Prosecuting Trump for the Capitol Riot

The riot at the Capitol on January 6 has led to many calls for President Trump to be removed from office. Regardless of whether that happens, there needs to be a criminal investigation into the events leading up to the riot, and in particular into Trump’s role in inciting the riot. Criminal charges against Trump and the others involved may well be appropriate.

I’ve previously resisted calls for criminal investigations of Trump once he leaves office. The risk of criminalizing policy differences requires that we be very cautious about prosecuting an outgoing president. Part of what led so many to recoil when Trump led chants of “lock her up” at his rallies was the specter of a president using his Justice Department to pursue political enemies. DOJ has already been severely damaged during the Trump administration, and a criminal investigation of Trump by the Biden DOJ will result in further charges of politicization. And most of Trump’s misconduct in office, however odious, was likely not criminal.

But Trump inciting a mob to storm the Capitol is on a whole different level. There is no possible way to  characterize Trump’s actions as the legitimate exercise of his presidential authority; no risk that we would be criminalizing mere political disputes. This was an assault on our most cherished institutions – on our democracy itself. It requires a thorough criminal investigation, followed by any appropriate indictments.

The Riot at the Capitol

On Wednesday, January 6, Congress convened for the formal count of the electoral college votes that would officially certify Joe Biden as the president-elect. In the weeks leading up to the certification, Trump and many of his supporters made repeated unfounded allegations of voter fraud and claimed the election had been “stolen” from him. They filed dozens of lawsuits around the country alleging problems with the election. These claims were uniformly rejected by both state and federal judges, including judges appointed by Trump.

In the days leading up to January 6, Trump exhorted his millions of followers to show up in D.C. to protest the “fraudulent” election. For example, on December 19 he Tweeted: “Big protest in D.C. on January 6. Be there, will be wild!” 

On January 6, Trump held a “Save America” rally at the White House, addressing the large crowd that had gathered in response to his pleas. In a speech lasting over an hour, Trump used incendiary language, repeatedly urging the crowd to “fight” to save the country. He exhorted them to march down Pennsylvania Avenue to “stop the steal” and prevent the Democrats from “fraudulently” taking over the country. Others spoke as well, including the president’s son Don Jr. and Trump’s personal attorney, Rudy Giuliani, who urged the crowd to settle the dispute over the election via “trial by combat.”

Following the rally the crowd marched  down Pennsylvania Avenue to the Capitol. They overwhelmed the Capitol Police and broke into the building — breaching barricades, scaling walls, and breaking down doors. Once inside they broke windows and destroyed other property. They threatened the safety of members of Congress, who were forced to cower behind locked doors. Some in the crowd were armed or carried explosive devices.  Some carried nooses and chanted slogans crying they should hang Mike Pence or assassinate Nancy Pelosi. Some carried zip ties, suggesting they might intend to take prisoners. One capitol police officer died after the rioters beat him in the head with a fire extinguisher. One rioter was shot and killed by the police.

It was six hours before law enforcement was able to re-take the building. In the days since the riot it has become clear that it’s very lucky more people were not injured or killed, including members of Congress or the vice president.

The Relevant Criminal Statutes

The seditious conspiracy  statute, 18 U.S.C. § 2384, makes it a crime for two or more persons to conspire to oppose the U.S. government by force, or “by force to prevent, hinder, or delay the execution of any law of the United States.” It provides a penalty of up to twenty years in prison.

The crime of rebellion or insurrection, 18 U.S.C. § 2383, provides a ten-year penalty for anyone who “engages in any rebellion or insurrection against the authority of the United States or the laws thereof, or gives aid or comfort thereto.”  It also provides for disqualification from holding public office in the future.

Under either of these statutes, the prosecution argument would be that Trump, through his  rally and conduct leading up to the rally, conspired with others to use force to delay the “execution of [a] law of the United States” – the electoral certification by Congress. In the words of the rioters that Trump adopted, he was trying to “stop the steal.” Through the same actions he also took part in a rebellion or insurrection against the authority of the United States and gave “aid or comfort” to those who stormed the Capitol.

Those who actually broke into the Capitol may face a number of other charges as well, including unlawful entry, destruction of property, assault, and homicide. Many of those people are currently being rounded up by law enforcement, having helpfully posted pictures of themselves committing the crimes on social media.

The First Amendment Defense

Trump’s most likely defense, one already raised by a number of legal commentators, is that his speech to the mob is protected by the First Amendment. He didn’t intend for the mob to riot, this defense would argue, he merely wanted them to protest outside the Capitol to try to influence the lawmakers inside. Accordingly, his address to the crowd was protected political speech and cannot form the basis of a prosecution.

The Supreme Court has held that speech intended to incite imminent violence is not protected by the First Amendment, but the category of speech that may be prosecuted is very narrow. In the leading case of Brandenburg v. Ohio, the Court held that speech may lawfully be criminalized only if it is “directed to inciting or producing imminent lawless action and is likely to incite or produce such action.” In Brandenburg  the Court threw out the conviction of a Ku Klux Klan member for a rally speech at a farm in Ohio. The speech contained derogatory language about Jews and African Americans and vague references to possible “revengeance” against the government if it did not stop oppressing whites, but called for no immediate action.

The Brandenburg analysis can be broken down as follows: 1) was the speech likely to produce lawless action; 2) was that action imminent; and 3) was that the speaker’s intent. Numbers one and two here seem pretty clear. The speech was not merely likely to produce lawless action, it did in fact produce lawless action. And unlike the speech in Brandenburg itself, Trump’s speech did call for imminent action: he directed the crowd to march to the Capitol as soon he was done. The primary legal issue then becomes whether what happened was really Trump’s intent.

Evidence of Trump’s Intent   

Intent in a criminal case is usually proven by circumstantial evidence. Trump’s speech is full of references to the need for the crowd to “fight like hell,” to be “strong,” and to stop the Democrats from “stealing” the election.  On the other hand, his defenders can point to the fact that he never explicitly called for the crowd to “storm the barricades,” and that he inserted a couple of references in the hour-plus long speech to “peaceful protest.” The defense would argue that the violent phrases were just colorful metaphors. Political speech, they would note, is full of references to “fighting” for various rights. That can’t be construed as a call for actual violence.

Commentators who defend the speech as protected by the First Amendment tend to focus on simply the speech itself, isolating a few lines and arguing they don’t amount to incitement. But Trump’s intent can’t be determined one way or another by looking only at the text. Context matters, and we can’t parse Trump’s intent by looking at the speech alone any more than we can parse the intent of the entire speech by looking at a few isolated passages.

Trump’s speech and intent first have to be evaluated in the context of the events leading up to the rally. It was preceded by weeks of Trump whipping up his supporters to help stop the “fraudulent” election. Right-wing social media was full of memes issued in response, urging his supporters to show up and “fight” for Trump.

The speech also has to be evaluated in the context of the rally as a whole. Others speaking at the rally used even more explicit violent language, such as Giuliani’s call for “trial by combat.” And the rally was taking place immediately prior to an actual march to the Capitol by the crowd. This is tied to the “imminence” issue – a similar speech using similar violent language directed at Congress but given at a campaign rally in Florida, for example, would not be nearly as menacing. Here the crowd was in a position to act immediately in response to Trump’s words — and did so.   

The nature of the crowd is also important when inferring Trump’s intent. He knows he’s not speaking to the Rotary Club here. Trump knows that his supporters routinely use the language of violence, insurrection, civil war, and “second amendment rights.” All outward signs would indicate this was a crowd stoked for violence – all they needed was their leader to give them a little nudge.

How exactly did Trump expect the protestors to “stop the steal” and prevent Congress from certifying Biden as the winner, if not by storming the Capitol to shut it down? Is it plausible that he believed the unruly mob before him was going to seek to “Save America” by peacefully linking arms outside the Capitol and singing Kum-ba-yah?

I think given Trump’s history and the overall context of the speech, the evidence of his intent is strong. But what really seals it for me is what he did once the riots started.

Trump’s Actions During the Riot

Although Trump promised the crowd he would be there with them as they marched to the Capitol, in fact he retreated to the White House to watch the developments on TV. There were reports from sources inside the White House that he expressed delight and excitement as he watched the riot unfold. He also was reportedly calling lawmakers, while the riot was going on, still trying to persuade them to delay the certification process or overturn the election.

There are also published reports that when the Mayor of D.C. called for reinforcements from the national guard, Trump resisted. (Because D.C. is not a state, the local national guard is controlled by the U.S. Department of Defense – so ultimately by Trump.) Vice president Pence was reportedly the one who finally ordered the D.C. national guard to respond, after a significant delay.

Finally, after allowing the riot to proceed for more than two hours and only after president-elect Biden had already called for the violence to cease, Trump released a tepid video statement to his supporters. He repeated the false claims that the election had been stolen. He told the rioters that he understood their pain. Remarkably, he said “we love you, you’re very special,” before saying it was time to go home.  Shortly thereafter he Tweeted:

These are the things and events that happen when a sacred landslide election victory is so unceremoniously & viciously stripped away from great patriots who have been badly & unfairly treated for so long. Go home with love & in peace. Remember this day forever!

These events are compelling evidence of Trump’s true intent. If he did not intend for the rioters to storm the Capitol, you would expect him to react with shock and horror and immediately try to stop it. Instead he watched excitedly on TV, delayed sending help, and continued working to try to stop Congress from acting while Congress itself was under attack. He praised his followers, told them he loved them, called them great patriots, and told them to be proud. Those are not the words of a man disappointed by what happened. That crowd did exactly what Trump wanted them to do.

I’m not suggesting that overcoming a First Amendment defense would be a slam-dunk. It’s possible to argue that he is just a terrible person who enjoyed the riot once it began but never really intended for it to happen. The First Amendment claim would clearly be the key legal issue to be resolved in any prosecution. But if I’m the prosecutor with this evidence, I like my case.

The Benefits of a Grand Jury Investigation

Launching a grand jury investigation is not the same as determining that criminal charges are appropriate. But a federal grand jury investigation would allow prosecutors to subpoena all relevant documents including emails, phone records, text messaging records, social media posts, and the like, to fully piece together all the events leading up to and during the riot. The grand jury could compel witnesses to testify under oath, such as witnesses to the president’s conduct and statements in the Oval Office while the riot was unfolding.

Such an investigation could uncover information that makes the evidence of Trump’s intent and role in the riot much clearer. We don’t know what is contained in the text messages or emails leading up to the riot, or what conversations witnesses could testify about. The grand jury could probe all of these details to see whether charges are appropriate. 

Any investigation also needs to explore the potential liability of others around president Trump, including others who spoke at his rally, as potential co-conspirators. The president’s prime enabler, Rudy Giuliani, who called for “trial by combat” after working for weeks to overturn the election, is certainly a potential target.

A conspiracy investigation should not be limited to events on the day of the riot. It would also make sense to explore other instances of misconduct, such as Trump’s recent call to Georgia election officials asking them to “find” the  votes they would need to overturn Biden’s victory in that state. As I wrote here, due to the heightened “willfulness” standard of intent for election offenses, prosecuting that call as a stand-alone election crime would be an uphill battle. But it would make sense to investigate that incident, and others, as potentially part of a conspiracy involving a pattern of overt acts seeking to overturn the lawful election results, culminating on January 6. 

There is a great deal about what happened on January 6 that we still need to learn, but it’s clear there is at least potential criminal conduct by Trump and others. Shortly after January 20, president Biden’s Department of Justice should convene a grand jury to investigate. We can’t say for certain at this point that criminal charges would be appropriate. But we can say for certain that a grand jury investigation is called for.

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Coronavirus, Congress, and Insider Trading

There were reports last week of potential insider trading by members of Congress. Several of them sold millions of dollars in stocks as the coronavirus crisis was just beginning to unfold, before the major stock market decline. At the time, they were receiving regular, confidential briefings on the dangers of the virus. Some were publicly downplaying the severity of the problem while they privately unloaded their stock holdings. But although some of these stock trades may have been deplorable, proving they were criminal would likely be an uphill battle.

The Law of Insider Trading

Insider trading is the purchase or sale of securities based on material, nonpublic information, in violation of a duty of trust and confidence. Classic insider trading involves corporate executives or other company insiders trading their own company’s stock based on nonpublic information, in violation of the duty they owe to their shareholders not to exploit company information for their own private gain. A simple example would be a CEO who knows her company is about to be acquired and purchases large amounts of stock in the company before that information becomes public.

Under the much broader misappropriation theory, an individual is liable for insider trading if he trades stock based on material nonpublic information in violation of a duty owed to the source of that information. In the leading Supreme Court misappropriation theory case, United States v. O’Hagan, the defendant was an attorney whose firm represented the acquiring company in an unannounced takeover bid. He bought large quantities of stock and options in the company that was going to be acquired, and made several million dollars once the deal became public. As an outsider, O’Hagan didn’t owe any duty to the shareholders of that company. But he did owe a duty to his own firm and its client not to misappropriate the client’s confidential information for his personal gain. His trades in violation of that duty thus constituted insider trading.

A key in any insider trading case, therefore, is identifying the relevant duty. Trading on material nonpublic information is only insider trading if using that information for a personal benefit violates a duty the trader owes to someone. If you acquire material, nonpublic information through diligent research and hard work, or even by overhearing two corporate insiders talking on an airplane, it’s not insider trading for you to trade based on that information. There must be a violation of a duty.

The Impact of the STOCK Act

Members of Congress, by the nature of their work, necessarily learn a great deal of information that could impact the stock market. In 2012, in response to concerns about Members profiting off such information, Congress passed the Stop Trading on Congressional Knowledge, or STOCK Act. The Act prohibits Members of Congress and their employees from using information learned during the course of their duties for private profit. It directs the Ethics Committees of both Houses of Congress to issue guidance concerning this prohibition. The Act also states that “Members of Congress and employees of Congress are not exempt from the insider trading prohibitions arising under the securities laws.” The Act specifies that Members and Congressional employees owe a duty “arising from a relationship of trust and confidence” to the Congress and to the American people.

This legislative recognition of a duty is significant for insider trading purposes. As just noted, the existence of such a duty is a prerequisite for insider trading liability. The STOCK Act makes it clear that Members of Congress owe a duty of trust and confidence to Congress and the American people not to personally profit from information they learn in the course of their duties. If Members trade stock in a company based on material, nonpublic information learned through their work, they may be liable for insider trading for breaching that duty.

Senator Richard Burr
Senator Richard Burr

The Congressional Trades and Insider Trading

The allegation concerning several Members of Congress is that they received nonpublic information during briefings about the Coronavirus and traded stocks based on that information in anticipation of the coming market crash. Not all such transactions involved stock sales; for example, Senator Kelly Loeffler bought stock in a company that specializes in software that allows people to work from home, and other congressional aides reportedly bought stock in companies such as Clorox, Inc.

To prove insider trading, prosecutors would have to establish that these purchases and sales were based on material, nonpublic information learned during the course of Congressional duties. If they were, then the STOCK act makes clear that such transactions for private gain would violate a duty owed to Congress and the American people and therefore would potentially be insider trading. But there are several factors that suggest establishing insider trading could be challenging.

1) Was the Information Truly Nonpublic?

To evaluate any claims of possible insider trading, it is critical to know exactly what information was relayed at the Congressional briefings. Prosecutors would need to show the briefings included information that was not yet public and that would likely lead those who received the information to conclude the stock market is going to decline. Any investigation into these Congressional trades, criminal or civil, therefore would have to explore what exactly the Members were told in these briefings.

There was a lot of public information already floating around about the coronavirus at the time of the briefings in January and February. Were Members really given information that was not otherwise publicly available? Or did the briefings simply serve to educate the Members and try to get them to focus on the problem, without necessarily relying on material nonpublic information?

The answer may vary depending on the briefing. At least some of the briefings reportedly were classified, which suggests a greater likelihood that they contained information not otherwise publicly available. But as to a more routine, unclassified briefing, it may be that any diligent researcher could have readily come up with the same information that was being given to the Members. And if that’s the case, then acting on that information would not be insider trading.

2) Was the Information Material?

Even if the briefings contained nonpublic information, that information must have been material. Information is material if it is likely to be deemed important to a person deciding whether to buy or sell the stock. One issue here would be that even if some of the information in the briefings was nonpublic, was it so different from what was already available that it would materially influence anyone’s decision to buy or sell? In other words, there was already so much information available that any additional information received in the briefings, even if not otherwise public, may not have made a material difference to a potential trader. Was there actually something disclosed in the briefings that was both nonpublic and so dramatically different from the other available information that it would have tipped the scales on whether to buy or sell?

Another wrinkle when it comes to materiality is that this information likely did not relate to any particular company, or even any particular industry, but to the risks to the country and economy as a whole. Insider trading cases usually involve nonpublic information that relates directly to the stock that was traded. Charging insider trading based on information suggesting that the overall economy in general is going to decline would be unusual. Even if there is information suggesting that the economy as a whole might suffer, how does one prove that information was material to the stock price of any one company? You could try to argue that certain industries seemed more likely to suffer or to profit, and focus on trades based on those industries (such as sales of hotel or airline stocks), but it still could be challenging to prove materiality as to any particular trade.

Once again, what was said at the briefings could be key; for example, if a briefing focused specifically on likely damage to the airline industry, that might support allegations of subsequent insider trading in airline stocks. But if a briefing was focused more on the overall health risks to the country and less on the economic impact, then proving the materiality link to trading stock in any particular company could be much more challenging.

3) Were the Trades Actually Based on the Information Received?

Another possible defense would be that even if there was nonpublic information provided during the briefings, the trades were not based on that information. In the wake of the insider trading allegations, Senator Richard Burr put out a statement claiming his trades were based only on public information, such as reports on CNBC. Burr is claiming, in other words, that even if he received nonpublic information, his trades were based not on that information but on other information that was widely available to the general public.

If there was material, nonpublic information provided at the briefings, then it likely will not be enough for Burr just to claim he relied on other, public information when making the trades. Under SEC Rule 10b5-1, if a person possesses material, nonpublic information at the time of a purchase or sale of a security, there is a presumption that the trade was based on that information. The purchaser can rebut that presumption, but only by showing that there was a pre-existing, written plan or order to sell the stocks that predates the receipt of the nonpublic information. Absent such a pre-existing order, a Member or staffer will be presumed to have relied upon any material nonpublic information received when making a trade.

A related issue will be whether the Member or other individual who received the information actually ordered the trades in question. Senator Kelly Loeffler, for example, has claimed on Twitter that she does not make decisions about her stock trades and that those decisions are made by third-party advisors without her input. Senator Diane Feinstein has claimed that her stocks are held in a blind trust and that this particular trade was made in her husband’s account, and so any trades were made without her knowledge or participation. If trues, these would be defenses to any claim of insider trading.

One question raised by Senator Loeffler’s defense is whether she had any communications with those “third party advisors” where she shared information learned during the briefings. She may not make the decisions herself, but if she passed along material, nonpublic information and her advisors traded on that information then she could still be liable for insider trading as a “tipper” or for aiding and abetting. The same would be true if she passed the information to her husband, who happens to be Chairman of the New York Stock Exchange, and he then relied on that information to trade or to direct others to trade on their behalf.

Representative Chris Collins

The Case of Representative Chris Collins

These allegations have led some to compare these Members of Congress to Representative Chris Collins, who was recently sentenced to 26 months in prison for insider trading. But the cases have almost nothing in common. Collins served on the board of a pharmaceutical company and sold stock in that company after receiving confidential information from the board chairman that a major drug trial had failed. The Collins case differs from these current allegations in two important respects. First, the inside information Collins gained was not as a result of his work on Capitol Hill. His status as a Congressman was irrelevant to his insider trading case, as was the STOCK Act. Collins could have been just any board member, trading on confidential information received from the chairman. And second, the information Collins received was specific to the one company in whose stock he subsequently traded – it wasn’t information about a potential overall market decline.

The Appropriate Remedy

These stock trades deserve to be investigated. Some certainly seem to violate the spirit of the STOCK Act. But given the issues described above, it seems unlikely that any will result in a criminal case. And a criminal remedy is not necessarily the answer; there are many possible consequences for these actions besides a criminal prosecution. The SEC may pursue civil insider trading charges, where the penalties may include fines and disgorging of profits. Other shareholders in companies that were dumped may sue for civil stock fraud. The Ethics Committees can explore the allegations and impose sanctions as well; Senator Burr, for example, has already requested an Ethic Committee investigation of his own stock trades. Members of Congress could face calls to resign, as some already have. And of course, voters have the ultimate political sanction at the ballot box for any offenders who run for re-election.

One good outcome would be for this scandal to lead to reforms that include a requirement that every Member of Congress hold their stocks and other assets in blind trust, with absolutely no control over investment decisions. Until that is the norm, allegations like this will continue to arise and there will always be suspicions that some Members are using the power of their office unfairly to line their own pockets. Such conduct may not always be criminal, but it’s always wrong.