Topic: Law and Civil Liberties

Judge Dresses Down Federal Prosecutors

When we hear the phrase “witness intimidation” we’re likely to think of a gang member who is on trial or about to go on trial and, to evade justice, tries to have key witnesses change their story so the case will collapse.  We hardly ever hear about cases where the prosecutors try to intimidate witnesses.  But it happens.  In an extraordinary proceeding this week in Santa Ana, CA, a federal judge reprimanded prosecutors for contemptible conduct toward witnesses.  This story needs telling.

Here’s the gist of the case: William Ruehle was charged with criminal securities law violations.  Mr. Ruehle’s defense was that his actions were always made in good faith – that he did not act with criminal intent.  That’s an important aspect of the case.  To take another example that most people can relate to, we all know the tax code is very complicated.  People (including IRS employees) make honest mistakes about it all the time.  Under the law, the government can only make a case for criminal tax evasion if it can persuade a jury that the person accused knew what the tax law required and proceeded to violate it anyway.  

Crucial to Mr. Ruehle’s defense were three witnesses whom he wanted to call on his behalf at trial.  They were familiar with his business dealings and would support his good faith defense.  That was the plan anyway. 

In preparation for trial,  prosecutors embarked on an outrageous mission to “flip” or  destroy the defense witnesses.  One lady was fired from her job after prosecutors called her employer and spread innuendo.  Prosecutors then pressured her into pleading guilty to some offense that allegedly took place seven years earlier  – a very peculiar prosecution under the surrounding circumstances.  And then her plea deal was contingent upon this lady changing her story to support the prosecution, not Mr. Ruehle.  Taking all this in, the judge said he had ”absolutely no confidence that any portion of [this lady’s] testimony was based upon her own independent recollection of events as opposed to what the government thought her recollection should be on those events.” 

And that’s just one witness.  It gets worse.

Here, in summary, is how Judge Cormac J. Carney viewed the case:

I have a solemn obligation to hold the government to the Constitution.  I’m doing nothing more and nothing less.  And I ask my critics to put themselves in the shoes of the accused. 

You are charged with serious crimes and, if convicted on them, you will spend the rest of your life in prison.  You only have three witnesses to prove your innocence and the government has intimidated and improperly influenced each one of them.  Is that fair? Is that justice?  I say absolutely not.

Judge Carney proceeded to dismiss the case before the jury could begin its deliberations because the government’s conduct was so egregious. 

Some of the defense attorneys in the courtroom said that they had started their careers as prosecutors and that they were well aware that there is a “cloak of credibility” when prosecutors represent events to employers, reporters, and judges.   (Ask yourself what you would think if a prosecutor told you that “Mary Smith is an unindicted co-conspirator in our on-going investigation…”) Watching this judge correct a miscarriage of justice, they said, was one of the most remarkable events they had witnessed in their legal careers.  They hoped the judge’s ruling would be heard “throughout the country.”

The ruling is only about 15 pages, double spaced.  Read the whole thing (pdf).  (Really – do it this time!)  I was obviously not present during the proceedings in this case, but it is an extraordinary move for a federal judge to dismiss a case, with prejudice, during a trial.  It is my view that the conduct  of the prosecution must have been truly blatant. 

This seems like a true scandal.  In a just world, the prosecutors would now be investigated for criminal witness intimidation and for professional misconduct by bar associations.  Judge Carney’s opinion should be reprinted verbatim in law school textbooks to teach future judges to keep their eyes open, to keep an open mind, to be impartial, and to beware of those with a “win-at-all-costs” mentality.

For related Cato work, go herehere, and here.

Obama’s Copenhagen Speech

Politico asks, “Was he convincing?”

My response:

In Copenhagen this morning, President Obama convinced only those who want to believe — of which, regrettably, there is no shortage.  Notice how he began, utterly without doubt:  “You would not be here unless you, like me, were convinced that this danger is real.  This is not fiction, this is science.”  The implicit certitude is no part of real science, of course.  But then the president, like the environmental zealots cheering him in Copenhagen, is not really interested in real science.  Theirs, ultimately, is a political agenda.  How else to explain the corruption of science that the East Anglia Climate Research email scandal has brought to light, and the efforts, presently, to dismiss the scandal as having no bearing on the evidence of climate change?  If that were so, then why these efforts, or the earlier suppression of contrary or mitigating evidence that is the heart of the scandal?

We find such an effort in this morning’s Washington Post, by one of those at the center of the scandal, Penn State’s Professor Michael E. Mann.  Set aside his opening gambit — “I cannot condone some things that colleagues of mine wrote or requested” — this author of the famous, now infamous, “hockey stick” article seems not to recognize himself in Climategate.  That he then goes after Sarah Palin as his critic suggests only that on a witness stand, confronted by his real critics, he’d be reduced to tears by even a mediocre lawyer.  One such real critic is my colleague, climatologist Patrick J. Michaels, who documents the scandal and its implications for science in exquisite detail in this morning’s Wall Street Journal.

But to return to the president and his speech, having uncritically subscribed to the science of global warming, Mr. Obama then lays out an ambitious policy agenda for the nation.  We will meet our responsibility, he says, by phasing out fossil fuel subsidies (which pale in comparison to the renewable energy subsidies that alone make them economically feasible), we will put our people to work increasing efficiency in our homes and buildings, and we will pursue “comprehensive legislation to transform to a clean energy economy.”

Mark that word “legislation,” because at the end of his speech the president said:  ”America has made our choice.  We have charted our course, we have made our commitments, and we will do what we say.”  But we haven’t made “our choice” — cap and trade, to take just one example, has gone nowhere in the Senate — even if Obama has made “our commitments.”  And that brings us to a fundamental question:  Can the president, with no input from a recalcitrant Congress, commit the nation to the radical economic conversion he promises?

Environmental zealots say he can.  Look at the report released last week by the Climate Law Institute’s Center for Biological Diversity, “Yes He Can: President Obama’s Power to Make an International Climate Commitment Without Waiting for Congress,” which argues that in Copenhagen Obama has all the power he needs under current law, quite apart from the will of Congress or the American people, to make a legally binding international commitment.  Unfortunately, under current law, the report is right.  I discuss that report and the larger constitutional implications of the modern “executive state” in this morning’s National Review Online.

There is enough ambiguity in the president’s remarks this morning to suggest that he may not be prepared to exercise the full measure of his powers.  But there is also enough in play to suggest that it is not only the corruption of science but the corruption of our Constitution that is at stake.

Vague Laws Defy the Rule of Law

Following Enron’s downfall, the federal government charged company CEO Jeffrey Skilling with “honest services fraud” connected to the alleged manipulation of Enron’s market value (and other securities irregularities).  This charge — also at issue in two other cases before the Court this term — is based on a statute which says, in its entirety: “For the purposes of this chapter, the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.”

Skilling was convicted, and his conviction was upheld by the Fifth Circuit.  The Supreme Court agreed to review the application of the “honest services fraud” statute to Skilling (as well as the issue of potential jury bias stemming from pretrial publicity in Houston).  Cato, joined by the Pacific Legal Foundation, filed an amicus brief supporting neither party, arguing simply that vague statutes such as the one at issue here offend due process.

We take no position on whether Skilling committed a crime, or even the crime at issue here (whatever that may be).  Instead, we argue that the Court should clarify that the constitutional prohibition on vague laws protects sophisticated and unsophisticated defendants alike in the realm of economic regulation, as well as in criminal law.  The due process requirements of fair warning and definiteness apply equally in the contexts of white collar business crimes, business torts, and civil regulations.

Vague laws involve three basic dangers:  First, they may harm the innocent by failing to warn of the offense.  Second, they encourage arbitrary and discriminatory enforcement because vague laws delegate enforcement and statutory interpretation to individual government officials.  Third, because citizens will take extra precautions to avoid violating the law, vague laws inhibit our individual freedom.

For more on this issue, see Tim Lynch’s posts here and here, Gene Healy’s op-ed, or the related policy forum and podcast.

A Civil Liberties Roundup

Here are some interesting new items on the web:

  • Cato Senior Fellow Nat Hentoff is interviewed by John W. Whitehead of the Rutherford Institute.  Nat says “Obama has little, if any, principles except to aggrandize and make himself more and more important.”  And “Obama is possibly the most dangerous and destructive president we have ever had.”  Go here for the full interview.
  • Cato adjunct scholar Harvey Silverglate is blogging this week over at the Volokh Conspiracy on his new book, Three Felonies a Day.
  •  Cato Adjunct Scholar Marie Gryphon, who is also a Senior Fellow with the Manhattan Institute, has just put out a new paper, It’s a Crime: Flaws in Federal Statutes That Punish Regular Businesspeople.
  • Cato Media Fellow Radley Balko takes a look at the pathetic machinations in the Chicago Police Department.  Reminds me of the proud boast from a patronage worker in the political machine: “Chicago ain’t ready for reform!”

Good stuff here.  For more Cato scholarship, go here.

Colbert Report on PATRIOT & Private Spying

Stephen Colbert tackles both Obama’s flip-flop on the PATRIOT Act (“When presidents take office they learn a secret… Unlimited power is awesome!”) and the private sector’s complicity in the growth of the surveillance state—drawing heavily on the invaluable work of Chris Soghoian.

The Colbert Report Mon - Thurs 11:30pm / 10:30c
The Word - Spyvate Sector
www.colbertnation.com
Colbert Report Full Episodes Political Humor U.S. Speedskating

Supreme Court Erases Legal Precedent for Auto Bailout

On Monday the Supreme Court released its last orders for the calendar year. Of particular note – apart from the non-release of the long-awaited decision in the Citizens United campaign finance case – the Court dismissed the cert petition in Indiana State Police Pension Trust v. Chrysler LLC as moot and vacated the underlying Second Circuit opinion. While this is not the ideal outcome – particularly for the Indiana creditors – it is in its own way an important decision preserving the integrity of bankruptcy law.

To recap: In January, Chrysler stood on the brink of insolvency. Purporting to act under the Emergency Economic Stabilization Act, the Treasury Department extended the car company a $4 billion loan using funds from the Troubled Asset Relief Program (TARP). Still in a bad financial situation, Chrysler initially proposed an out-of-court reorganization plan that would fully repay all of Chrysler’s secured debt.

The Treasury rejected this proposal and instead insisted on a plan that would completely eradicate Chrysler’s secured debt, hinging billions of dollars in additional TARP funding on Chrysler’s acquiescence. When Chrysler’s first lien lenders refused to waive their secured rights without full payment, the Treasury devised a scheme by which Chrysler, instead of reorganizing under a chapter 11 plan, would sell its assets free of all secured interests to a shell company, the New Chrysler.

Chrysler was thus able to avoid the “absolute priority rule,” which provides that a court should not approve a bankruptcy plan unless it is “fair and equitable” to all classes of creditors. The forced reorganization amounted to the Treasury redistributing value from senior, secured creditors to debtors and junior, unsecured creditors. The government should not have been allowed, through its own self-dealing, to hand-pick certain creditors for favorable treatment at the expense of others who would otherwise enjoy first lien priority.

While the Court’s ruling prevents the creditors from collecting what would have otherwise been considered their rightful portion of the liquidation, it also erases a terrible precedent from the federal judiciary’s books and reaffirms years of settled bankruptcy law. A decision upholding the Second Circuit’s ruling would have undercut the established practices of bankruptcy and introduced even more uncertainty into a still-uneasy market.

To put it more broadly, the bankruptcy laws are in place to ensure that debts are paid in an established and fair manner and not at the whim of whatever political actors happen to be in power at the time. Taking away that assurance stifles investment and thereby hurts the economy.

Cato joined the Washington Legal Foundation, the Allied Educational Foundation, and George Mason law professor Todd Zywicki on a brief supporting the creditors’ petition that you can read here.  And you can watch Cato’s policy forum on the auto bailout here.

Cell Phone Searches? There’s an App for That.

Police hoping to rummage through a suspect’s cell phone after an arrest must apply for a warrant, the Ohio Supreme Court has ruled. That apparently makes it the first court to address a question I first wrote about two years ago, after Adam Gershowitz broached it in a law review article.

Normally, when police arrest someone—and recall that even trivial offenses may provide formal grounds for arrest—they’re entitled to conduct an incidental search of the person and their immediate vicinity, nominally for the purpose of uncovering any weapons and preventing the destruction of contraband.  The new wrinkle as Gershowitz noted, is that we’ve begun routinely carrying vast stores of personal data around with us in our pockets: photos, correspondence, music and movies,  Internet browsing histories, even whole libraries of books.  What’s more, these little archives are typically connected, sometimes automatically, to still more personal information held remotely: mailboxes, calendars, bank accounts, purchasing histories, or in principle just about anything accessible online.

Suddenly a narrow, reasonable-sounding exception to the ordinary Fourth Amendment warrant requirement starts looking like a pretty huge loophole.  The quantity of personal “papers and effects” that can be stored in an ordinary phone would have filled a house just a few decades ago. But if those smartphones are subject to “search incident to arrest,” there’s no longer any need to bother with judicial authorization for the search of a private home. And since a legal system governed by precedent subjects digital technologies to the tyranny of bad metaphors, there’s a disarmingly strong argument to be made that smartphones should be treated like any other physical “closed container”—a digital backpack or purse, at least with respect to the data stored locally on the phone.

This case involved more conventionally phone-like information: calling records. But the Court nevertheless saw the danger inherent in treating portable data storage devices as mere “containers,” holding that searches of phones were reasonable only to the extent they could be linked to the twin justifications of safety and preventing destruction of evidence.  But as the ruling and dissent both note, there are a handful of precedents that appear to cut in the other direction. The question now is whether other courts will follow Ohio’s lead or remain mired in inapposite comparisons to knapsacks and cigarette packs.