Michael Flynn Took the Fifth – So What Happens Now?

Yesterday former National Security Advisor Michael Flynn informed the Senate Intelligence Committee he will not comply with its subpoena. The subpoena sought any documents in Flynn’s possession relating to any communications or dealings with Russian officials. Through his attorneys, Flynn claimed that turning over the documents would violate his Fifth Amendment privilege against self-incrimination.

Now that Flynn has taken the Fifth, what happens next? Basically there are three alternatives: 1) the Senate challenges the claim of privilege; 2) the Senate grants Flynn immunity; or 3) the Senate decides to accept Flynn’s assertion of privilege and move on with its investigation.

But the Chair of the Senate Intelligence Committee has reportedly expressed surprise that Flynn could take the Fifth in connection with a subpoena for documents. So the first question is:

Can He Do That?

No one has a right simply to refuse to comply with a subpoena. Flynn can’t just say, “No, thanks” and refuse to turn over the documents. He has to have a valid legal excuse. In this case, he claims that excuse is his Fifth Amendment right not to incriminate himself.

Flynn had already asserted the Fifth in connection with any possible testimony before Congress. Weeks ago he indicated he would cooperate and testify only if he was granted immunity. So far Congress has not taken him up on that offer.

But when it comes to producing documents, rather than testifying, the rules are more complicated. The Fifth Amendment generally does not protect the contents of documents that were voluntarily created. Suppose I write in my diary, “I shot the Sheriff, but I did not shoot the deputy.” Then I lose the diary and someone turns it in to the authorities, or investigators seize the diary while executing a search warrant.

The contents of the diary certainly incriminate me. But I can’t claim a Fifth Amendment right not to have it used against me. The government did not compel me to write in my diary. The Fifth Amendment limits only government compulsion of testimony and so does not apply.

Act of Production Privilege

When it comes to producing documents, the Fifth Amendment protection is not based on the contents of those documents. It’s based on something called “act of production privilege.” Act of production privilege recognizes there may be testimonial aspects involved in producing documents that are subpoenaed.

If I turn over subpoenaed documents I am admitting the documents exist, that I have them, and that I believe they are responsive to the subpoena. Forcing me to respond to the subpoena may be akin to putting me on the stand and requiring me to make those admissions. In that situation I may be able to refuse to comply, because to comply would be to incriminate myself.

Act of production privilege does not automatically apply to any document subpoena. If the government can establish that the existence of the records is a foregone conclusion – in other words, anyone in my position would be expected to have the types of records called for – it can argue there is nothing testimonial about turning them over. In addition, sometimes the government can show with some specificity that it already knows the documents exist and that I have them. In that case, the act of producing them adds nothing to the government’s knowledge and would not be privileged.

But sometimes the government knows little or nothing about the nature of potential documents or whether they even exist and is just fishing to see what’s out there. In such a case, responding to the subpoena by identifying and turning over documents may be a testimonial act.

Congress is investigating Flynn over possible contacts with Russian officials and for allegedly lying about those contacts. Documents reflecting any such contacts are therefore potentially incriminating. His attorneys argue the Senate has failed to demonstrate that the existence of the subpoenaed documents is a foregone conclusion or that the Senate already knows the documents exist. Accordingly, they say, to turn over any such documents would be a privileged testimonial act.

So now that Flynn has taken the Fifth and refused to turn over the documents, where does the investigation go from here?

Michael Flynn has invoked the Fifth Amendment

Former Nat’l Security Advisor Michael Flynn

Option One: Fighting the Privilege Claim

Congress is not required to accept Flynn’s assertion of privilege at face value. If the Senate believes the privilege claim is unfounded, if can seek to enforce the subpoena. The Senate Committee leaders have reportedly said they will “vigorously pursue” the production of the documents. There are different ways the Senate could do this.

One alternative is for the Senate to file a civil lawsuit against Flynn seeking to enforce the subpoena. In the lawsuit Flynn would assert his Fifth Amendment claim as a defense, and a judge would rule on whether that claim was valid. If Flynn lost, he could appeal. If he lost again, he could ask the Supreme Court to hear the case. In the end, if the courts found there was no privilege, a judge would order Flynn to comply with the subpoena. If he still refused, he could be punished for contempt of court.

A second alternative is for the Senate to refer the matter to the U.S. Attorney for the District of Columbia and ask him to prosecute Flynn for criminal contempt of Congress. After receiving the referral, the U.S. Attorney would decide whether to pursue the contempt case. If the U.S. Attorney chose to indict Flynn for contempt of Congress, Flynn’s defense would be that the Fifth Amendment justified his refusal to comply. Once again, the courts would ultimately rule on that claim.

The U.S. Attorney could also decide that Flynn’s Fifth Amendment claim is valid and prosecution for contempt would not be appropriate. This happened recently in the case of Lois Lerner, a former IRS official. When she took the Fifth and refused to testify before a Congressional committee about claims the IRS had improperly targeted certain political groups, Congress referred the matter to the U.S. Attorney for a contempt prosecution. The U.S. Attorney, however, decided that Lerner’s privilege claim was justified and declined to bring a case. (You can find my post with more detail about contempt of Congress and the Lerner case here.)

A referral to the U.S. Attorney turns control of the contempt decision over to the Executive Branch. But a third option is for Congress to charge Flynn itself, using its own inherent contempt power. Although this inherent contempt power is well established, Congress hasn’t used it since the 1930s.

If the Senate chose to go this route there would be a hearing before Congress, similar to a trial. Flynn would appear, be represented by counsel, and would assert his Fifth Amendment privilege as his justification for not honoring the subpoena.

If Congress rejected Flynn’s privilege claim and found him in contempt, it could have Flynn jailed until he complied with the subpoena. If that happened, of course, Flynn’s lawyers would immediately go to court seeking to have his Fifth Amendment rights vindicated and to have Flynn released. So once again we would ultimately end up with a court ruling on whether the privilege claim is valid.

These three options for enforcing the subpoena have one thing in common: none of them are quick. With court hearings and appeals it could easily take many months to resolve the privilege claims. If the Senate’s primary goal is to get the information quickly, it could instead pursue option two: granting Flynn immunity.

Option Two: Immunizing Flynn

Rather than fighting the privilege claim, the Senate could choose to grant Flynn immunity for his production of the documents. The immunity order would provide that the testimonial aspects of Flynn turning over the documents could not be used against him. In other words, the government could not introduce into evidence the fact that Flynn had possessed the documents or that he turned them over in response to a subpoena.

This more limited type of immunity is called, reasonably enough, act of production immunity. As with immunity generally, Congress has the power to grant act of production immunity even if the Department of Justice objects. Two-thirds of the members of the Senate Intelligence Committee would need to approve.

If granted act of production immunity Flynn would no longer have a basis to withhold the documents. If he continued to refuse to comply with the subpoena he would face contempt charges and could be jailed until he complied.

Immunizing Flynn would mean Congress would get the documents quickly, but there is a risk. The grant of immunity could end up torpedoing a future criminal prosecution of Flynn if a court found that the prosecution relied on information gathered from the documents produced. This happened in a case involving Webb Hubbell, President Bill Clinton’s former Associate Attorney General. Hubbell’s prosecution resulted in the leading Supreme Court decision on act of production immunity.

The Supreme Court ruled on act of production immunity in Webb Hubbell's case.

Former Associate Attorney General Webster Hubbell

United States v. Hubbell

Hubbell was subpoenaed by the Whitewater Independent Counsel to produce a large number of documents to the grand jury. He asserted his Fifth Amendment act of production privilege and refused to produce the requested documents or even admit they existed. The prosecutors granted him immunity for the act of production, and Hubbell turned over more than 13,000 pages of responsive documents.

Based on information contained in the documents, the Independent Counsel later indicted Hubbell for tax crimes and fraud. But the Supreme Court threw out the indictment, saying it violated Hubbell’s Fifth Amendment rights.

The government did not seek to use evidence that Hubbell had possessed or produced the documents – that direct evidence would have violated the immunity order. But the contents of the documents had provided information that led to Hubbell’s indictment.

The Supreme Court held that by compelling Hubbell to assemble and produce documents responsive to the subpoena the government had made use of the “contents of his mind.” The government had only learned of the information in the documents as a result of that compulsion. Therefore using the contents of the documents to prosecute Hubbell was a prohibited “derivative use” of Hubbell’s immunized act of producing them.

The law on act of production immunity is not completely clear. And this case would be different from Hubbell’s in at least one important respect. In Hubbell the documents were subpoenaed by the same grand jury that later indicted him. In Flynn’s case Congress has issued the subpoena. That would make it easier for prosecutors to argue that their own investigation was not influenced by the documents. However, given how easily information spreads through the Internet (and how easily it leaks from Capitol Hill), it might be a challenge for prosecutors to prove their case was not tainted.

Congress could decide it is willing to take that risk in order to get the information quickly. They have done it before, most famously in the case of Oliver North during the Iran-Contra investigation, where Congress’s grant of immunity ultimately resulted in North’s criminal convictions being reversed. But by granting immunity Congress could end up begin accused of sabotaging any potential future criminal case against Flynn. For now, at least, the chair of the Senate Intelligence Committee has reportedly said that immunity is “off the table.”

Option Three: Just Move Along

The third option for Congress at this point is simply to accept Flynn’s assertion of privilege and move on. There is a great deal of investigating still to be done. Congress may be able to get much of the same information from other sources.

In addition to the investigations on Capitol Hill, the Special Counsel investigation will be moving forward. Criminal prosecutors may be able to build a case against Flynn without the subpoenaed documents. If Flynn were to end up facing charges, prosecutors could potentially negotiate a plea deal. As part of that deal Flynn could agree to turn over the documents and otherwise cooperate in the investigation of others.

Although there is public pressure to get to the bottom of what happened, the investigation is still in its infancy. Granting immunity could end up being a mistake if Flynn turns out to be one of the principal bad actors. Congress and the Special Counsel have plenty of time to pursue other avenues.

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Did President Trump Obstruct Justice? A Prosecution Analysis

Did President Trump obstruct justice? On May 9, 2017, the President fired FBI Director James Comey. This unexpected move immediately raised questions about the President’s motives. Critics charged that Trump was seeking to derail the FBI investigation into possible Russian ties to the Trump campaign.

Then, a week after Comey was sacked, substantial fuel was added to the obstruction fire. The New York Times reported that in a private meeting in February President Trump asked Comey to drop the investigation of former National Security Advisor Michael Flynn. Comey apparently prepared a memo memorializing this meeting. Comey wrote that Trump told him Flynn was a “good guy” who didn’t do anything wrong, and said , “I hope you can see your way clear to letting this go, to letting Flynn go.”

Additional news continues to trickle out. On May 19 the New York Times reported that in a meeting in the Oval Office with Russian officials the President told them, “I just fired the head of the F.B.I. He was crazy, a real nut job.” Trump also reportedly told the Russian officials, “I faced great pressure because of Russia. That’s taken off.”

Then on May 22, the Washington Post reported that Trump had asked the director of national intelligence and the director of the National Security Agency to publicly deny there was any evidence of collusion between Russian officials and the Trump campaign. Both refused to do so because they felt the request was inappropriate. Later in the same story, the Post reported that senior White House officials also had approached top intelligence officials to ask whether it was possible to ask Comey to shut down the FBI investigation.

“Obstruction of justice” is a term that gets tossed around fairly loosely. The op-ed pages and Twitter have been pronouncing Trump guilty for days. But the crime of obstruction of justice has specific requirements that can be difficult to prove. A federal prosecutor analyzing this as a criminal case would face some hurdles, although the case grows stronger with each new revelation. But in the end, political remedies — including potential impeachment — are more likely than criminal ones.

The Criminal Obstruction Statutes

Several different criminal statutes prohibit obstruction of justice. There are other options, but if I were considering this case I would focus on 18 U.S.C. § 1512(c)(2). This catch-all provision applies to anyone who “corruptly obstructs, influences, or impedes any official proceeding, or attempts to do so.” The maximum penalty is twenty years in prison.

Obstruction is a crime independent of the merits of any underlying case. Even if an investigation doesn’t result in criminal charges, you can get in trouble for obstructing that investigation – just ask Scooter Libby or Martha Stewart. As the old saying goes, sometimes the cover-up is worse than the crime.

The statute applies to attempts to obstruct a proceeding even if they are unsuccessful. If the investigation into Russian ties continued unimpeded, that would not be a defense to any attempted obstruction.

What Is the Relevant Proceeding?

In any obstruction case, the first task is to identify the proceeding the defendant was allegedly trying to obstruct. There is no such thing as “obstruction in the air.” The government must prove the defendant had a particular proceeding in mind, even if that proceeding had not yet begun. (The prosecution’s failure to prove the link to a specific proceeding is what led the judge in the Bob and Maureen McDonnell case to throw out her obstruction conviction.)

Under § 1512 a proceeding may be a matter before any of the three branches of the federal government. A trial or other court proceeding, a Congressional investigation, or a proceeding before a federal agency all may qualify.

You generally can’t be charged with obstructing an FBI investigation itself, because an investigation is not a “proceeding.” A different obstruction statute, 18 U.S.C. § 1519, could apply if Trump destroyed documents or records (or Oval Office tape recordings?) to impede the FBI investigation. But firing Comey or urging him to drop the case would not fall within that prohibition.

Removing the FBI director might have some tangential effect on the ongoing Congressional investigations, which qualify as proceedings. But the most likely theory would be that Trump, by urging Comey to drop the investigation and then firing him when that didn’t happen, was attempting to impede the pending grand jury investigation into possible Russian connections to his campaign.

There were recent news reports that a federal grand jury has issued subpoenas for records related to Michael Flynn. There appears to be an active grand jury investigation, and there is probably little doubt the President is aware of it. A grand jury investigation is a “proceeding” for purposes of 1512.

This is a link made in many obstruction cases. The FBI investigates, but it can’t file charges and prosecute on its own. In a criminal case the FBI typically is working with federal prosecutors conducting a grand jury investigation. Often when people speak of obstructing an FBI investigation, what they really mean is obstructing the underlying grand jury proceeding in which the FBI is involved.

Prosecutors could charge that Trump sought to impede the grand jury investigation by persuading Comey to drop the case and, when that failed, by firing him. The government would bear the burden of proving Trump  had the grand jury investigation in mind when he took those actions.

Did President Trump obstruct justice by firing Comey?

Former FBI Director James Comey

Did President Trump Obstruct Justice?

As in so many white collar cases, the critical issue would be proving intent. Corrupt intent is the key to obstruction of justice. It means the defendant acted with the deliberate and dishonest purpose of interfering with the proceeding. In other words, wrongfully obstructing the proceeding is what he set out to do. It isn’t enough if the proceeding is affected as a collateral or unintended consequence of the defendant’s actions.

How would a prosecutor prove the President’s intent? One remarkable aspect of this case is the significance of the President’s own statements. During his recent interview with Lester Holt of NBC news, the President admitted he was thinking about the “Russia thing,” which he called a “made up story,” when he decided to fire Comey. This admission could get prosecutors over what is sometimes a significant hurdle: proving the defendant at least had the relevant proceeding in mind.

The day after firing Comey, the President reportedly told Russian officials that he had faced “pressure” over Russia and that firing Comey had removed that pressure. The defense would dispute exactly what the President meant by this, but at a minimum it is further evidence that Comey’s firing was linked in the President’s mind to the Russia investigation.

Building a Circumstantial Case

Prosecutors often prove corrupt intent by circumstantial evidence. In this case, there is no shortage of it. First, the timing of Comey’s firing is suspicious. Most of the misdeeds for which he allegedly was fired have been known for months. But the President chose to remove him only when the Russia investigation was reportedly heating up.

Reasons for the firing also seem suspect. The White House claims Comey was fired over his handling of  the Hillary Clinton email scandal. But as many have noted, the President previously praised Comey for those same actions, often while his crowds chanted, “Lock her up!” The claim the President fired Comey now for actions he took six months ago is perhaps implausible. But the notion that this President fired Comey because Comey was unfair to Hillary Clinton is laughable.

The White House also claimed the firing was necessary because Comey had lost the support and confidence of the rank and file members of the FBI. This was flatly contradicted by the now-acting director and Comey’s former chief deputy, Andrew McCabe, in testimony before the Senate Intelligence committee.

Then there is the shifting narrative about how the decision was made. The White House originally claimed the President acted based on a recommendation from newly-appointed Deputy Attorney General Rod Rosenstein. When Rosenstein apparently objected (and perhaps threatened to resign), the President began saying he had decided to fire Comey on his own, prior to any recommendation.

Conflicting, shifting, and apparently untrue explanations for the President’s actions could provide compelling circumstantial evidence of corrupt intent. Often such evidence suggests the truth is something more sinister that the defendant wants to conceal.

The news that Trump asked Comey to drop the investigation provides significant additional circumstantial evidence of corrupt intent. The narrative then becomes that Trump first urged Comey to back off, and when that failed, he fired him. Reports that Trump asked others to leave the meeting before he spoke to Comey further suggest he knew he was doing something improper.

This theory is bolstered by the reports that senior White House officials had asked intelligence officials about intervening with Comey to see if they could ask him to shut down the Russia investigation. If those reports could be substantiated they would provide further evidence that the purpose of firing Comey was not to remove an ineffective leader or help the FBI but to thwart the Russia investigation.

The Defense: Lack of Corrupt Intent

Despite all of the above, this would not be a slam-dunk prosecution. When I first wrote this post after Comey was fired, I thought a potential criminal case would be very challenging. The news that has come out since then — including the Holt interview, the Oval Office meeting with the Russians, and the White House inquiries about possibly asking Comey to shut down the investigation — has made the case considerably stronger.

Proving to a unanimous jury beyond a reasonable doubt that the President acted with corrupt intent would still be challenging. If the information in all the press reports could be verified and translated into admissible evidence, I think a prosecutor could build a pretty decent case. But the defense would have a lot to work with as well.

First there’s the fact that the President clearly has the right to fire the FBI director. Comey himself, in his letter to FBI personnel following his dismissal, noted his belief that the President could fire him at any time and for any reason. That’s not an ironclad defense, of course. If something you have the right to do is done for a corrupt purpose it can still be obstruction. But prosecutors could not raise an inference of corrupt intent based solely on the nature of the President’s actions.

In addition, as the President has already pointed out, many people, both Democrats and Republicans, believed there were good grounds to fire Comey based on his actions over the past year. This would help raise a reasonable doubt about corrupt intent.

The President’s defense also would claim that his actions were too remote from the Russia investigation to constitute obstruction. The Supreme Court has held that acts are not obstruction unless they would have the “natural and probable effect” of influencing the proceeding if successful. In an institution as large as the FBI, removing the director may be unlikely to derail any one investigation. Indeed, acting director McCabe assured Congress this was the case and that the investigation will proceed unimpeded.

The Significance of Trump’s Own Statements

Some commentators have claimed the President basically admitted to obstruction by telling Lester Holt the “Russia thing”  was on his mind when he fired Comey. This is an overreach. Saying the President was thinking in part about the Russia investigation is not at all the same as saying he acted with the corrupt intent to obstruct that investigation.

This is a fine distinction, but a critical one. The President could fire Comey because he was mad about Comey’s handling of the Russia investigation and still not intend to obstruct that investigation. If the President believed (probably correctly) the investigation would continue unimpeded without Comey, he would lack the requisite intent to obstruct. Even if he was just mad at Comey and didn’t think at all about the effect on the investigation, that too would mean he lacked corrupt intent.

Later in the same NBC interview Trump also said he wanted the investigation to be done properly. Trump could argue that because Comey had become ineffective as a leader, firing him actually made it more likely the investigation would be successful.

Trump’s statements to the Russian officials about relieving “pressure” by firing Comey are also open to more than one interpretation. Based on the White House statements following the story, it appears Trump would argue that Comey’s mishandling of the investigation was disrupting the President’s attempts to forge better diplomatic relations with the Russians. When he referred to relieving pressure, the defense would argue, the President was referring to this interference with his diplomacy, not to the criminal investigation.

Some of these alternative explanations may seem implausible. I can see eyes rolling from here. But remember the President would not need to prove he acted without corrupt intent. The burden of proof always rests with the government. The defense would only need to raise a reasonable doubt about the President’s intent.

Every prosecutor has had the experience of having what seemed like a stone cold admission by a defendant be completely undermined by a plausible alternative explanation. I’m not trying to bend over backwards to provide excuses for the President’s statements. I’m simply acknowledging the difficulties that prosecutors can face when trying to prove guilt based on statements and circumstances that may be open to different interpretations.

Trump’s Alleged Request to Drop the Investigation

The new reports that President Trump asked Comey to drop the Flynn investigation provide significant additional evidence of possible obstruction of justice. But there are still some unresolved questions. First, the White House has denied Comey’s claims. Unless the rumored Oval Office tapes show up, the details of the meeting would be contested. Comey’s contemporaneous notes would carry significant weight, but disputes about the details and precisely what Trump said and how he said it could be important.

The President is the head of the Executive Branch and was Comey’s boss. How does that affect the question of corrupt intent? On some level the President does have the right to tell the FBI director what to do, just as he has the right to fire him.

There are long-standing norms and traditions about Justice Department independence and the White House not interfering in DOJ investigations. Trump’s alleged conversation with Comey seems to have trampled all over those norms. But whether breaching those norms amounts to a crime is a different question.

Trump’s meeting with Comey is the incident that so far sounds the most like true obstruction. But it may depend on further information about Trump’s own involvement in any underlying misconduct. If it turns out Trump wanted the Flynn case dropped because he feared it would lead to him, that sounds like corrupt intent. But if Trump was not implicated and was simply genuinely concerned that his friend was being treated unfairly, that could suggest the conversation was perhaps improper and unwise but not criminal.

In response to reports about the meeting with Comey, the White House responded by saying essentially “this is just the way the President talks.” In other words, it was an offhand remark expressing his concern about Flynn, not a calculated effort to influence Comey. This is a version of a defense of lack of corrupt intent, and it may be perfectly plausible. The President simply may not have appreciated the impact such an offhand statement could have when it comes from the leader of the free world and the FBI director’s boss.

In situations such as the Comey meeting a great deal also depends on things like nuance, tone, and body language. Was the statement made in a menacing way or in an offhand way? How did Comey interpret it? Information like that does not come across in a memo to the file and would depend on Comey’s testimony about the meeting.

There’s Obstruction, and then There’s Obstruction

In a criminal investigation of possible obstruction a grand jury could subpoena additional witnesses and documents. Perhaps prosecutors could develop stronger evidence of corrupt intent. The case would depend not on any one incident in isolation but on the pattern of the President’s actions. The circumstantial evidence is mounting, but a lot would need to be done to shore up that evidence. Prosecutors would need to establish that some of the things reported in the press actually took place and could be proven at trial.

The reality is that a criminal prosecution of President Trump is unlikely. Although it’s never been officially settled, most authorities – including the DOJ — believe the Constitution prohibits the prosecution of a sitting President. The scene where Trump is handcuffed and perp-walked out of the Oval Office is not going to happen.

But I think when most people accuse Trump of “obstructing justice,” they are not focused on the elements of a specific criminal statute. Through a series of actions (including the events discussed above, a request that Comey pledge his loyalty, asking Comey whether he was under investigation, and his subsequent Tweet about Comey that many interpreted as a threat) Trump appears to have violated fundamental constitutional and political norms concerning the rule of law and limitations on executive power. Trump’s actions may obstruct justice in this broader, structural sense even if not in a strictly legal one.

As with violations of the Constitution’s Emoluments Clause, the primary remedy for this obstruction would be political. Political remedies include elections, where the voters have a chance to register their disapproval. They also include impeachment, which is available for “high crimes and misdemeanors.” This is generally interpreted to mean misconduct related to public office, not necessarily precise criminal violations. Charges of obstruction of justice were central to the articles of impeachment of both Richard Nixon and Bill Clinton.

Impeachment is primarily a political proceeding rather than a legal one. Congress does not need to establish proof beyond a reasonable doubt of all elements of a crime the way a prosecutor does. Disregard of basic constitutional and political norms could fall short of a criminal offense and still justify impeachment. It’s up to the Members of Congress to decide whether misconduct rises to a level that would justify removing the President. For now, a great deal of additional investigation is needed before Congress could make those decisions.

As was true with alleged perjury by Attorney General Jeff Sessions, critics have been quick to accuse the President of a crime. But as I’m always telling my students, there is a lot of sleazy, unethical, and improper conduct that isn’t criminal. Trump’s potential interference with an ongoing investigation raises grave concerns. But the likely remedy lies with the political process, not a criminal prosecution.

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Charging Foreign Officials Who Take Bribes with Conspiracy to Violate the FCPA

The Foreign Corrupt Practices Act prohibits U.S. persons and companies from paying bribes to foreign officials to obtain or retain business. The statute applies only to those who pay the bribes, not to foreign officials who receive them. But a recent Supreme Court decision may revive a long-dormant legal theory: charging foreign officials with conspiracy to violate the FCPA.

Congress passed the FCPA in 1977 to combat U.S. companies participating in foreign corruption. In recent years FCPA enforcement has become a major priority for the Department of Justice and the SEC. FCPA cases have resulted in some of the largest criminal and civil fines in history. And although private citizen Donald Trump criticized the law in the past, Attorney General Sessions recently affirmed the Trump administration remains committed to its enforcement.

The FCPA is an unusual corruption statute in at least one respect. Bribery laws generally apply to both sides of a corrupt transaction, prohibiting the receipt of bribes by a public official as well as the payment of those bribes. The FCPA, by contrast, applies only to the bribe payer. Foreign officials who receive bribes may be subject to prosecution in their own country, but the language of the FCPA does not prohibit their actions.

Forty years after the FCPA’s passage, the economy is more global and interconnected than ever. DOJ is much more aggressive about asserting criminal jurisdiction over events that take place primarily in other countries. There are cases where DOJ may want to charge the foreign official accepting FCPA bribes. This may be particularly true when the official has extensive ties to and activities within the United States, or when prosecution in the official’s own country seems unlikely.

Because the FCPA does not apply to the bribe recipients, DOJ must look to other theories to hold them accountable. For example, in some recent cases DOJ has charged foreign officials with money laundering of funds received as part of an FCPA scheme.

But DOJ may have a more direct option: charging foreign officials who receive bribes with conspiracy to violate the FCPA. Conventional wisdom has been that such conspiracy charges are improper. This is based in large part on a single 1991 Court of Appeals case, United States v. Castle. But a recent Supreme Court decision casts doubt on Castle and may breathe new life into the conspiracy theory.

Bribery usually punishes both sides of the corrupt transaction

The Conspiracy Precedent: United States v. Castle

There was a time when DOJ believed it could charge foreign officials with conspiracy to violate the FCPA. In Castle the government used that theory to prosecute four individuals – two U.S. citizens and two Canadian officials. The Americans had allegedly paid the Canadians a $50,000 bribe to secure a contract to provide buses to the Saskatchewan government.

The conduct of the Americans plainly fell within the statute. But the Canadian defendants claimed they could not be charged with conspiracy to violate the FCPA. They argued the conspiracy charge was an improper attempt to circumvent Congress’s decision not to criminalize the foreign officials’s conduct.

The U.S. Court of Appeals for the Fifth Circuit agreed. The court said Congress knew any FCPA bribery transaction would necessarily involve a foreign official. But Congress chose not to criminalize the receipt of the bribe. Prosecuting foreign officials for conspiracy, the court held, would amount to an improper end run around this Congressional policy decision.

The Mann Act and Gebardi v. United States

The Castle court relied primarily on a 1932 Supreme Court case, Gebardi v. United States. Gebardi involved a prosecution under the Mann Act, which prohibited the transportation of women across state lines for “immoral purposes.” The Mann Act punished those doing the transporting but did not criminalize the actions of the woman being transported.

In Gebardi a woman agreed to cross state lines with her lover to have sex. When they were charged with conspiracy to violate the Mann Act, she argued the charge was improper. She noted that Congress deliberately chose not to criminalize her conduct in the Mann Act itself. To allow a conspiracy charge, she claimed, would subvert this Congressional decision. The Supreme Court agreed and dismissed the conspiracy case.

The Castle court held that the reasoning of Gebardi squarely applied to the FCPA. Failing to criminalize the receipt of bribes by foreign officials, the court said, represented “an affirmative legislative policy to leave unpunished a well-defined group of persons who were necessary parties to the acts constituting a violation of the substantive law.” Given that legislative decision, it was improper for prosecutors to use conspiracy to charge the foreign officials that the FCPA left unpunished.

Baltimore police were charged with extortion in Ocasio

Conspiracy and Ocasio v. United States

Since 1991 Castle has been widely cited for the proposition that it’s improper to charge foreign officials with conspiracy to violate the FCPA. But the Supreme Court’s decision last term in Ocasio v. United States suggests the high court would not agree.

In Ocasio the defendant was a Baltimore police officer. He, some fellow officers, and the owners of an auto garage took part in a scheme in which the garage owners paid the officers to refer car accident victims to the garage for repairs.

Officer Ocasio and the garage owners were charged with conspiracy to violate the Hobbs Act. That act prohibits extortion “under color of official right” by a public official. This is a common federal corruption charge, particularly in cases involving state or local officials.

In Evans v. United States the Supreme Court held that extortion under color of official right is basically equivalent to the receipt of a bribe. But the Hobbs Act applies only to the public official, not to the person who pays. So as interpreted by Evans the Hobbs Act, like the FCPA, is an odd bribery statute: it prohibits only one side of a two-sided corrupt transaction.

In Officer Ocasio’s case, that meant prosecutors couldn’t charge the garage owners with violating the Hobbs Act directly. So they charged the garage owners and the officers with conspiracy to violate the Hobbs Act. The government’s theory was that although the garage owners could not violate the Hobbs Act, they were still capable of conspiring to help the officers violate it. In effect, the garage owners were charged with conspiring to help the police officers extort money from the garage owners themselves.

Ocasio argued the conspiracy charge was improper. Part of his argument was similar to that made by the defendant in Gebardi. Although every Hobbs Act extortion case necessarily involves at least two parties, Congress expressly chose not to punish the person who pays the public official. Prosecuting the payer for conspiracy to violate the Hobbs Act, Ocasio argued, would undermine this Congressional decision.

Supreme Court precedent supports charging foreign officials with conspiracy to violate the FCPA

The Supreme Court on the Nature of Conspiracy

The Supreme Court disagreed with Officer Ocasio. The Court relied on basic principles of conspiracy law. It noted that conspiracy has always been a separate offense from the underlying crime. In a conspiracy charge, the crime is the agreement itself – the joint undertaking to engage in criminal activity.

Conspiracy does not require that the co-conspirators successfully commit the crime that is the object of the conspiracy. It does not require that each co-conspirator agree to commit or facilitate each and every element of the underlying crime. In fact, a conspirator may be convicted even if he was legally incapable of committing the underlying offense. Conspirators need only agree to help some member of the conspiracy commit the crime.

In Ocasio’s case, the garage owners conspired with the police officers to help the officers violate the Hobbs Act. The Court held this conspiracy theory was sound even though the garage owners, who were not public officials, would be legally incapable of committing extortion under color of official right: “It is sufficient to prove that the conspirators agreed that the underlying crime be committed by a member of the conspiracy who was capable of committing it. In other words, each conspirator must have specifically intended that some conspirator commit each element of the substantive offense.”

The Mann Act Precedents

The Ocasio Court also discussed Gebardi, as well as an even earlier Mann Act case, United States v. Holte (1915). In Holte the Court rejected the claim that it was impossible for the woman transported across state lines to be guilty of conspiracy to violate the Mann Act. The Court gave an example of a prostitute who buys the train tickets, arranges for the travel, and then crosses state lines with a companion. In such a case, the Court said, there was no reason the woman could not be charged with conspiracy even though the terms of the Mann Act did not cover her conduct.

The Court in Ocasio concluded Holte and Gebardi mean that merely participating in a two-sided transaction will not always be enough to charge the person not covered by the statute  with conspiracy. However, there could be cases where the active participation of the other party would rise to the level where a conspiracy charge would be warranted. Gebardi, the Court held, rejected the conspiracy charge not because it was inherently improper but simply because there was no evidence that the woman in that case had actually joined the conspiracy.

The Court concluded: “Holte and Gebardi make perfectly clear that a person may be convicted of conspiring to commit a substantive offense that he or she cannot personally commit. They also show that when that person’s consent or acquiescence is inherent in the underlying substantive offense, something more than bare consent or acquiescence may be needed to prove that the person was a conspirator.”

Charging Foreign Officials with Conspiracy to Violate the FCPA

Ocasio suggests the current Supreme Court would not agree with the Castle court’s reading of Gebardi. Like the FCPA, the Hobbs Act expressly fails to criminalize the acts of one of the two necessary parties in a criminal transaction. The court in Castle held that this Congressional judgment meant a conspiracy charge would always be improper. But the Supreme Court in Ocasio rejected a similar claim.

Castle essentially concluded that Congress’s failure to include foreign officials in the FCPA immunizes those officials from any FCPA-related charge, even under separate statutes. The current Supreme Court is unlikely to be sympathetic to that argument. If Congress wants to pass a statute prohibiting any charges of any kind against foreign officials who accept bribes, it is free to do so. But the Court is unlikely to infer such a broad policy decision from the silence in the FCPA. It is much more likely to find, as it did with the Hobbs Act, that nothing in the FCPA alters the basic law of conspiracy.

This suggests DOJ could properly charge a foreign official who receives bribes with conspiracy to violate the FCPA. The theory would be that the foreign official conspired to help U.S. persons violate the FCPA by bribing that official. Just as the garage owners in Ocasio conspired to help others extort money from the owners, foreign officials could conspire to help others pay bribes to the foreign officials.

This charge would be most appropriate where the foreign official was aggressively encouraging the bribes. As the Court noted in Ocasio, something more than mere passive participation likely would be required to find the officials guilty of a conspiracy. But if they were actively engaged in the scheme, a conspiracy charge may be warranted.

In a case where the foreign official is aggressively demanding bribes, punishment of the official may be particularly justified. The bribe payers arguably are being “shaken down.” They may feel they have little choice but to pay. Charging only the bribe payers in such a case is akin to charging only the victims of extortion in a Hobbs Act case – it may let the most culpable party off the hook.

Of course, cases where DOJ is interested in prosecuting the foreign official may be relatively rare. Where the official is more of a passive recipient, conspiracy charges may not be warranted. In many cases diplomatic, jurisdictional, evidentiary, or other concerns will counsel against filing charges.

But in appropriate cases, DOJ should consider charging foreign officials who accept bribes with conspiracy to violate the FCPA. Ocasio suggests the Department’s legal position more than twenty-five years ago in Castle was correct: conspiracy is a separate crime and there is no barrier to prosecution.

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