Court’s decision in Yates.  The two were convicted under 1519 for taking Tsarnaev’s backpack and throwing it in a dumpster to conceal evidence that would implicate him in the bombing. The government had cited these prosecutions in its brief in Yates as an example of a case where 1519 has been applied to a broader range of “tangible objects.” If the Supreme Court accepts Yates’s argument that 1519 applies only to tangible objects that are data storage devices, a backpack — like a fish — may not qualify as a “tangible object” and those convictions may be overturned.   Stay tuned.

Yates v. United States: Something Fishy at the Supreme Court

Update 2/25/15:  In a 5-4 decision the Supreme Court today ruled in favor of Yates, finding that fish are not “tangible objects” under 18 U.S.C. 1519.  I’ll have an analysis of the opinion in next week’s post.

Today the U.S. Supreme Court takes up a federal criminal case, Yates v. United States, that raises one of those questions only a law professor could love: is a fish a “tangible object?”

The defendant John Yates is a commercial fisherman. In August 2007 he was working as the captain of the Miss Katie, a commercial fishing vessel catching red grouper in the Gulf of Mexico. While the boat was in federal waters, a Florida Fish and Wildlife Conservation Commission officer boarded her to conduct a routine inspection on behalf of the National Marine Fisheries Service.

Federal law at the time required harvested red grouper to be at least 20 inches long. The officer noticed several grouper that appeared to be undersized, and proceeded to measure a number of the fish aboard the Miss Katie. He ultimately determined there were 72 undersized grouper on board and issued Yates a civil citation for violating the fishing regulations.

The officer placed the undersized fish in a crate in the ship’s storage area and told Yates to leave the fish there until he returned to port, where the fish would be seized and destroyed. Once the officer left, however, Yates instructed a crew member to throw the undersized fish overboard and replace them with larger ones. When the Miss Katie returned to port, officials inspected the fish again and smelled a rat. A crew member ultimately confessed to making the swap and throwing the illegal fish overboard at Yates’ direction, and said that Yates instructed the crew to lie to federal officials about disposing of the fish.

Yates was charged with three crimes: destroying evidence to prevent its seizure (18 U.S.C. 2232), false statements to a federal official (18 U.S.C. 1001) and obstruction of justice (18 U.S.C. 1519).  At trial the jury acquitted him on the false statements count and convicted him of the other two charges.  The U.S. Court of Appeals for the Eleventh Circuit affirmed. Only the obstruction of justice conviction is now on appeal in the Supreme Court.

The obstruction of justice statute Yates was charged with violating, 18 U.S.C. 1519, provides:

Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.

18 U.S.C. 1519 (2002) (emphasis added).  Yates argued at trial and in the Court of Appeals that this statute does not apply to his conduct because the fish that he destroyed were not “tangible objects” within the meaning of this law.  The lower courts ruled against him and upheld his conviction, and the Supreme Court will now hear the case.

keep using 2

At first glance, this might appear to be a pretty straightforward case.  “Tangible object” is a broad term and seems to refer to any object that has substance or a physical form, which would certainly include a fish. This was essentially the approach taken by the 11th Circuit in its rather cursory analysis: a fish fits the dictionary definition of a tangible object, case closed. Upon closer examination, however, Yates actually has some fairly compelling arguments in his favor.

The statute in question, 18 U.S.C. 1519, is relatively new.  It is part of the Sarbanes-Oxley Act that Congress passed in 2002 in response to the huge corporate financial scandals that had recently taken place, such as Enron and Worldcom. A primary motivation for those laws was the Arthur Anderson case, where the accounting giant shredded millions of pages of Enron documents in anticipation of an upcoming SEC investigation.  In the aftermath of that case there was concern that existing obstruction of justice statutes did not adequately cover a situation where a defendant personally destroyed evidence in anticipation of a possible federal proceeding that had not yet begun.  Accordingly, as part of Sarbanes-Oxley, Congress closed this loophole by amending a number of the obstruction of justice statutes and adding some new ones, including Section 1519.

Yates argues that “tangible object” has to be read in the context of this history and the other language of Section 1519. There are canons of statutory construction with obscure Latin names that say when the meaning of a general term in a statute is unclear, you look to the company it keeps: the other terms in the statute.  For example, if a statute referred to “rods, reels, nets, tackle, and other equipment” and you wanted to know what Congress meant by “other equipment,” you would conclude, considering the terms preceding it, that Congress intended to refer to equipment related to fishing.  You probably wouldn’t read that statute to apply to something like a bulldozer or an office copier, even though those are certainly “equipment” in other contexts.

Relying on the legislative history, Yates argues that Congress had the Arthur Anderson shredding in mind when it passed Section 1519 and that it is primarily an “anti-shredding” provision. He claims the statute is concerned only with record-keeping, as evidenced by the terms “document” and “record,” and not with the broader potential universe of all obstruction of justice. In context, therefore, “tangible object” refers only to objects that can be used to store data or information, such as computer hard drives or thumb drives. Those are the types of “tangible objects” that fit into the same general category as “documents” and “records” — objects that hold information.

Yates also relies upon Section 1519’s use of terms such as “falsify” or “make a false entry in” and argues that these terms further demonstrate the statute is concerned only with objects that can store information.  It makes sense to say one could make a false entry on a computer hard drive, but one cannot falsify or make a false entry in a fish.

The Government’s primary response is that the statute says what it says.  “Tangible object” may be broad, but it is not ambiguous, and the canons of statutory construction that Yates relies upon only come into play where there is ambiguity. Any type of physical object may potentially provide information that is relevant to a federal investigation.  Therefore Congress intended to outlaw the destruction of any type of evidence, if done with the intent to obstruct a government matter. If Congress truly intended the statute to be as limited as Yates suggests, it would have been a simple matter to write “document, record, or other information storage device” — but instead Congress chose the broader term, “tangible object.”

If Yates is correct, the government argues, then 1519 would criminalize a murder defendant destroying his victim’s diary but not destroying the murder weapon. Congress could not have intended such an irrational result. To pick a hypothetical even closer to the actual facts, suppose the officer had taken photos of the fish and told Yates to keep the photos and bring them back to port.  If Yates is correct, Section 1519 would criminalize Yates destroying the photos of the fish but not the fish themselves, which are the best evidence of the violation. Why would Congress pass such a law?

One response to this argument is that destruction of a murder weapon likely could be charged under other obstruction of justice statutes, just not under Section 1519. Indeed, one thing this case highlights is just what a mess the federal obstruction of justice laws are. A number of different obstruction prohibitions have been added piecemeal to the criminal code over the decades, and they overlap and duplicate each other in many instances. It may well be that Yates could have been charged under one of the other obstruction statutes, such as 18 U.S.C. 1512(c), and the prosecutor simply chose the wrong one to use.

A number of organizations and individuals, including the Chamber of Commerce, the Cato Institute, and former U.S. Representative Oxley, who co-authored the Sarbanes-Oxley Act, have submitted briefs in support of Yates. They agree that the statute was aimed only at business record-keeping and not at obstruction of justice in the larger sense. They argue that the government’s position — that Section 1519 applies to any kind of tangible object at all — would represent a dramatic and unwarranted expansion of obstruction of justice laws in cases in which an official government proceeding is not underway or even necessarily contemplated.

At first I thought this looked like an easy win for the Government, but now I’m not so sure. This Court does have a track record of refusing to narrow white-collar statutes by creating limitations that do not appear in the text. The argument usually is that the statute says what it says, and if Congress did not intend that, Congress can fix it. If the Court takes that approach, then Yates will lose.

But the mere fact the Court took the case is good news for Yates; it means at least four of the Justices were troubled enough by his conviction that they wanted to take a look. Perhaps the Court will use this case to reel in Section 1519 and bring a little badly-needed clarity to the law of obstruction of justice.