Senator Menendez and the Speech or Debate Clause


Update: On 9/28/15, the judge denied Menendez’s motions to dismiss the indictment based on the speech or debate clause.  Menendez is expected to appeal that ruling to the U.S. Court of Appeals for the Third Circuit.

Update 2: The Third Circuit denied Menendez’s appeal on July 29, 2016. On December 12, 2016, he filed a petition for certiorari asking the Supreme Court to review his speech or debate claims.

Update 3: The Supreme Court declined to take Menendez’s appeal on March 20, 2017. The case will now go back to the district court to proceed towards trial.

United States Senator Robert Menendez of New Jersey and his co-defendant Salomon Melgen were indicted last April on multiple counts of corruption. The indictment describes a bribery scheme: over a number of years, Melgen is alleged to have provided Menendez with numerous valuable gifts, including multiple trips on his private jet, repeated stays at a luxury villa in the Dominican Republic, and hundreds of thousands of dollars in contributions to various campaigns and a legal defense fund. In exchange, Menendez is alleged to have taken various official actions to benefit Melgen. (For a detailed analysis of the indictment, see my earlier post here.)

Since the charges were announced, some have wondered whether the Constitution’s speech or debate clause might shield Menendez’s conduct or provide him with a defense. The speech or debate clause is almost inevitably raised in any case involving a member of Congress, and has already been the subject of some preliminary skirmishing in the case. In the end, though, it seems unlikely to be much help to Menendez.


The Speech or Debate Clause: Protection for “Legislative Acts”

The speech or debate clause, Article I, Sec. 6, Cl. 1 of the Constitution, provides that “for any Speech or Debate in either house, [Senators and Representatives] shall not be questioned in any other Place.” The clause has a long and distinguished legal history. It was based on a similar provision in the English Bill of Rights of 1689, passed in response to the Crown’s nasty habit of arresting members of Parliament for sedition when they made speeches the king didn’t like. The framers considered the clause a key part of the system of checks and balances, because it protects members of the legislative branch from harassment or intimidation by the executive or by a hostile judiciary.

The Supreme Court has made it clear over the years that the protections of the clause extend not only to actual speeches and debates on Capitol Hill but to all “legislative acts” or acts within the “legislative sphere.” Legislative acts include things such as voting, actions taken in committee, preparing committee reports, talking to other Members concerning bills, and other activities directly related to the passage of legislation.

At the same time, it’s clear that the Clause does not bar inquiry into the actions of a member of Congress simply because those actions might be related in some way to his or her official duties. Nor does it provide Members of Congress with immunity from prosecution for official corruption. As long as the government can prove its case without reference to legislative acts, the speech or debate clause presents no bar.

A leading Supreme Court case interpreting the clause involved Alaska Senator Mike Gravel, who in 1971 convened a Senate subcommittee hearing at which he read extensively from the Pentagon Papers and placed the entire 47 volumes into the Congressional Record. He later arranged for private publication of the papers. A grand jury investigating possible criminal conduct in connection with the release of the papers subpoenaed an aide to Gravel to question him about these events, and Gravel moved to quash the subpoena.

The Court first held it was undeniable that Gravel himself could not be questioned about or punished for his behavior in the Senate. That was core speech or debate conduct. The Court also held that the protections of the clause must extend to legislative aides, if their conduct would have been a protected legislative act if performed by the Member himself. Accordingly, Gravel’s aide likewise could not be questioned in the grand jury about events that took place on the Senate floor.

The arrangement for private publication of the papers, however, was another matter. The Court noted that the speech or debate clause does not cover everything done by a Member of Congress, and the mere fact that things were done in an official capacity does not make them protected “legislative acts:”

The heart of the Clause is speech or debate in either House. Insofar as the Clause is construed to reach other matters, they must be an integral part of the deliberative and communicative processes by which Members participate in committee and House proceedings with respect to the consideration and passage or rejection of proposed legislation or with respect to other matters which the Constitution places within the jurisdiction of either House.

As a result, the Court concluded, the grand jury was free to inquire into areas such as how Gravel received the papers in the first place, as well as his arrangements for private publication. Even though he did these things in his capacity as a Senator, they were not legislative acts protected by the clause.

In a companion case to Gravel, United States v. Brewster, the Court stated that evidence will be barred only if it becomes “necessary to inquire into how [the defendant] spoke, how he debated, how he voted, or anything he did in the chamber or in committee.” Activities need not take place inside the Capitol to be protected however; other actions directly related to the legislative process, such as preparing reports or conducting investigations related to legislation, are also covered.

On the other hand, acts such as performing constituent services, writing newsletters, meeting with Executive branch agencies, and giving speeches outside of Congress, although part of a Member’s job, are not protected by the speech or debate clause. These activities are considered political in nature and not related to the core legislative duties of debating and enacting legislation.

Members of Congress under investigation often argue that virtually all of their activities have some role to play in the legislative process and should be protected, but courts generally reject such claims. If that were the standard, Members of Congress would end up virtually immune from prosecution for corruption or any other job-related misconduct. As the Supreme Court noted in Brewster, the Clause “does not prohibit inquiry into illegal conduct simply because it has some nexus to legislative functions.”

The key in any speech or debate case, therefore, is to determine whether proof of the charges will require any inquiry into protected legislative acts. Evidence concerning legislative acts will be prohibited, even if that ends up meaning the defendant may not be prosecuted at all. But if the government can prove its case without evidence of or inquiry into legislative acts, the case may proceed.

greetings from nj

Speech or Debate in the Menendez Case

On the face of the indictment, the actions alleged to have been taken by Menendez and his staff do not appear to be legislative acts that would be protected by the speech or debate clause. The actions fall into three main categories:

Visas:  In 2007 and 2008, Menendez and his staff contacted various embassy and State Department personnel on Melgen’s behalf, in order to help three different girlfriends of Melgen — one from Brazil, one from Ukraine, and one from the Dominican Republic — obtain visas to come to the United States. These efforts consisted of e-mails, phone calls and letters from Menendez and his staff in support of the visa applications.

Port Screening Contract:  Melgen owned an interest in a company that had a contract with the government of the Dominican Republic to provide x-ray screening of all cargo entering Dominican ports. The contract, potentially worth many millions of dollars, had been tied up in disputes and work had not begun. Beginning in 2012, Menendez and his staff began contacting State Department officials to urge them to pressure the Dominican government to implement the contract. At one point Menendez allegedly met with an Assistant Secretary of State to discuss the issue, told him he was unsatisfied with the way State was handling it, and threatened to hold a hearing and call the Assistant Secretary to testify.

Medicare dispute:  Melgen, a prominent Florida ophthalmologist, was embroiled for several years in a multi-million dollar dispute over his Medicare billings. He was allegedly taking an eye medication that came in a vial designed for a single patient and using it to treat two or three patients. He would then bill Medicare as if he had purchased a separate vial for each individual patient. When Medicare discovered this practice they began pursuing claims against Melgen for overbilling. Melgen was recently indicted in a separate Medicare fraud case in Florida, based in part on this same overbilling scheme.

Menendez and his staff worked for several years to try to help Melgen resolve his dispute with Medicare. This included Menendez himself meeting with Health and Human Services Secretary Kathleen Sebelius and with Marilyn Tavenner, the acting director for the Center for Medicare and Medicaid Services.

There doesn’t seem to be much here that would raise a speech or debate clause issue. All of the actions described involve Menendez or his staff interacting with various executive branch agencies concerning matters that do not appear directly related to legislation. The Supreme Court has consistently considered such contacts with the executive branch to be political, rather than legislative, and not protected by the clause.

Menendez’s best hope will be to try to convince the court that his actions on behalf of Melgen were actually related to some broader, legislative policy issue that he was investigating. For example, some reports have suggested that Menendez will argue his meeting with Sebelius and other actions in the Medicare dispute were related to his work on the Senate Finance Committee, which oversees Medicare’s finances. In addition, the indictment notes that Menendez threatened to hold a hearing concerning the port contract dispute, and Menendez may try to argue that any steps he took concerning that contract were part of his investigation related to the potential hearing and Congressional oversight of the matter.

We caught a glimpse during the grand jury investigation of the type of arguments Menendez likely will make. Apparently two of Menendez’s aides refused to testify in the grand jury about certain actions they or Menendez took in the Medicare and port contract disputes, citing the speech or debate clause. The district court ruled that the privilege did not apply and that the aides must testify.

On appeal, however, the Third Circuit sent the issue back to the trial court for further fact-finding concerning whether any of Menendez’s actions were related to his legislative activities. (This information was revealed when the Third Circuit’s order, which should have been under seal because it related to a grand jury investigation, was inadvertently made public for a period of time.) Apparently the government decided it could live without the evidence at the grand jury stage, and proceeded to indict the case without it rather than continue the fight.

Establishing that his contacts with different executive branch officials on Melgen’s behalf were “legislative acts” seems like an uphill battle for Menendez. On the Medicare issue, for example, the indictment is full of references to staff memos and e-mails referring to Melgen’s Medicare problem and the “Melgen case.” The correspondence is all about Melgen’s particular dispute, not about any broader policy issues or proposed legislation. The paper trail may not support any after-the-fact attempts to argue that Menendez’s efforts were really about legislation, not about helping out his benefactor.

Defense motions in the case are currently due on July 20, and we will know more about Menendez’s arguments then. Unlike most issues in a criminal trial, the burden of proving that the speech or debate clause applies falls on Menendez, not on the government. But even if he doesn’t prevail, Menendez can tie things up for quite a while. Orders concerning the application of the speech or debate clause may be appealed immediately, before trial. It’s clear from the pleadings already filed that both sides, as well as the judge, are anticipating such pre-trial appeals.

If Menendez loses on speech or debate before the trial judge his appeals could easily delay the trial, currently set for October 13, for a year or more. If the government loses on speech or debate, it will have to decide whether the evidence that ends up being excluded is so critical to the case that it needs to appeal, or whether it can proceed without it, as it apparently did in the grand jury.

The bottom line is that the speech or debate clause seems unlikely to derail the Menendez prosecution in the end.  But fights over the clause may well delay the trial well into 2016 or beyond, while Menendez, whose current term runs through 2018, continues to represent the Garden State in the United States Senate.

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The Ongoing Debate Over the Reporter’s Privilege

I had a video conference last week with a group of judges attending the National Judicial College in Reno, Nevada. They were taking a course on Media and the Courts, and wanted to discuss the reporter’s privilege. Their instructor reached out to me after seeing some articles I’ve written opposing the privilege. The primary topic of discussion: should there be a reporter’s privilege?

A reporter’s privilege, or shield law, protects journalists from being compelled to testify about the identity of their confidential sources or other information they learned while newsgathering. Supporters of the privilege argue that if reporters can be compelled to reveal their sources, whistleblowers and others who wish to remain anonymous will be afraid to talk to them. That will impair the ability of journalists to root out important information and will deprive the public of the benefits of a vigorous free press.  Without the privilege, they claim, sources will be “chilled” from coming forward and the free flow of information to the public will dry up.

I first became interested in the reporter’s privilege and started writing about it ten years ago, during the Valerie Plame/CIA leak case.  During that investigation, reporter Judith Miller of the New York Times was held in contempt and went to jail for about three months after defying a court order to reveal her White House source in the grand jury.   Miller’s incarceration led to a number of unsuccessful attempts to pass a privilege law in Congress, but efforts to shield leakers of confidential information lost steam in the aftermath of Wikileaks and Edward Snowden.

Renewed debate over the privilege has been in the news again recently. Reporter James Risen asserted the privilege and refused to testify in the criminal trial of Jeffrey Sterling, a former CIA employee charged with leaking classified information to Risen. The courts ruled against Risen after a four-year legal battle, but he still refused to testify. Faced with the prospect of having Risen jailed for contempt, the government at the eleventh hour withdrew its subpoena and prosecuted Sterling (successfully) without Risen’s testimony.

In addition, earlier this month, the National Press Club and the Reporters Committee for Freedom of the Press hosted a reunion of journalists who have gone to jail to protect their confidential sources.  (Judith Miller was a featured participant.) The gathering was part of a renewed push to urge Congress once again to pass a federal shield law.

The judges and I had a great conversation. Here’s a summary of some of their questions and my responses.

old newsroom - should there be a reporter's privilege?

What’s the current legal status of the reporter’s privilege? 

On the federal level, the Supreme Court ruled in 1972 in Branzburg v. Hayes that the First Amendment does not provide a privilege for reporters to refuse to testify in grand jury proceedings. That remains the law as far as grand jury proceedings are concerned. Lower courts have disagreed over whether there is at least a qualified privilege in civil cases, or in criminal matters other than grand jury proceedings. The Supreme Court has not weighed in since Branzburg, although it did recently decline to hear the appeal of the Fourth Circuit’s decision in the James Risen case, which rejected Risen’s claim of privilege in a criminal trial.

Over the past four decades there have been many unsuccessful attempts in Congress to pass a federal shield law. Since the CIA leak case and the jailing of Judith Miller, a bill called the Free Flow of Information Act has been introduced in repeated Congressional sessions but has never been passed.

Although there is no federal shield law, the Department of Justice has voluntary guidelines that sharply limit when DOJ attorneys are allowed to subpoena a reporter. Those guidelines were recently made even more strict in the wake of the Risen case and some other recent DOJ skirmishes with the press.

On the state level, forty-eight states and the District of Columbia recognize some form of a reporter’s privilege in at least some cases, either by statute or by judicial decision. Wyoming and Hawaii are the sole holdouts.

Should There Be a Reporter’s Privilege?

Privileges are contrary to the fundamental precept that the public is entitled to every person’s evidence. By definition, a privilege keeps relevant information out of the hands of a judge or jury trying to decide a case. If the information is important enough, that can lead to errors and injustice in particular cases, including wrongful convictions or guilty individuals escaping punishment altogether.

Proponents of any new privilege therefore have the burden of demonstrating that the benefits of the privilege would outweigh the costs. On the benefit side of the equation, reporter’s privilege advocates argue that in the absence of a privilege sources will fear to speak to reporters and the public will be deprived of vital information. They cite such famous stories as Watergate, Abu Ghraib, and the revelation of secret CIA prisons and NSA wiretapping to demonstrate the critical importance of confidential sources to investigative journalism.

The problem with this argument is that all of those stories were reported, and all of those sources came forward, in the absence of a federal shield law. One could just as easily argue, therefore, that these stories demonstrate a shield law is unnecessary.

In Branzburg the Supreme Court was skeptical of the premise behind the shield law, noting that the lessons of history suggest the free press has always flourished without a privilege.  Claims about “chilling effects” and harms to the press, the Court noted, were largely made by self-interested members of the media themselves.

On the cost side, we also must recall that the shield law is a blunt instrument that protects the bad along with the good. Not all leaks involve a virtuous whistleblower seeking to benefit the public by disclosing government misconduct. Some leaks are political hit jobs, like that in the Valerie Plame/CIA leak case, or otherwise involve bad motives. There is no public interest in shielding such leaks to the press.

Finally, it’s not true that reporters cannot promise sources confidentiality in the absence of a shield law. Because cases in which journalists are subpoenaed are so rare, reporters can provide sources with a high degree of confidentiality simply by promising not to name them in the story and never to reveal their name unless legally compelled to do so.

Leaks happen, and particularly in Washington, leaking to the press is almost a way of life. Sources talk to the press for many different reasons, some noble and some not so noble. There is no evidence that the presence or absence of a shield law makes any real difference in whether or not a source decides to come forward. In the absence of such evidence, the rationale for the shield law evaporates.

Why has the legislation repeatedly failed in Congress and what are its prospects?

I think there have been two primary stumbling blocks for the federal shield law.

The first is the question of carving out exceptions. Congress is understandably not willing to enact a blanket privilege that would apply in every case. Therefore the proposed statutes always contain exceptions providing that the privilege will not apply in cases involving terrorism or where national security is threatened, or in cases involving certain violent crimes, or sex crimes against children, or other categories of offenses.

Inability to agree on the proper scope of these various exceptions has helped stall the bills. The problem, of course, is that the more exceptions the bill contains, the less effective it will be because it becomes more and more difficult for a source or a reporter to determine, at the time of a potential disclosure, whether the privilege would apply. If we assume for argument’s sake that sources actually weigh the presence or absence of a privilege when deciding whether to speak to a reporter, the most effective privilege would be a blanket one with no exceptions – but Congress will never agree to that.  A privilege full of loopholes is little better than no privilege at all.

A second thorny problem is how to define who is a “journalist” entitled to the protection of the shield law. Even more than forty years ago in Branzburg, the Supreme Court noted that trying to define who is a “newsman” worthy of the privilege “would present practical and conceptual difficulties of a high order.” This was at a time when the news media consisted largely of local newspapers, radio, and three television networks. In the age of the Internet, social media, and citizen journalism, those difficulties are exponentially greater.

Congress is trying to strike a balance between covering those who are truly engaged in journalism while not creating a sweeping privilege that might apply to everyone who posts something of public interest on their own blog or Facebook page. Trying to draw those lines has proven challenging; the latest iteration of the shield law contained a definition of a “covered journalist” that was hundreds of words long, full of exceptions and qualifications, and that still didn’t satisfy all the interested parties.

How would you solve the definition of “journalist?”

I’m not sure there is a way to do it that doesn’t raise significant constitutional problems. The Supreme Court has made it clear that the protections of the First Amendment apply equally to the New York Times and to a lowly street-corner pamphleteer – or pajama-clad blogger. But the shield law requires the government to define who is a “real” journalist worthy of special legal protection and who is not. That effectively creates a subset of “approved” speakers, and approaches a system of allowing the government to license journalists. I agree with investigative journalist Walter Pincus at the Washington Post that this raises significant First Amendment concerns.

Why not just have a sweeping definition of “journalist” that covers everyone who shares information with the public?  What’s the problem?

If the privilege applies to everyone who shares any information with the public, then a tremendous amount of information from an enormous number of witnesses is potentially excluded from the legal system. Again, privileges have costs, and the more sweeping the privilege, the greater the costs.  And once again we’d have to wonder whether there are really any offsetting benefits that would outweigh those costs, considering that the information age currently appears to be thriving in the absence of such a privilege.

A related problem is the administrative costs of the privilege. Every claim of privilege requires legal proceedings, pleadings, lawyers, hearings, and court time to resolve. If a privilege is too broad, a huge amount of time, money and effort in the judicial system will be devoted to adjudicating claims of that privilege.

If almost all states have some form of privilege, why can’t the federal government have one?

This really is an apples to oranges comparison. The largest and most significant cases, including those involving national security and terrorism, tend to be in federal court. A federal shield law would have far greater potential to apply in those types of cases, and therefore to shield the most dangerous or harmful conduct. State courts generally don’t deal with issues of that magnitude.

For the federal shield law, the potential stakes are much higher. That’s part of the reason Congress has had so much trouble working out the terms of a shield law that it could live with.

What sort of evidence would it take to convince you that the privilege is a good idea?

To borrow a hypothetical posed by one of the judges, suppose Watergate had never been reported. Then suppose Mark Felt came forward in the 1990s, after Nixon had died, to say he had considered talking to Woodward and Bernstein but had been afraid to do so because of the absence of a reporter’s privilege. As a result, there was no “Deep Throat,” and the country never learned about a major political scandal.

If credible stories like this existed, that would at least provide some evidence that shield law advocates are correct. It wouldn’t have to be on the scale of Watergate, of course, but if the privilege is really as important as its advocates claim, you’d think there would be some documented examples of sources coming forward later to say they were deterred from speaking in the past due to the absence of a privilege. I’m not aware of any such examples, but if they were out there, one would at least have to rethink the cost and benefits questions surrounding the privilege.

(As an aside, speaking of Watergate, I have it on good authority — from a reliable, confidential source — that Bob Woodward, Mr. Investigative Journalism himself, thinks the reporter’s privilege is unnecessary and a bad idea.)

Why should reporters go to jail for just doing their jobs?

They don’t. This is one of the greatest red herrings in the whole privilege debate, and everyone (on both sides of the argument) resorts to it.

In totalitarian countries, governments may throw journalists in jail for what they write. THAT’s a reporter going to jail for doing his or her job. That doesn’t happen in the U.S. and has nothing to do with the privilege debate. Judith Miller did not go to jail for anything she wrote, and James Risen was not facing the prospect of jail based on any of his reporting.

When reporters are jailed in privilege disputes, it is for contempt of court. They have refused to answer a question in a legal proceeding without a valid excuse. As a result, like any other witness, they may be jailed for contempt to try to coerce them into complying with the court’s order.

As an attorney, part of my job includes protecting client confidences, and the law recognizes the attorney-client privilege. But if a judge rules that the privilege does not apply in a given case and that I must testify about something a client told me, my obligation is to obey that court order. I don’t get to decide for myself what the law requires. If I defy the court’s order, I can be jailed for contempt until I comply.

All legal privileges, by definition, must exist within the framework of the legal system and the rule of law. That means that courts are the final arbiters of privilege questions. Individuals who defy lawful court orders are not “doing their jobs,” they are placing themselves above the law.

Many reporters feel so strongly about the privilege that they, like Judith Miller and James Risen, will refuse to testify no matter what a court says. This is also why passing a shield law will not keep reporters from going to jail. Assuming that any shield law passed by Congress would contain some exceptions, there will still be future cases where a Court rules that the privilege does not apply. In such a case, if the reporter still refuses to testify, he or she can still be jailed for contempt. Contrary to the claims of its supporters, therefore, a shield law will not keep reporters from being locked up.


Thanks to the National Judicial College for the enjoyable discussion. Those interested in taking a much deeper legal dive into these and other issues surrounding the reporter’s privilege can find law review articles that I’ve written here and here.

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From Speaker to Smurf: Examining the Charges Against Dennis Hastert

The criminal charges against Dennis Hastert include structuring and false statements

Former Speaker of the House Dennis Hastert

The criminal charges against former Speaker of the House Dennis Hastert have raised some interesting questions, including questions about whether the case should have been brought at all. Hastert was arraigned last week in Chicago on an indictment charging him with one count of illegal structuring of bank transactions and one count of lying to the FBI. Hastert served in Congress from 1981 to 2007 and was Speaker from 1999 to 2007.

The indictment charges that over several years Hastert withdrew large amounts of cash in order to make payments to someone identified only as “Individual A.” Hastert allegedly had agreed to pay Individual A $3.5 million to compensate for, and keep concealed, prior misconduct by Hastert against Individual A. Although the indictment does not reveal the nature of the misconduct, several news outlets have reported that it involved Hastert sexually abusing a male student when Hastert was working as a high school teacher and wrestling coach in Yorkville, Illinois between 1965 and 1981.

From June 2010 through April 2012, Hastert allegedly made fifteen separate withdrawals of $50,000 in cash from several different banks and gave that cash to Individual A. Federal regulations require banks and other financial institutions to report any cash transactions in excess of $10,000, and in April 2012 the banks apparently questioned Hastert about the large cash withdrawals.

After the banks started asking questions, Hastert allegedly began withdrawing cash in amounts just under $10,000, in order to avoid the bank reporting requirements. The indictment charges that he made at least 106 such withdrawals between 2012 and 2014, again providing all the cash to Individual A. Hastert is alleged to have paid a total of $1.7 million in cash to Individual A over more than four years.

In December 2014, the FBI interviewed Hastert concerning his unusual banking transactions. During that interview, Hastert told the FBI agents he made the withdrawals because he did not trust the banking system and that he was keeping the cash for his own use.


The Criminal Charges Against Dennis Hastert 

Structuring: The structuring statute that Hastert is charged with violating, 31 U.S.C. § 5324, is part of the system of laws and regulations used to combat money laundering. In today’s economy, legal transactions involving large amounts of currency are relatively rare. But certain kinds of criminal activity, such as narcotics trafficking and organized crime, may generate enormous quantities of cash.

Having all of this cash is no fun if you can’t spend it without arousing suspicion. Criminal operations therefore need to get their cash into the legal financial system and make it appear legitimate. That’s where the money laundering laws come in. Money laundering takes aim at criminal activity from a different direction: it focuses not on the crimes that generate the money but on trying to freeze criminal proceeds out of the banking system and make it impossible for criminals to enjoy the fruits of their illegal activity.

As part of this effort, banks are required to file a Currency Transaction Report (“CTR”) providing details about any cash transaction in excess of $10,000. This allows the government to track large flows of currency through the economy – not because dealing in cash is illegal, but because it is unusual and suggests potential criminal activity. The filing of a CTR does not mean a crime has been committed. It is simply a flag that something is going on that might merit a closer look.

Criminals would obviously prefer that CTRs not be filed, because they do not want to draw attention to themselves and their large, unexplained piles of cash. Thus the crime of structuring was born.

Suppose I am a drug dealer with $100,000 in cash from my illegal drug operations. I’d like to get that cash into a bank account so I could write checks, make wire transfers, and otherwise spend it without arousing suspicion. But if I take my duffel bag full of $100,000 in white-powder-encrusted tens and twenties and plop it down on the bank teller’s counter, people are (hopefully) going to start asking uncomfortable questions – not to mention filing CTRs.

One way I can avoid this problem is to get eleven of my associates to take $9,000 each and deposit the money in eleven different banks. No CTRs will be filed, and all of my money is now in the banking system ready for me to enjoy. This is the crime of structuring: designing your bank transactions specifically to avoid the filing of CTRs.  It applies to both deposits and withdrawals.

Structuring is also known as “smurfing,” from the cartoon involving those cute little blue creatures, “The Smurfs.” I’m not sure how this nickname arose, but it may have to do with the image of many people scurrying around town to different banks to make deposits, just as the Smurfs used to scurry around their little Smurf village doing . . . whatever Smurfs do.

Hastert appears to have been engaged in textbook smurfing. He was withdrawing $50,000 in cash at a time, until the bank started asking questions. Then he deliberately reduced the amount of his withdrawals to just under $10,000, in order to avoid any more questions and to avoid the filing of CTRs.

False Statements:  The other charge in the indictment is a violation of 18 U.S.C. § 1001, false statements. This is a widely-used white collar statute that prohibits knowingly providing material false information to the government. It differs from, and is much broader than, perjury, because statements do not need to be under oath. Lying to the FBI during an interview about something material to their investigation falls squarely within § 1001, and that is the basis of the charge against Hastert.

hastert headshot

Issues Raised by the Hastert Indictment

One thing I find remarkable about this and many other white collar cases is that an accomplished and savvy person – in this case, someone who for years was third in line to be U.S. President — ends up committing such a dumb crime. As a former Member of Congress, Hastert had to know that his cash transactions would raise flags. Even if he were determined not to leave a paper trail by simply writing checks, he could have used any number of more sophisticated and still secret ways to pay off Individual A. And when the FBI comes calling, why not decline to be interviewed, or simply call your lawyer? Is there some hidden, psychological desire to be caught involved here? If Dostoevsky were still around and had a blog, he’d have a field day.

An interesting question that remains unanswered is: how did the government learn about Individual A and his deal with Hastert? A bank report likely led the FBI to focus on Hastert’s financial transactions, but how did they progress from learning about the cash withdrawals to learning what Hastert was doing with the money? Did Individual A came forward independently (seems unlikely) to report the arrangement to the FBI? Did they tail Hastert and witness him making a payment to Individual A? Did they use phone records or some other investigative tool? We don’t yet know.

A related question concerns the treatment of Individual A by the prosecutors. Will he be charged with any crimes? Has he already pleaded guilty, with the proceeding under seal? Or did the government conclude that he committed no crime, or agree to grant him immunity?

Some have argued that Individual A was plainly guilty of blackmail or extortion, and some (including Hastert himself) have suggested that Hastert was a victim, too. But we would need to know a lot more about the dealings between Hastert and Individual A, and how their arrangement came about, before making such a judgment. A mutual, consensual agreement, similar to an out-of-court settlement, would not amount to extortion.

Although there are lots of questions, it appears we won’t learn much more about Individual A any time soon, if ever. Prosecutors apparently have sought a protective order to cover any information they provide to the defense, to ensure that no one not involved in the case can see the material. If prosecutors have some kind of agreement with Individual A, it appears to include preserving his privacy for as long as possible.

Another interesting aspect of the case is the somewhat unusual application of the structuring laws. The money involved in Hastert’s cash transactions was not generated by criminal activity; this was “clean” money that legitimately belonged to Hastert. To that extent, the structuring charge falls outside of the heartland of activity at which the statute was primarily aimed.

Nevertheless, Hastert’s actions are a clear-cut case of smurfing. Unlike some other money laundering statutes, structuring does not require that the money involved be criminal proceeds. The purpose of the law is simply to enable the government to track large flows of cash through the banking system. Structuring thwarts that government interest, whether the money is clean or dirty. Even if the source of the cash is perfectly legal, large withdrawals may be a sign of other criminal activity.

The government had legitimate reasons to be questioning Hastert’s cash withdrawals. The transactions could have indicated that he was being extorted, perhaps even over something related to his time in Congress, or that he was involved in some other kind of criminal activity.   That the government was asking these questions does not indicate any kind of overreach.

Should Hastert Have Been Prosecuted?

The issue then becomes whether, once the nature of the transactions was revealed, criminal charges should have been filed. In the wake of the indictment, some have questioned the decision to prosecute. They argue that Hastert appears to be a victim, that as a former powerful politician he has been unfairly singled out, and that the case is not a wise use of prosecutorial resources.

It’s certainly true that not every instance of structuring results in a criminal prosecution. And if every witness who lied to the FBI during an interview were charged with false statements, federal prosecutors would have time to do little else.

Deciding whether to file charges in such a case requires the sound exercise of prosecutorial discretion. On this point I agree with another former AUSA, Jeffrey Toobin, who wrote in the New Yorker that he would not have hesitated to bring this case.

A number of factors would enter into the charging decision. One would be the length of time and the number of violations – more than a hundred structured transactions over more than two years. This was not a one-off situation; Hastert knew what he was doing and did it repeatedly over a long period of time.

Another factor would be the nature of the misconduct that Hastert was concealing. Any sexual abuse that took place while he was a high school teacher could almost certainly not be prosecuted now due to the statute of limitations. But if Hastert committed more recent crimes in order to cover up that activity, prosecuting those crimes can serve the interests of justice.

Prosecution of cover-up crimes such as false statements or obstruction of justice does sometimes serve to ensure that defendants who committed crimes that are too old to be prosecuted do not entirely escape punishment. Particularly where the past criminal conduct was so egregious, that would weigh heavily in the decision about whether to prosecute. To me, at least, as a prosecutor this charging decision would feel very different if Hastert had been covering up past conduct that was legal but just embarrassing, such as an extra-marital affair.

Another factor in the charging equation would be Hastert’s outrageous lies to the FBI. This was not a hapless, unsophisticated defendant ensnared by some wily FBI agents. A former Member of Congress knew what he was doing, knew his legal options in terms of talking to the FBI, and knew the potential consequences of lying.

It’s also worth noting that the prosecutors, if they were truly vindictive and out of control, could have been a lot harder on Hastert. They likely could have charged him with more than 100 counts of structuring, one for each withdrawal. Instead they chose to charge the entire two-year structuring scheme as a single count, exposing him to a maximum of five years in prison for structuring rather than more than 500.

Personally I find it hard to feel sorry for Hastert. But to the extent the critics are correct and Hastert deserves some sympathy for the situation he was in, those considerations may be taken into account when it comes to sentencing, or in fashioning an appropriate plea agreement.  That doesn’t mean the charges themselves were not fully appropriate.

And finally, speaking of plea agreements, a quick guilty plea is by far the most likely outcome in this case. There’s not much in the way of a defense apparent from the indictment, and Hastert will almost certainly want to avoid a public trial where Individual A would testify about the past misconduct and their agreement. Hastert’s best chance to avoid that information becoming public is to take a quick plea.

But whether or not that happens, information like this has a way of coming to light. I expect before the case is over we will know a great deal more about Individual A and the circumstances that brought Hastert to this unhappy point.

Update 10/28/15:  Hastert today pleaded guilty to one count of structuring his banking transactions. 

Update 4/27/16: Hastert was sentenced today to fifteen months in prison, followed by two years of supervised release. He was also ordered to receive sex-offender treatments and pay $250,000 in fines. 

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Elonis v. United States: The Supreme Court Weighs In on Prosecuting Online Threats

At Anthony Elonis’ trial for making threatening posts on Facebook, the prosecutor told the jury it didn’t matter what Elonis actually intended, as long as a reasonable person would perceive his statements as a true threat.  In reversing Elonis’ convictions last week, the Supreme Court held that in a prosecution for threats proof of the defendant’s intent actually matters a great deal.  In Elonis’ case, that ended up spelling the difference between being a convicted felon and just being a jerk.

Elonis was an active Facebook user, with hundreds of “friends” and posting about a wide variety of topics.  In May of 2010 his wife left him, taking their two children with her.  After she left, Elonis began posting compositions of his own. These were often in the form of rap lyrics, and were frequently crude, graphic and violent.  He adopted a different Facebook user name, “Tone Dougie,” to use as his alter-ego for these “rapper” posts.

Along with the violent posts, Elonis frequently posted disclaimers saying they were merely “fictitious lyrics,” were for “entertainment purposes only,” or that he was simply exercising his First Amendment rights. He also regularly linked to things such as the Wikipedia entry on freedom of speech and other articles about the First Amendment.

In October 2010, Elonis lost his job after his employer perceived one of Elonis’ posts on Facebook to be a threat against another employee. After that, his Facebook posts became increasingly graphic and violent. One post about his wife read in part:

There’s one way to love ya but a thousand ways to kill ya

And I’m not gonna rest until your body is a mess,

Soaked in blood and dying from all the little cuts . . .

In November 2010, based on the threatening posts, Elonis’ wife obtained a protective order against him. A few days later, Elonis posted an almost word-for-word adaptation of a comedy sketch that he and his wife had watched together, in which a comedian explains it’s illegal to say you want to kill the President but not illegal to explain that it’s illegal to say that. The post read in part:

Did you know that it’s illegal for me to say I want to kill my wife?

It’s illegal.

It’s indirect criminal contempt.

It’s one of the only sentences that I’m not allowed to say.

Now it was okay for me to say it right then because I was just telling you that it’s illegal for me to say I want to kill my wife.

I’m not actually saying it. . . .

Elonis followed up this post with a statement that “Art is about pushing limits. I’m willing to go to jail for my constitutional rights. Are you?”

On November 16, Elonis posted the following:

That’s it, I’ve had enough.

I’m checking out and making a name for myself.

Enough elementary schools in a ten mile radius

To initiate the most heinous school shooting ever imagined.

And hell hath no fury like a crazy man in a kindergarten class.

The only question is . . . which one?

This post earned Elonis a visit from the FBI, during which he declined to be interviewed.   After the agent left, Elonis posted another item on Facebook he titled “Little Agent Lady” in which he falsely claimed he had been wearing a bomb when the agent came to his door and fantasized about killing her:

Took all the strength I had not to turn the bitch ghost

Pull my knife, flick my wrist, and slit her throat . . .

In all of these instances, Elonis posted only on his own Facebook wall. He was not Facebook friends with his wife, the FBI agent, or others who were the subjects of his posts, and he did not tag them.

Elonis ultimately was indicted on five counts of felony threats.  He testified at trial that his posts were “therapeutic” artistic expression that helped him deal with the emotional upheaval in his life, and that he never intended to threaten anyone.  He claimed many of his posts emulated lyrics by rappers he admired; for example, he testified that his post about the school was based on an Eminem song, I’m Back, in which the rapper fantasized about participating in the Columbine shooting.

His wife testified that she took the Facebook threats seriously and that they made her very afraid for herself and her children.  Other witnesses also testified they felt afraid and viewed the posts as serious threats.

The trial court, relying on the rule in the majority of circuits at the time, told the jury they only needed to find that Elonis intended to make the statements and that a reasonable person, looking at the statements, would consider them to be a real threat.  The judge rejected Elonis’ request for an instruction that the jury had to find he acted with the purpose of placing his victims in fear.  

The jury convicted Elonis on four counts of threats, one each for threatening his wife, the police, the school, and the FBI agent. He was sentenced to 44 months in prison, which he served while his appeals were pending.


When Are Online Threats a Crime?

The issue in Elonis was not whether threats on social media may ever be prosecuted. It’s settled that “true threats” fall into the narrow category of speech not protected by the First Amendment, along with obscenity, defamation, and “fighting words” that incite violence. The issue was what the government has to prove about the defendant’s state of mind to establish that the statements at issue were indeed “true threats.”

Elonis was convicted of violating 18 U.S.C. §875(c), which provides:

Whoever transmits in interstate or foreign commerce any communication containing any threat to kidnap any person or any threat to injure the person of another, shall be fined under this title or imprisoned not more than five years, or both.

On its face the statute simply requires transmission of the threats and does not say anything about the defendant’s state of mind. During the Supreme Court argument four possible standards emerged (in decreasing order of the level of proof required):

1) The defendant personally intended that the statements would place the target of his threats in fear. (The standard argued for by Elonis.)

2) The defendant knew that a reasonable person, looking at the statements, would be placed in fear of being harmed.

3) The defendant knowingly made the statements with a reckless disregard for whether the recipient would be placed in fear of being harmed.

4) The defendant knowingly made the statements, and regardless of what the defendant personally knew or intended about their effect, a reasonable person looking at those statements would think they were a serious expression of an intent to harm another. (The standard adopted by the lower courts and most other courts, and argued for by the government.)

The issue before the Supreme Court boiled down to which of these standards should be the law. 

Writing for the seven-member majority, Chief Justice Roberts noted that although no intent is specified in the statute, that does not mean intent is not required.  It’s an old criminal law principle that convictions generally require proof the defendant knew his conduct was blameworthy; crimes (as opposed to torts or other civil harms) require both a bad act (actus reus) and wrongful intent (mens rea).  Put another way, a criminal conviction generally requires both an evil hand and an evil heart. 

Roberts discussed several of the Court’s prior decisions where defendants engaged in a bad act (such as selling drug paraphernalia or distributing child pornography) but their criminal convictions were reversed because there was no proof they knew the critical facts that made their conduct illegal (that the products could actually be used to ingest drugs, or that the models in the pornography were actually underage).  A defendant does not need to know that his conduct violates a particular statute – the principle that ignorance of the law is no excuse still generally applies.  But he does have to have knowledge of all of the facts that make the conduct unlawful.

Turning to the threats statute, the Court noted that both sides agreed the defendant had to know he was making a communication, but “communicating something is not what makes the conduct ‘wrongful.’” To prove the requisite intent, the government must show that the defendant actually knew not just that he made a communication, but that the communication contained a “threat.”  That means the defendant at a minimum had to know the statement would put a reasonable person in fear, because that is what makes a communication a threat as opposed to, for example, an insult or a compliment.  

Elonis, however, was convicted based not on what he personally knew, but based only on whether an objective reasonable person, looking at his posts, would have considered them to be threats.  That, the Court said, is a negligence standard – common in tort law, but generally not a basis for criminal liability.  “Federal criminal liability,” the Court noted,  “generally does not turn solely on the results of an act without considering the defendant’s mental state.” As a result, Elonis’ convictions could not stand.

Concurring in part and dissenting in part, Justice Alito agreed that Elonis could not be convicted based solely on the reasonable person standard, but took the majority to task for failing to decide whether recklessness was sufficient to violate the statute.  He argued it was irresponsible for the Court to leave lower courts uncertain as to what standard should apply.  Justice Alito concluded that under general criminal law principles proof of recklessness should be sufficient to establish wrongful intent by the defendant, and that the Court should have said so.

Justice Thomas dissented.  He too complained that the Court had rejected the general intent or negligence standard but had left nothing concrete in its place to guide the lower courts.  He argued that the standard applied by the lower courts was correct and that Elonis’ convictions should be upheld.


Effect of the Elonis Opinion

The Court’s decision is actually quite narrow.  Elonis had argued that the First Amendment required the government to prove he specifically intended to put his victims in fear. But the Court didn’t reach the constitutional question at all, instead relying on the narrower ground of statutory interpretation.

As Justices Alito and Thomas pointed out, the Court didn’t clearly rule on what state of mind is sufficient to violate the threats statute.  It simply held that the negligence standard under which Elonis was convicted was not enough.  It is left to future courts and future cases to further flesh out the precise legal requirements under the statute. 

But despite the narrowness of the rationale, the decision is a welcome development.  There’s no doubt that Elonis’ conduct was deplorable and troubling.  But more troubling still would be the idea that the government could throw someone in jail based only on something they wrote, without having to prove anything about their underlying state of mind.

Although it was not a constitutional opinion, the case has strong First Amendment overtones. When it comes to online communications, it’s particularly important to have legal standards that ensure protected speech does not end up being prosecuted. Things like e-mails and Facebook posts suffer from an inability to convey nuance, tone, inflection, facial expression, body language – all things that can be critical to determining a speaker’s true meaning in face-to-face communication.

In this world of online communication there is a lot of room for misunderstanding and misinterpretation. Most of us have had the experience of sending an e-mail or posting something that was intended to be sarcastic or funny but was perceived as serious, or vice-versa. Indeed, a whole world of “emoticons” has sprung up to help overcome this problem and associate emotion or attitude with the digital written word.  Mere words on a cold page—or on a screen—cannot convey all of the nuance and subtlety that make up human communication.

When it comes to the meaning of speech, context is everything. Violent rap lyrics that no one would perceive as a threat in the context of a stage performance could most definitely be a threat if whispered menacingly into the ear of another person. But a post on one’s own Facebook wall is a semi-public statement that may be viewed and shared by many.  Is that closer to a public performance, or to a menacing whisper? 

When it comes to Elonis’ posts, it’s hard to argue they have much redeeming social value. His claim that his posts were simply examples of artistic expression seems far-fetched. Nevertheless, the heart of the First Amendment is the protection of even speech that many consider vile or offensive – freedom of speech includes freedom for speech that most of us hate. It’s important that the law leave some breathing room for controversial expression. 

Groups concerned about issues such as domestic violence had filed briefs expressing concern about the consequences of overturning Elonis’ convictions.  But the decision doesn’t mean someone like Elonis may never be prosecuted. If the jury had been properly instructed about what they had to find concerning Elonis’ mental state, they may well have convicted him anyway.  Even now the government could choose to re-try him, although considering he already has served his sentence the government may conclude it is not a good use of resources.

Elonis therefore is not a “get out of jail free” card for future stalkers and harassers.  Proving intent or knowledge is not some kind of insurmountable hurdle; prosecutors do it all the time. As in any case, knowledge may be proven by circumstantial evidence, even if direct evidence is not available.  And if a defendant tries to dress up his threats by claiming they are just “artistic expression,” a jury is fully capable of assessing the credibility of that defense. 

Imposing a state of mind requirement isn’t about condoning Elonis’ reprehensible conduct, it’s simply about strictly interpreting statutes that potentially criminalize speech. Elonis means that future threats prosecutions will be a bit more difficult, but that’s not a bad thing.  Given our First Amendment heritage and devotion to free expression, it’s not too much to ask that the government prove some level of intent when seeking to send someone to jail solely for what they wrote.

Update 10/28/16: Today the Third Circuit reinstated Elonis’ conviction, finding that the error in the jury instructions was harmless and that he would have been convicted even under the test adopted by the Supreme Court. Another case of a defendant who won the battle but lost the war.

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Charges and Issues in the FIFA Indictment

Trying to wade through the indictment in the FIFA criminal case is a bit like reading a Game of Thrones novel: there are so many different characters, schemes, kingdoms and sub-plots that it’s easy to become lost.

The 161-page, 47-count federal indictment was unsealed in the Eastern District of New York last week.  (The DOJ press release and a link to the indictment can be found here.)  It alleges a more than twenty-year history of rampant corruption within the Federation Internationale de Football Association (FIFA), the global soccer organization based in Switzerland.

FIFA’s mission is to develop and promote the sport of soccer internationally. There are 209 member associations, each representing soccer in a particular territory or country.  The individual member associations are grouped into six continental confederate organizations, each of which assists with governing soccer in a different area of the world. For example, CONCACAF, the North American organization, is a major focus of the indictment. It has forty-one members, including the United States Soccer Federation, and is headquartered in Miami.

The indictment charges fourteen defendants: nine current and former FIFA officials, four sports marketing executives, and one man who acted as an intermediary. (A helpful summary describing the different defendants can be found here.)  In addition to the fourteen defendants, the indictment names twenty-five unindicted co-conspirators and describes no fewer than twelve different corruption schemes taking place around the world over the past two decades. FIFA officials are alleged to have accepted more than $150 million in bribes in exchange for being influenced in awarding lucrative marketing and television contracts, rigging FIFA elections, and awarding the right to host soccer’s premier event, the World Cup.

FIFA logo: the FIFA criminal case alleges a global corruption conspiracy

The FIFA Criminal Case

Although it’s lengthy, the bulk of the charges in the indictment fall into only three categories:

  • The Racketeer Influenced and Corrupt Organizations Act (RICO)
  • Money laundering and money laundering conspiracy
  • Wire fraud and wire fraud conspiracy

RICO:  The heart of the indictment is an overarching and massive RICO conspiracy lasting more than twenty years and including all fourteen defendants. RICO was passed in the early 1970’s as part of the effort to battle organized crime. It doesn’t really define a new crime so much as criminalize ongoing and organized patterns of already criminal behavior. Over the years, as a result of its expansive language and some equally expansive Supreme Court decisions, RICO has become essentially a glorified conspiracy statute — although considering its twenty-year penalty and provision for forfeiture, maybe it’s more accurate to call RICO conspiracy on steroids.

The use of RICO in white collar cases is sometimes criticized as unnecessary and heavy-handed; a statute aimed at bringing down the mafia does not really seem called for in most white collar crimes. But the scope and magnitude of the FIFA corruption makes it an ideal RICO case. The powerful RICO statute allows the prosecution to bring in all members of a global criminal conspiracy, along with evidence of the criminal acts they committed all around the world, and prosecute everything in a single location.  Although FIFA, unlike an organized crime family, is not primarily a criminal organization, the scope and depth of the alleged criminal conduct makes it the type of case for which RICO was born.

RICO requires that the defendants participate in the conduct of the affairs of an “enterprise” through a “pattern of racketeering activity.” The enterprise may be a single legal entity, such as a corporation, or it may be a group of individuals or entities “associated in fact” for a common purpose.  In this case, the government has alleged that FIFA and its six continental confederate organizations together form an “association in fact” enterprise, bound together by their common mission of promoting soccer around the world. (Considering FIFA’s global reach, this must be one of the most sweeping RICO enterprises ever charged.)

The “pattern of racketeering activity” element requires that the defendants participated in the conduct of the enterprise’s affairs through a sustained pattern of criminal acts. Here the government charges that the pattern consisted primarily of three types of crimes: bribery and kickbacks, wire fraud, and money laundering.

Wire fraud and wire fraud conspiracy: At its core, the FIFA case is about bribery. But the federal bribery statute applies only to federal government officials and those acting on the government’s behalf. FIFA is a private organization, and even FIFA officials located within the United States would not be covered by the federal bribery law.

Accordingly, to charge bribery of officials within a private sector organization, the indictment relies on honest services wire fraud. The wire fraud statute criminalizes the use of an interstate wire or wireless transmission in furtherance of a “scheme or artifice to defraud.” This commonly involves a scheme to obtain money or property from a victim. However, wire fraud also may be used to charge a defendant who engages in a scheme to deprive another of the intangible right of “honest services.”  Honest services fraud is a popular vehicle for charging bribery involving state or local public officials, as well as private sector bribery.

A duty of honest services arises when there is a relationship of trust and responsibility between the parties that gives rise to special obligations of loyalty and candor that do not arise in ordinary contractual or arms-length relationships. The most common private sector example is the duty of honest services that an employee owes to an employer. Those who accept bribes in exchange for violating that duty may be found to have committed honest services fraud.  (For a more detailed discussion of the law of honest services fraud, see my earlier post here.)

The FIFA officials are charged with violating the duty of honest services that they owed to FIFA and its member organizations by accepting bribe payments in exchange for the exercise of their official powers concerning the awarding of contracts for sports marketing and other decisions. The non-FIFA defendants, as the bribe payers, are similarly charged with causing the FIFA defendants to violate those duties. As a legal matter this is a relatively straightforward application of honest services fraud. There is little doubt that FIFA officials did owe a duty of honest services to the organization, and if they did accept the bribes as alleged it would be a clear violation of that duty.

Wire fraud also requires that there be a wire or wireless transmission in furtherance of the fraud. The indictment relies primarily on bank wire transfers, many of them international and involving U.S. banks, that allegedly were used to facilitate the bribe payments.

Money laundering and money laundering conspiracy:  The money laundering statutes prohibit engaging in financial transactions involving criminal proceeds in order to conceal the nature, origin, source, or ownership of those proceeds, and also prohibit transporting fund across the U.S. border in order to promote certain kinds of criminal activity. The FIFA indictment charges many of the defendants with both kinds of money laundering: they are accused of using various intermediaries, secret bank accounts, shell companies, and other methods to disguise the source and ownership of various bribe payments, and with transmitting funds across the U.S. border to promote their underlying criminal activity of wire fraud.

Once again, if the allegations of the indictment are true, these seem like strong and uncontroversial money laundering charges.

Other charges: Eugenio Figueredo, a current FIFA vice president, alone is charged with falsifying documents in connection with his application for U.S. citizenship and with five counts of tax fraud. And Aaron Davidson, a sports marketing executive, alone is charged with one count of obstruction of justice for alerting other co-conspirators during the grand jury investigation to the possibility that their conversations were being recorded.


Other Issues and Questions in the FIFA Case

On the same day the indictment was unsealed, the government also unsealed the guilty pleas and criminal charges of four other individual defendants and two corporations. These guilty pleas date back to mid-2013 and had remained under seal. That suggests the defendants who pleaded guilty likely were cooperating in the investigation for some time, including recording conversations with their co-conspirators. Such evidence can be crucial to building a complicated conspiracy cases and will be very important at trial.

A case this large will take some time to unfold. Seven of the defendants were arrested in Switzerland at the same time the indictment was being unsealed in the United States, and the process of extraditing those defendants alone could take months. One would also expect a number of additional guilty pleas, as other co-conspirators seek to cooperate with the prosecution and reduce their own potential criminal exposure.

It’s noteworthy that the FIFA case is being prosecuted in the United States.  Most of the defendants are not U.S. citizens, and much of the alleged criminal activity took place in other countries. Soccer is not nearly as big in the U.S. as it is in much of the world. One could argue that FIFA corruption should not really be a U.S. priority. But this appears to be one of those, “If not us, then who?” situations – most of the other nations affected simply could not hope to bring such a case. FIFA affects hundreds of millions of people and billions of dollars of economic activity world-wide, and although the corruption was deplored for years, nothing much had been done about it. It took the prosecutorial chops and criminal laws of the U.S. finally to put together such a massive global prosecution.

(As an aside, the Swiss government has opened a separate investigation into allegations of corruption in connection with the selection of the sites for the next two World Cups – Russia in 2018 and Qatar in 2022.  There were immediate cries of foul after the selection of Qatar, a country with a spotty record on human rights and where it gets so hot during World Cup season that soccer balls — not to mention soccer players — are known to melt spontaneously.  It’s hard to understand such a choice unless someone was getting paid off. These specific allegations are not, however, part of the U.S. indictment.)

The Department of Justice has been pretty aggressive in recent years about asserting jurisdiction over criminal acts that took place in other countries, particularly in cases involving terrorism and the Foreign Corrupt Practices Act. That expansive assertion of extraterritorial jurisdiction  has been criticized on occasion. In this case, though, because so many of the corrupt payments went through the U.S. banking system and because of CONCACAF’s location in the U.S., there should be little question about the appropriateness of U.S. criminal jurisdiction.

What I find more interesting is the question of where within the U.S. the case is being prosecuted. The case was investigated and indicted in the Eastern District of New York, the district that covers Long Island and where the new Attorney General, Loretta Lynch, previously served as U.S. Attorney. I’ve seen some commentary suggesting that the E.D.N.Y may have been awarded the case based on its relationship with the new Attorney General, but that doesn’t make much sense. This investigation had been going on in that district for several years, long before anyone knew that Ms. Lynch would be the Attorney General. It’s not as though she moved to D.C. and then decided to hand the prosecution to her former colleagues.

But reviewing the indictment, one is left to wonder how exactly the case ended up where it did. Proper venue in criminal cases is not just a matter of convenience or choice; the Constitution requires that criminal cases be brought in the state in which the offense took place. So although the U.S. may have federal criminal jurisdiction, the question remains which court or courts within the U.S. would have venue.

It appears there would be several other, more logical venues than the E.D.N.Y. For example, CONCACAF, the North American FIFA federation, has its headquarters in Miami (and the FBI executed a search warrant there the day the indictment was unsealed). A number of the bank wire transfers that form the basis of the wire fraud charges also went through Miami banks, and meetings of conspirators and other events are alleged to have taken place there as well. The Southern District of Florida seems a much more logical location for the case.

The Southern District of New York in Manhattan, right next door to the E.D.N.Y., would be another likely venue. When jurisdiction is based in large part on use of the U.S. banking system, the Southern District, as the nation’s financial capital, is often the forum of choice.

The indictment is pretty vague concerning what relationship there is between Brooklyn (the heart of the Eastern District of New York) and the actions of the FIFA co-conspirators. For RICO and the other conspiracy charges, as long as there is at least one overt act in furtherance of the conspiracy within the E.D.N.Y, venue should not be an issue. But for some of the non-conspiracy charges it’s not at all clear on the face of the indictment why venue is proper in the Eastern District of New York.

In some circumstances, if criminal acts do not fall within the jurisdiction of any particular state, venue will be considered proper in any district in which the defendant is first arrested or brought.  Perhaps the government hopes to rely on this argument by ensuring that when the defendants arrested in Switzerland are extradited to the U.S. their plane lands at JFK or LaGuardia – both of which are within the E.D.N.Y.  But it’s unclear whether that argument would be successful.

It’s possible the case ended up where it is partly by accident. The New York Times reported that the case originally arose out of an unrelated investigation in New York concerning Russian organized crime. Perhaps that original unrelated case had a clearer connection to Brooklyn, but once the prosecutors started focusing on the FIFA allegations that emerged they were reluctant to give the case up. Or perhaps, as sometimes happens, there was a “turf battle” between different U.S. Attorney’s offices over which should take the case, and the E.D.N.Y. prevailed. In any event, it’s going to be interesting to see whether any of these venue issues end up forming the basis for defense motions and possible trouble for the prosecution.

*  *  *

It will be fascinating to watch how the FIFA case plays out over the months to come.  For now, the indictment tells a remarkable and gripping tale of worldwide greed and corruption.  Maybe HBO will turn it into a television series — all it needs is a little gratuitous sex and violence.  And maybe a dragon.


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