Month: August 2008

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Judge Bates Denies a Stay

            Judge Bates denies the Justice Department’s request for a stay in the Miers case.   His analysis of the four stay factors largely proceeds along the lines I expected.  While I thought he might give some credit to the Executive’s chances of prevailing on appeal simply based on the novelty of the issues presented, he does not: 

Without any supporting judicial precedent whatsoever—and, indeed, in the face of Supreme Court case law that effectively forecloses the basis for the assertion of absolute immunity here—it is difficult to see how the Executive can demonstrate that it has a substantial likelihood of success on appeal, or even that a serious legal question is presented.  The Executive’s argument boils down to a claim that a stay is appropriate because the underlying issue is important.  But that is beside the point and does not demonstrate a likelihood of success on the merits.  Simply calling an issue important—primarily because it involves the relationship of the political branches—does not transform the Executive’s weak arguments into a likelihood of success or a substantial appellate issue. 

            The court also observes that “[h]ad the litigants indicated that a negotiated solution was foreseeable in the near future, the Court may have stayed its hand in the hope the further intervention in this dispute by the Article III branch would not be necessary.”  Judge Bates points out that his prior order “does not compel Ms. Miers to appear at any particular date,” and urges the parties to reach a negotiated solution rather than continuing to bring disputes to the court. 

            I assume that the Executive will now seek a stay from the D.C. Circuit.  If this effort fails (and the odds are that it will), the Justice Department will have four options: (1) work out a negotiated solution with the Committee; (2) make an offer to the Committee that is sufficiently reasonable that it can return to Judge Bates if the Committee refuses; (3) have Miers appear at a Committee hearing and assert executive privilege on a question-by-question basis; or (4) have Miers continue to refuse to appear, risking the possibility that Judge Bates will hold her in contempt.

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Senate Ethics Guidance May Prove a Liability for Stevens Prosecution

            One other motion filed by Senator Stevens should be noted because it refers to what I anticipate will be at the core of his defense.   The issue, explained below, is whether Senate Ethics guidelines clearly require the disclosure of the “things of value” Stevens received. 

            The government charges that Stevens received various things of value over a seven-year period (1999-2006) from VECO and its CEO, Bill Allen, and that Stevens falsified his financial disclosure reports (FDs) for those years by failing to report these things of value as either gifts or liabilities.  In particular, the government alleges that from 2000 to 2006, “STEVENS accepted from ALLEN and VECO more than $250,000 in free labor, materials, and other things of value in connection with the substantial renovation, improvement, repair and maintenance to [Stevens’s personal residence in Girdwood, Alaska].” 

            Significantly, the indictment alleges that these things of value had to be disclosed as either a gift or liability, but does not specify which.  In his motion, Stevens asks: “Was it a gift or liability?  Why did this alleged gift or liability qualify as such under the applicable rules for completing the form in question?  Notably, the monetary disclosure thresholds are vastly different for gifts and liabilities:  during the relevant period a gift had to be disclosed if it exceeded an amount between $260 and $305, while a liability had to be disclosed only if it exceeded $10,000.” 

            In a footnote, Stevens amplifies this point: “Wholly absent from the indictment is any allegation by the government about why the things of value at issue qualified as a ‘gift’ or ‘liability’ as those items are described on the face of the Financial Disclosure Form.  These words, in the context of the completion of the form, are terms of art and cannot be interpreted colloquially or cavalierly.  See Senate Financial Disclosure Report, date 3/08, pp. 14-17, available at http://ethics.senate.gov/downloads/pdffiles/cover1.pdf  (instructions for “Gifts” and “Liabilities” sections) (relevant pages attached as Exh. 1).”  

Piecing these points together with what has been reported about the Stevens case, I anticipate that the Senator’s defense will go something like this: (1) Stevens expected that he would be billed in the ordinary course for any work performed on his house; (2) Stevens paid those bills he received but did not keep close track of what work had been done versus what work was billed; (3) to the extent that work was performed but not billed, Stevens did not understand that he was required to report this as a “liability” on his FD; and (4) a reasonable person, reading the Senate Ethics rules, instructions and guidance would not have understood that there was any such obligation.

From the prosecution’s perspective, the last point could be a bit of a problem. Looking at the Senate FD form, one would be hard-pressed to reach the conclusion that disclosure of unbilled contractor work is required. The page for reporting liabilities states: “Report liabilities over $10,000 owed by you, your spouse, or dependent child . . . to any one creditor at any time during the reporting period. Check the highest amount owed during the reporting period. Exclude: (1) Mortgages on your personal residences unless rented; (2) loans secured by automobiles, household furniture or appliances; and (3) liabilities owed to certain relatives listed in Instructions. See Instructions for reporting revolving charge accounts.”

The language used here directs the filer’s attention to mortgages, financed purchases, credit card balances and similar types of loan transactions. Similarly, the two examples given, “mortgage on undeveloped land” and “promissory note,” suggest the type of transaction associated with the extension of credit, rather than a debt incurred in the ordinary course of commerce.

The Instructions for filling out the FD also are suggestive of a loan-type transaction. For example, the instructions state: “Report the name and address (city, state) of the creditor to whom the liability is owed. You must also indicate the type of liability and date the liability was incurred, interest rate, and term (if applicable) of each liability. The category of value which must be checked is that which indicates the highest amount owed on that liability during the reporting period, not just at the end of the period. If the liability was completely paid during the reporting period, you may also note that on the form if you wish.”

The brief discussion of “liabilities” in the Senate Ethics Manual is similarly indicative of some sort of loan: “Personal obligations aggregating over $10,000 owed to one creditor at any time during the reporting period, regardless of repayment terms or interest rates, must be reported. The identity (name of the creditor), type, interest rate, term and amount of the liability must be stated. Except for revolving charge accounts (e.g. credit card accounts), the largest amount owed during the calendar year is the value to be reported. For revolving charge accounts, the value is determined by using the balance occurring within 30 days of the end of the reporting period (e.g. for annual Reports, the year-end or December balance is used); however, if the revolving charge account is less than $10,000 at the close of the reporting period, no reporting is required.”

With one exception, all of the examples given in these sources, including the examples of things that do not need to be disclosed, involve loan-type liabilities that would ordinarily be owed to financial institutions and carry an interest-rate of some sort. The one exception is that the Ethics Manual notes that Senate filers are “not required to report tax deficiencies [because] such matters involve the government as a creditor, are normally confidential, and may be contested.” Even this example (of something that need not be disclosed) involves a debt that is overdue and carries an interest rate established by law.

It would not be surprising if the average Senate filer, reading these various sources of guidance, reached the conclusion that “liabilities” did not extend to bills received in the ordinary course of commerce. This conclusion is buttressed by a quick review of the most recent FDs of 28 Senators (Akaka through Craig, excluding Bingamin and Corker, whose FDs I could not, for some reason, open). These Senators either reported no liabilities, or reported liabilities such as “mortgage,” “line of credit,” “promissory note,” “credit card,” or “student loan.” None of the FDs reported ordinary debts to contractors or others who provide goods and services without some credit aspect.

Of course, a wider search might yield different results. But one would expect that there would be a fair number of filers in recent years who incur obligations of more than $10,000 to someone during the course of a year. Anyone who has had a kitchen remodeled or any other substantial home project can testify that it doesn’t take much to reach the $10,000 mark. Not to mention things like medical bills or attorneys fees, which can easily reach those levels. If in fact there are few or no Senate filers who have disclosed such items, one could infer that the term “liability” has not been interpreted to reach such ordinary debts.

If Stevens makes this argument, the prosecution will no doubt respond that a debt owed to a contractor falls within the literal language of the Ethics in Government Act, which requires disclosure, with some exceptions not applicable here, of “total liabilities owed to any creditor” (see 5 U.S.C. App. § 102 (a) ((4)). It could rely on Opinion 94-11 (5-25-94) of the Office of Government Ethics, which advised that executive branch employees must disclose “outstanding fees for legal or other services as a liability on a public financial disclosure report.” OGE rejected the argument that the terms “liabilities” or “creditor” could be “limited to cash loans” or “defined in a manner other than their ordinary usage.” It therefore concluded that “[l]iabilities owed to creditors typically include promissory notes, mortgages, debts arising out of installment sales agreements, outstanding fees for personal services, revolving charge accounts such as credit card balances, outstanding bills for consumer goods and services, contractual financial obligations, overdue tax liabilities, and any other debt owed to a creditor.”

There are, however, two problems with this response. First, while OGE has the authority to interpret financial disclosure requirements for the executive branch, it has no such authority with regard to the legislative branch. The fact that the Senate Ethics Committee has apparently chosen not to incorporate OGE’s advice in the guidance provided to Senate filers may suggest that the Committee was not in agreement with this advice. If anything, the Committee’s silence arguably underscores the ambiguity in the instructions provided to Senate filers on this point, ambiguity which, as noted in an earlier post, the court is constitutionally prohibited from resolving with its own interpretation.

Finally, even if the OGE opinion controlled, the prosecution might have a problem. The opinion refers to “outstanding bills” for goods and services, but Stevens did not receive any bills for the services that are at issue. Thus, it is not at all clear, under the OGE opinion, that Stevens would have an obligation to disclose unbilled work as a “liability.”

These considerations suggest that the prosecution may have a difficult time proving that Stevens falsified his FD by failing to disclose liabilities.

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Stevens and Separation of Powers

         Senator Stevens has filed another interesting motion, one that seeks to have his indictment dismissed on separation of powers grounds.  His theory is that the requirement that Senators file financial disclosure statements is one imposed by Senate rule, not by law.  He recognizes, of course, that there is a statute, the Ethics in Government Act, imposing precisely this requirement, but contends that “the Act as applied to a house of Congress must be read as advisory only.”  This is because “Article I, Section 5 specifically reserves to the Senate, not the full Congress, the authority to make rules governing its members, such as the requirement to file a Financial Disclosure Form.”

Stevens appears to be arguing that the Constitution prohibits Congress from enacting laws regulating the conduct of Members of Congress because such regulation is the exclusive province of each House under the Rulemaking and Disciplinary Clauses. If this is his argument, it is an astonishingly broad and radical one. It would suggest, for example, that laws prohibiting Members from accepting bribes or gifts are constitutionally invalid.

Among other problems, this theory contravenes the Supreme Court’s holding more than a century ago in Burton v. United States, 202 U.S. 344 (1906). In Burton (a case not cited by Stevens), the Court upheld the conviction of a U.S. Senator for violating a statute that prohibited any Member of Congress from receiving or agreeing to receive compensation for services before a department of the government in connection with matters in which the U.S. had a direct or indirect interest. In so doing, the Court rejected the argument that enforcing the statute would impermissibly interfere with the Senate’s constitutional authority over its members, under the Disciplinary Clause in particular: “A statute like the one before us . . . can be executed without in any degree impinging upon the rightful authority of the Senate over its members or interfering with the legitimate duties of a Senator.” Id. at 367.

Stevens cites a law review article, Aaron-Andrew P. Bruhl, Using Statutes to Set Legislative Rules: Entrenchment, Separation of Powers, and the Rules of Proceedings Clause, 19 J.L.& Pol. 345 (2003), which makes a rather persuasive case that the Constitution forbids the enactment of legally binding statutes (i.e., statutes which cannot be changed except by a subsequent statute enacted through bicameral passage and presentment) to govern the procedures of either House. But the focus of this article is on legislative procedures, such as fast track, not on regulations regarding the conduct of individual members. It is one thing to argue that each House must remain free to determine how it will consider and pass legislation, and quite another to suggest that Congress is disabled from requiring, by law, that members conduct themselves ethically while in office.

Interestingly, though, Stevens did not have to argue that Congress is constitutionally prohibited from enacting laws governing its members. He could have simply argued that in the case of the Ethics in Government Act, Congress chose not to do so. This is because Pub. L. 101-194, which re-enacted the financial disclosure and other requirements of the Act as applied to Congress, explicitly states that it is enacted with respect to the Members, officers and employees of the legislative branch “as an exercise of the rulemaking power of the House of Representatives and the Senate, respectively.” Moreover, the law provided that this exercise of the rulemaking power was “with full recognition of the constitutional right of either House to change such rules (so far as relating to such House) at any time, in the same manner, and to the same extent as in the case of any other rule of such House.”

These provisions create a constitutional puzzle. If, in fact, either House can change the provisions of the Ethics in Government Act with respect to its members by a unilateral exercise of its rulemaking power, then those provisions would appear to be what Bruhl calls “statutized rules.” It is certainly questionable whether the executive and judicial branches would have any proper role in enforcing or applying these rules with regard to Members of Congress. Conversely, it could be argued the Ethics in Government Act is in fact a proper law, and thus Congress has no authority to change it without complying with the requirements for amending a statute, notwithstanding its attempt to reserve that authority.

The D.C. Circuit’s decision in United States v. Rose, 28 F.3d 181 (D.C. Cir. 1994), lends some support to the latter position. In that case the court rejected the argument that the Justice Department had violated separation of powers principles by bringing suit against a congressman under the Ethics in Government Act after the House Ethics Committee had determined that the financial disclosure violations at issue had been inadvertent. The court explained:

We do not think the DOJ’s action against Congressman Rose offends the separation of powers doctrine. The DOJ brought this action under section 706 of the Ethics Act, which authorizes it to investigate and prosecute “knowing and willful violations of the Act. It is true that the disclosure requirements of the Ethics Act applicable to Members of Congress have been incorporated into the House Rules . . . , which are enforced by the House pursuant to its constitutional power to discipline its Members. But by codifying these requirements in a statute, Congress has empowered the executive and judicial branches to enforce them; in bringing this action, then, the DOJ was fulfilling its constitutional responsibilities, not encroaching on Congress’s.

This language appears to reject any implication that the financial disclosure requirements of the Act are merely exercises of the rule-making power as applied to Members, officers and employees of the legislative branch. However, the court’s opinion does not directly address the reservation of authority language contained in Section 1201 of Pub. L. 101-194.

Stevens, incidentally, tries to get around the holding in Rose by arguing that it was somehow superseded by the Supreme Court’s holding in Clinton v. New York, 524 U.S. 417 (1997) (the line item veto case). I find this reasoning rather hard to follow. The line item veto case has nothing to do with Congress’s authority to enact statutory restrictions on its members. The Court does say, as Stevens notes, that one branch may not abdicate its constitutional powers to another, but this begs the question of whether statutes like the Ethics in Government Act represent an abdication of the congressional rulemaking and disciplinary powers or a proper exercise of the legislative power (as suggested by Burton, Rose, and other cases).

In any event, there is an additional problem with Stevens’s argument. He is not being prosecuted for violating the Ethics in Government Act. He is being prosecuted for violating the False Statements Act. Unlike the Ethics in Government Act, the False Statements Act does not purport to be an exercise of the congressional rulemaking power. Indeed, it would seem to be a “law of general applicability” (i.e., one that does not purport to impose any obligations upon Members of Congress different from those imposed on other citizens), for which, even Stevens acknowledges, Members of Congress can be prosecuted.

Moreover, it is well-established, at least in the D.C. Circuit, that the government may rely on unambiguous congressional rules as part of its proof of a statutory violation. Thus, for example, in a prosecution of a Representative for fraud and embezzlement of public funds, the government may introduce the House Rules to show that the defendant’s use of the funds in question was for an unauthorized purpose. United States v. Rostenkowski, 59 F.3d 1291 (D.C. Cir. 1995). Nor can there be any serious question that this remains the law of the circuit. As recently as last year, the D.C. Circuit relied on a rule of the House Ethics Committee in determining that a Representative could be held liable for violating the statute prohibiting disclosure of unlawfully intercepted communications. Boehner v. McDermott, 484 F.3d 573 (D.C. Cir. 2007) (en banc).

Stevens thus has virtually no chance of prevailing on his motion to dismiss at this juncture. But he is not totally out of luck. Under the Rostenkowksi case, if the Senate rules regarding financial disclosure are shown to be ambiguous with regard to the conduct charged, the separation of powers doctrine would require the court to dismiss the charge(s) in question rather than interpret the ambiguous rule. This would most likely come up with regard to the Senate rules regarding disclosure of liabilities. The instructions of the Senate Ethics Committee regarding the reporting of liabilities are very brief and do not clearly state whether ordinary debts incurred in the course of commerce need be reported. Stevens could argue that these instructions are ambiguous as applied to his situation and thus cannot be used as a basis for prosecuting him.

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The Prosecution’s Assault on Senator Stevens’ Legislative Privilege

       The prosecution’s motion in limine in the Stevens case lays out the evidence that it intends to introduce “concerning solicitations made by [VECO] and its executives or non-legislative acts taken by Senator Theodore F. Stevens or his staff in response to VECO’s solicitations.”  The government seeks a ruling in advance of trial that such evidence does not run afoul of the Speech or Debate Clause.  As I will suggest below, a significant amount of this evidence does in fact appear to violate the letter and/or spirit of the Speech or Debate Clause.

The prosecution’s evidence can be broken down into three categories. First, there is evidence regarding assistance requested from or provided by Stevens and/or his staff with regard to executive agencies or foreign governments. These matters involve interventions by Stevens or his office in furtherance of VECO’s business interests. For example, in 1999 Stevens allegedly arranged a meeting between VECO and FEMA “for VECO to attempt to obtain a federal contract, through FEMA, to do rebuilding in the former Yugoslavia.” Similarly, in 1999 Stevens and VECO President Allen are said to have traveled to Sakhalin Island to meet with Russian officials as part of an effort by VECO to obtain contracts from the Russian government.

Generally speaking, this type of “constituent service” is not covered by the Speech or Debate Clause. Although the courts have recognized that it is common and appropriate for Members of Congress to perform a variety of services on behalf of their constituents, these services do not fall within the “legislative sphere” protected by the Speech or Debate privilege.

The second category of evidence relates to requests for assistance which appears to be legislative in nature. For example, in 2004 Allen allegedly wrote to Stevens seeking a $5 million earmark in one of the FY 2005 Appropriations Bills.

Here the prosecution’s theory is that although the assistance requested is legislative in nature, the request itself is not. The government relies primarily on United States v. Helstoski, 442 U.S. 477, 489 (1979), which held that a promise to perform a legislative act in the future is not a legislative act. Thus, in a bribery case the government can show that the bribed official agreed to perform a legislative act in exchange for money so long as it introduces no evidence regarding the actual performance of the legislative act. The government argues that “[i]f a Member’s agreement to perform a future act is not privileged, it logically follows that a constituent’s request for assistance is not shielded by the Clause either. A Member cannot agree to perform a future official or political act if a constituent has not asked for one.”

The government also relies on cases which hold that the Speech or Debate Clause does not apply to communications outside the “halls of Congress.” An example would be Hutchinson v. Proxmire, 443 U.S. 111 (1979), which held that the Speech or Debate Clause did not protect a Senator against defamation claims relating to statements made to the press or the general public.

The government’s theory raises fundamental questions about the scope of the Speech or Debate Clause. Although it is true that the case law it cites contains broad language limiting the reach of the Clause’s protections, that language has been applied in the specific context of bribery or defamation-type cases. Under the government’s theory, this language could be used to eviscerate the Clause’s protections entirely. For example, while the government could not introduce evidence that Stevens voted to approve the FY 2005 earmark in question, it could introduce evidence of (a) any requests made by VECO or others that Stevens support this earmark, (b) any discussions that Stevens may have had regarding the earmark in advance of the actual vote, and (c) any communications that Stevens made “outside the halls of Congress” regarding the vote after it occurred. It is difficult to see what would be left of the privilege at that point.

The final category of evidence relates to actions and communications relating to a major public policy issue in the State of Alaska, the construction of a natural gas pipeline within the state. This issue evidently involved a complex interaction between state and federal jurisdiction, and required both federal and state legislation, as well as other governmental actions, to resolve.

The government’s theory here, consistent with its views with regard to the earmark, is that all of the evidence relating to this category, except perhaps direct evidence of how Stevens voted on the federal enabling legislation, is beyond the scope of Speech or Debate. Thus, “when Senator Stevens provided VECO with e-mail communications, status reports, and other forms of updates concerning the federal enabling legislation dealing with the natural gas pipeline,” these communications were unprotected by Speech or Debate. Similarly, communications or actions by Stevens and his staff relating to the state legislation that was required in order to implement the federal enabling legislation would also be unprotected. An example would be a speech given by Stevens on July 7, 2006 to the Alaska Senate Energy and Natural Resources Committee in which he urged the committee to pass the pipeline legislation in order to prevent the pipeline project from being crippled. The government argues that this speech is unprotected both because it was made outside the halls of Congress and because it addressed state, not federal, legislation.

I find this troubling for several reasons. If the Speech or Debate Clause means anything, one would think that it means that the government cannot prosecute a Member of Congress for the legislation that he has supported and the policies he has advocated in his official capacity. But under the government’s theory, unless the Member’s statements and activities remain hermetically sealed within the halls of Congress, the privilege is of little effect.

Furthermore, the natural gas pipeline is far from the type of constituent service where a Member of Congress seeks to provide assistance to a single company or a few individuals. This was a matter of major economic interest to Alaska as a whole. It involves a major piece of federal legislation that Senator Stevens sponsored and pushed through Congress. Given the close connection between this legislation and the state legislation it required, it would be difficult to “question” Stevens’ involvement in the latter without implicating his role in the former. As Stevens explained in a March 9, 2007 speech to the Alaska legislature:

Given the current climate in Washington, D.C., it is vitally important for our Congressional delegation to work closely with you. Alaska succeeds when Alaskans work together.

The first test of our partnership begins with the gas pipeline. Alaska’s gas resources – 35 trillion cubic feet of natural gas, an estimated 200 trillion cubic feet of conventional gas resources, and 32,000 trillion cubic feet of gas hydrates – will help chart the course for the next generation of energy development in our country.

Our pipeline authorization process, which began with passage by Congress of the Alaska Natural Gas Pipeline Act in 2004, must overcome many hurdles before the first pipe is laid.

*

Before construction can begin, our pipeline must go through several permitting processes, including approval by this state, FERC, and, perhaps, action by Canada. The timeline for our approval of the gas pipeline is very short. It is imperative that we act this year.

I met with Governor Palin in Washington and am encouraged by her efforts thus far. It is my hope that your review of Governor Palin’s plan will be completed as soon as possible. When the state has acted, our delegation will do all we can to accelerate federal review of the final design, precise location, and approval of the project, which will take time.

As this indicates, the pipeline project was an integrated effort involving Alaska’s congressional delegation as well as the Governor and state legislature. Even if part of this effort, such as Stevens’ communications with the Alaska legislature in support of the state legislation, is arguably unprotected by the Speech or Debate Clause, there is no way that the government could introduce evidence regarding isolated parts without implicating the whole.

Indeed, the reason that the prosecution seeks to introduce this evidence in the first place is to show that Stevens’ actions on the pipeline were taken on behalf of or for the benefit of VECO. In order to defend against this implication, Stevens will be required to put on evidence regarding the entire project, including the aspects that are clearly within the legislative sphere. The effect will be to have a mini-trial regarding the merits of Stevens’ legislative agenda with regard to the pipeline project, tried before a Washington, D.C. jury (if the government succeeds in fighting Stevens’ motion to move the trial to Alaska) disinterested in, if not actively hostile to, the Alaskan economic interests at stake. Such a spectacle would seem to strike at the very core of the protection the Speech or Debate Clause was intended to provide.

IMHO, the court should reject the prosecution’s attempt to introduce evidence in categories 2 and 3. In fact, given the peripheral nature of the point the government is trying to make (that Stevens’s relationship with VECO establishes his motive and intent with regard to omitting matters from his financial disclosure statement), it could be argued that all or almost all of this evidence is more prejudicial than probative. The government should have no need to establish anything beyond the (presumably uncontested) fact that VECO and Allen sought assistance from Stevens and his office on various occasions during the relevant time period.

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Senator Stevens’ Speech or Debate Defense

 

Senator Stevens’s lawyers have filed a blizzard of motions attacking the indictment against him.  One contends that the indictment violates the Speech or Debate Clause of the Constitution.   For the reasons set forth below, it is highly unlikely that Stevens will be successful in having the indictment dismissed on this basis.  Making this argument, however, could be to Stevens’s advantage for two reasons: (1) it focuses the court’s attention on some of the peripheral allegations of the indictment, which could lead to the court limiting the government’s ability to present evidence on these allegations and (2) it creates an opportunity for Stevens to take an immediate appeal, which could result in delaying the trial.  Stevens’s Speech or Debate theory is focused on Paragraph 17 of the indictment, which states:

                                                                                                                                                                                                                                                

 17.  It was part of the scheme that STEVENS, while during that same time period that he was concealing his continuing receipt of things of value from ALLEN and VECO from 1996 to 2006, received and accepted solicitations for multiple official actions from ALLEN and other VECO employees, and knowing that STEVENS could and did use his official position and his office on behalf of VECO during that same time period.These solicitations for official action, some of which were made directly to STEVENS, included the following topics: (a) funding requests and other assistance with certain international VECO projects and partnerships, including those in Pakistan and Russia; (b) requests for multiple federal grants and contracts to benefit VECO, its subsidiaries, and its business partners, including grants from the National Science Foundation to a VECO subsidiary; and (c) assistance on both federal and state issues in connection with the effort to construct a natural gas pipeline from Alaska’s North Slope Region

Stevens accuses the government of  “the strategic use of pluralization and the word ‘including’” so as to sweep potential legislative acts within the broad scope of activities for which Steven received solicitations. Thus, for example, the “official action” requested could have been a phone call to an executive branch official urging favorable consideration of VECO’s application for a contract or grant, which would not be a legislative act protected by the Speech or Debate Clause, or voting for an earmark in an appropriations bill, which would be.

Even if Paragraph 17 refers to legislative acts, however, this would not necessarily violate the Speech or Debate Clause. Under the confusing and rather illogical framework established by the courts, references to future legislative acts are not themselves considered to be protected by the privilege. Thus, the government may be permitted to show that Stevens received solicitations to perform legislative acts, so long as it does not allege or prove that he actually performed such acts.

On the other hand, the first sentence of Paragraph 17 alleges that someone (presumably the conspirators) performed their concealment “knowing that Stevens could and did use his official position and his office on behalf of VECO.” This sentence isambiguous (in addition to being confusing and rather ungrammatical) with regard to whether the government is alleging only the state of mind of the conspirators (i.e., what they thought they knew about Stevens’s previous actions) or what Stevens actually did. If the former, the Speech or Debate Clause arguably would not apply. In the McDade case, for example, the Third Circuit rejected a Speech or Debate challenge to the indictment, explaining that “the indictment relies on the defendant’s committee status, not to show that he actually performed any legislative acts, but to show that he was thought by those offering him bribes and illegal gratuities to have performed such acts and to have the capacity to perform other similar acts.”

Given the case law, there seems to be little ground for arguing that the indictment on its face violates the Speech or Debate Clause. Moreover, as Stevens himself argues, the allegations of Paragraph 17 are not necessary to the counts against him. Even if the grand jury was exposed to some Speech or Debate material in connection with these allegations, this would not be the sort of wholesale violation of the privilege that would permeate the grand jury proceedings and warrant the dismissal of the indictment.

Nevertheless, by making this motion, Stevens may hope to sensitize the court to the fact that the government is trying to introduce a great deal of evidence regarding his official actions, many of which are, at the very least, closely related to his legislative activities. The government is not alleging that these actions were a quid pro quo for the favors Stevens allegedly received from Allen or VECO, or that they were otherwise part of any criminal conduct. Stevens is not charged with bribery or with receiving gifts related to official actions. Instead, he is charged with falsifying his financial disclosure statements by failing to include gifts received from or liabilities owed to Allen or VECO.

The government contends that Stevens’s official actions demonstrate “Senator Stevens’ intent and his motive to conceal the substantial benefits he received from VECO.” It is questionable, however, how much probative value this evidence actually has. If Stevens was receiving gifts from VECO, his motivation not to disclose them seems clear, since such accepting such gifts would violate the Senate’s rules. Indeed, one assumes that Stevens’s defense will not be based on the absence of motivation to conceal the payments in question, but on the fact that he did not know he was required to disclose these payments.

It might be argued that if Stevens were to disclose gifts from or liabilities to a company with substantial business interests that could be impacted by his official actions, this might attract more attention than a similar disclosure related to a company with no such interests (assuming one could find a company with no interests impacted by the chairman of the Senate Appropriations Committee). But this seems like a fairly tangential point, one that could be made without a detailed recitation of all the assistance sought by VECO or provided by Stevens. The real point of the evidence the government seeks to submit may be to prejudice the jury against Stevens by implying bribery without actually alleging or proving it.

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Will Judge Bates Issue a Stay in the Miers Case?

           In his July 31 decision on the congressional subpoenas to Harriet Miers and Josh Bolten, Judge Bates noted “the likelihood of appeal of this decision,” and he observed that “given the significance of the issues involved, a stay pending appeal is at least possible.”  The court will now have to resolve this issue because the Justice Department has filed a notice of appeal and moved for a stay.  

            Notwithstanding the court’s evident willingness to consider a stay, I think the Justice Department has an uphill battle here.  In evaluating a stay, the court is required to weigh four factors: (1) the likelihood that the Executive will prevail on the merits of its appeal; (2) the likelihood that the Executive (or Miers/Bolten) will suffer irreparable harm without a stay; (3) the harm that will be caused to the House or others by granting a stay; and (4) the public interest.

(1). The chances of the Executive prevailing on appeal seem low. Judge Bates firmly rejected the Justice Department’s main argument, which was that the House lacked standing to bring the lawsuit. His opinion concludes that “[c]lear judicial precedent, along with persuasive reasoning in OLC opinions, establishes that the Committee has standing to pursue this action and, moreover, that this type of dispute is justiciable in federal court.” Nothing in his opinion suggests that he viewed this as a close question.

The court was even more emphatic in rejecting the absolute immunity argument advanced by the Justice Department, describing it as “unprecedented” and “without any support in the case law.” After dismissing the Reno and Bradbury opinions which attempted to support this argument as “for the most part conclusory and recursive,” the court concluded that “[c]lear precedent and persuasive policy reasons confirm that the Executive cannot be the judge of its own privilege and hence Ms. Miers is not entitled to absolute immunity from compelled congressional process.”

The court also rejected the Justice Department’s contention that the complaint be dismissed because there was no cause of action authorizing the lawsuit. It did so on two alternative grounds, finding first that the case could be brought under the Declaratory Judgment Act without a free-standing cause of action and that in any event the Committee had an implied cause of action derived from Article I to seek a judicial declaration concerning the exercise of its subpoena power. The court acknowledged, however, that these were fairly novel questions and that there was little case law on point.

Given that direct litigation between the political branches is rare, and the lack of directly applicable precedent on the cause of action issue, the court will probably acknowledge that there is some possibility that the Executive will prevail on the merits of its appeal. Of course, this assumes that the court’s order is in fact appealable, which is also uncertain. All in all, it seems likely that the court will find that the first factor at most mildly favors the granting of a stay.

(2). The biggest obstacle faced by the Executive is substantiating the claim that it will suffer irreparable injury if a stay is not granted. The thrust of the argument is that Judge Bates’s order “negates” Miers’s asserted absolute immunity by ordering Miers to appear and testify before the Committee.

There are several problems with this argument. First, even if Miers were to appear before the Committee, it is difficult to see how this would cause the Executive irreparable injury. The only injury that the Justice Department has identified that might conceivably be caused by such an appearance would be a rather intangible injury to presidential “autonomy.” But the court has already dismissed this notion, noting that “the Executive’s interest in ‘autonomy’ rests upon a discredited notion of executive power and privilege.”

Second, it is difficult to see how a single appearance by Miers could cause serious, much less irreparable, harm of any kind. The Justice Department has suggested that permitting Congress to subpoena senior White House officials would give Congress the ability to undermine the President’s independence and autonomy by allowing it to summon his advisers at will, thus leaving him exposed to harassment and his advisers subject to potentially vexatious or oppressive questioning. But whatever one thinks of this specter, it is one that would emerge over time, not as the result of a single appearance by a former WH counsel regarding a subject the court has already found to be a proper matter for congressional inquiry.

The mere fact that Miers should appear before the Committee does not, of course, prevent the Executive from asserting its absolute immunity theory with respect to other congressional subpoenas, including subpoenas that are currently outstanding to other senior officials, such as Karl Rove. It is possible that Miers’s appearance would moot the absolute immunity issue here, thus depriving the Executive of the ability to preserve the issue for appellate review with respect to this particular case. Even that is not certain, however, as the court of appeals might consider the issue in the context of a subsequent refusal by Miers to answer particular questions posed by the Committee. In any event, it seems highly doubtful that the possibility of mooting the absolute immunity issue would be considered an irreparable injury.

The idea that Miers’s appearance would cause irreparable injury is further undermined by the fact that the Executive has already offered to have Miers appear, in private, and answer questions posed by the Committee. It is difficult to see how there could be irreparable injury from Miers’s mere appearance if the Executive has already offered such an appearance. (As far as I know, the Executive has not claimed that her appearance in a public setting would cause a discrete injury and any such injury could be remedied by having her appear in closed session). Moreover, as the court pointed out in its opinion, “the historical record produced by the Committee reveals that senior advisors to the President have often testified before Congress subject to various subpoenas dating back to 1973.”

Finally, it is critical to note, as the court repeatedly emphasized in its opinion, that Miers has not been ordered to answer any questions, and that the court has not addressed the merits of any particular assertion of executive privilege. There is nothing in the court’s opinion that prevents Miers from appearing and refusing to answer every question that calls for non-public information. Thus, the Executive can hardly claim that a stay is needed to protect its confidentiality interests.

Indeed, the court did not even order Miers to appear before the Committee. The court’s order declares that Miers “is legally required to testify pursuant to a duly issued congressional subpoena from plaintiff,” but it does not order her to appear at any particular date and time. Judge Bates, in fact, implies at times that the court’s power may be limited to issuing declaratory, as opposed to injunctive, relief. At any rate, at this juncture the court has done no more than declare Miers’s duty to appear. As the judge repeatedly emphasized, it is his strong desire that the parties themselves work out the remainder of the dispute without the need for any further judicial intervention.

The only thing that the court actually ordered was the production of “non-privileged” documents and further description of documents withheld. Since it is up to the Executive in the first instance to decide which documents it believes are “non-privileged” and to decide how much of a description to give, this order hardly can be viewed as causing irreparable damage.

For these reasons this factor should cut heavily against the granting of a stay.

(3). The court must also consider the harm that granting a stay would cause to the House and to the Committee. Judge Bates has already found that the Committee is conducting an appropriate and legitimate investigation into the termination of U.S. Attorneys and that the refusal to respond to the subpoenas had caused an information injury to the Committee. Although the court did not attempt to quantify this injury, it seemed to acknowledge the importance of the information sought when it credited the Committee’s finding that “Ms. Miers had played a significant personal role in the termination decision-making.”

Furthermore, the court has already recognized that time is short, and that the end of the 110th Congress could moot the subpoenas. Granting a stay would likely make it impossible for the Committee to obtain the information it seeks before the Committee itself (technically) expires at the end of the Congress.

The harm to the Committee appears particularly acute when one considers the context of the negotiations between the parties. Judge Bates has noted that “the record reflects that it was the Executive and not the Committee that refused to budge from its initial bargaining position.” He also observed that “the prospect of ultimate judicial resolution will help to ensure that the parties continue to negotiate in good faith rather than rewarding intransigence.”

Given these statements by the court, it is somewhat surprising that the Executive has apparently not made any new offer to the Committee to attempt to meet the Committee’s need for information. One obvious possibility would be for the Executive to reiterate its offer of a private interview with Miers (limited to Miers’s communications with persons outside the WH), but without the “poison pill” condition that the Committee waive its right to seek additional information. Alternatively, the Executive could at least offer to allow Miers to appear before the Committee (or staff) in closed session so that Miers could invoke executive privilege on a question-by-question basis. By failing to make any such proposals, the Executive creates the impression that it is not interested in meeting the Committee’s need for information or even in moving the process forward, but is simply trying to run out the clock.

Perhaps recognizing this problem, WH Counsel Fred Fielding wrote to Chairman Conyers on August 8, stating “the fact that the Executive has noticed an appeal in this matter does not signify that we think further litigation is the exclusive way forward.” Fielding proposed further talks to reach an accommodation between the branches. At the moment, however, there is nothing on the table that would seem to mitigate the harm that the Committee and House will suffer by virtue of the granting of a stay. Indeed, one could say that the issuance of a stay at this point would reward the Executive’s intransigence.

This factor therefore weighs against the granting of a stay.

(4). The court has also recognized the case “raises issues of enormous ‘public importance.’” Whether this statement referred to the legal issues in the case and/or the factual and public policy issues in the underlying investigation is unclear, but the court made several statements which suggested it viewed the investigation itself as significant to the public interest.

Indeed, perhaps the most surprising aspect of Judge Bates’s opinion was the degree to which he seemed to accept the Committee’s characterization of the underlying investigation into the firing of the U.S. Attorneys. For example, he suggested that the congressional investigation in McGrain v. Daugherty, 273 U.S. 135 (1927), involved “nearly the identical subject matter that the Committee is investigating.” The Committee’s investigation, he explained, is not merely “into the Executive’s use of his removal power but rather a broader inquiry into whether improper partisan considerations have influenced prosecutorial discretion.” At another point, he stated that “Congress’s use of (and need for vindication of) its subpoena power in this case is no less legitimate or important than was the grand jury’s in United States v. Nixon.” [note: Judge Bates appears to be under the impression that the Nixon case involved a grand jury subpoena, whereas in fact it was a criminal trial subpoena].

To the extent that Judge Bates is equating the firing of the U.S. Attorneys with Teapot Dome (McGrain) or Watergate (Nixon), I think he has gone a little over the top. Nevertheless, he clearly believes that this investigation serves an important public interest, and therefore he will likely find that this factor also cuts against the issuance of a stay.

The Justice Department will probably contend that there is an important public interest in having the court of appeals review the significant legal issues in this case. As already noted, however, it is by no means clear that a stay is needed to preserve the possibility of appellate review. Moreover, to this logic would suggest that the Executive is more interested in obtaining appellate review than in trying to work out a resolution that could satisfy the interests of both branches. It seems highly unlikely that Judge Bates, who emphasized the importance of attempting to resolve the parties’ differences through negotiation and accommodation, would accept this logic.

For all of these reasons I predict that Judge Bates will deny the request for a stay pending appeal.

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Legal Background on the Stevens Indictment

        This post sets forth a little legal background that may be helpful in understanding this week’s indictment of Senator Ted Stevens (R-AK).   

Stevens is charged with failing to disclose, on his annual financial disclosure form (FD), hundreds of thousands of dollars in goods and services he received from a private corporation and its CEO from 1999 to 2007.  Prosecutions of Members of Congress (or, I suspect, anyone else) for failing to make disclosures on their FDs are rare, but not unheard of.  As Dennis Thompson notes in Ethics in Congress, “[l]ike mail fraud and income tax evasion, disclosure offenses are sometimes used to reinforce charges that investigators regard as more serious but for which they have less conclusive evidence.”

The seminal case is United States v. Hansen, 772 F.2d 940 (D.C. Cir. 1985). Hansen was a former Representative from Idaho, who was indicted on four counts “for failing to disclose, respectively, a $50,000 bank loan to his wife, cosigned by Nelson Bunker Hunt, on his form for 1978, an $87,475 silver commodities profit on his form for 1979, a $61,503.42 loan from Nelson Bunker Hunt on his form for 1980, and $135,000 in loans from private individuals on his form for 1981.” Hansen was convicted, and raised a number of arguments on appeal, all of which were rejected by a panel that included then-Judges Antonin Scalia (who authored the opinion) and Ruth Bader Ginsberg.

Hansen’s primary argument was that the Ethics in Government Act, which established the requirement of filing annual FDs, provided for only civil, not criminal, penalties for false filings, and that it was therefore contrary to congressional intent to impose criminal sanctions for such filings under the False Statements Act. The court reviewed the text and legislative history of the Ethics in Government Act and concluded that, while it was clear that this statute provided for only civil penalties and that provisions for criminal sanctions in earlier versions of the legislation were dropped because of opposition by some members of Congress, there was no clear and manifest indication of an intent to repeal the False Statements Act with respect to this particular area. Judge Scalia, not surprisingly, gave no weight to the fact that 123 members of Congress filed an amicus brief supporting Hansen on this point.

Hansen also argued that the omissions from his financial disclosure form were not material. As described by the court, “[t]he test of materiality is whether the statement ‘has a natural tendency to influence, or was capable of influencing, the decision of the tribunal in making a [particular] determination.’” Hansen pointed out that in his case there was no tribunal conducting any type of investigation or making any type of determination that might have been affected by the failure to disclose the debts and transactions in question.

The court, however, rejected this argument as well. Judge Scalia noted that the FDs are forwarded to the House Ethics Committee, which is charged by the House with the duty of investigating potential ethical violations by its members. He observed that there could be no doubt that the particular omissions in question had the natural tendency to influence an investigation by the Committee because “after [the omissions] came to light, the Committee undertook an investigation and concluded that the transactions violated House Rules.” In any event, the court concluded that the question of materiality “does not require judges to function as amateur sleuths” by determining whether omitted information would actually been sufficient “to alert a reasonably clever investigator that wrongdoing was afoot.” It was enough that “[h]ere the falsifications related to financial transactions within the Committee’s charge, and tended to conceal information that would have prompted investigation or action; no more is needed.”

The court’s conclusion in this regard may have been affected by its holding, following D.C. Circuit precedent, that the question of materiality was an issue of law for the court, not an issue of fact for the jury. That holding, however, was overruled 10 years later by the Supreme Court in United States v. Gaudin, 515 U.S. 506 (1995) in an opinion written by none other than Justice Scalia. No longer bound by D.C. Circuit (or Supreme Court) precedent, Justice Scalia found that “[d]eciding whether a statement is ‘material’ requires the determination of at least two subsidiary questions of purely historical fact: (a) ‘what statement was made?’; and (b) ‘what decision was the agency trying to make?.’” The Court held that it was for the jury to answer these questions and to make the ultimate determination of materiality by applying the materiality test (did the false statement have a natural tendency to influence, or be capable of influencing, the decision in question).

Another aspect of the Hansen case was overruled by the Supreme Court in United States v. Hubbard, 514 U.S. 695 (1995). In Hubbard the Court held that (longstanding precedent to the contrary notwithstanding) the False Statements Act applied only to statements made to the executive branch, as opposed to statements made to the legislative or executive branches. In the aftermath of Hubbard, therefore, there were no criminal penalties applicable to filing of false FDs.

However, Congress responded to the Hubbard case by enacting amendments to the False Statements Act (codified at 18 U.S.C. § 1001) in 1996. These amendments made clear that the Act did in fact apply to matters within the jurisdiction of the executive, legislative or judicial branches. The 1996 amendments, however, did not make the False Statements Act applicable to all statements made to the legislative branch. Instead, the amendments provided that the law would apply only to (1) administrative matters, including a claim for payment, a matter related to the procurement of property or services, personnel or employment practices, or support services, or a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch or (2) any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate.

The House Report on the amendments (H.Rep. 104-680) notes that “[o]ver the last four decades, section 1001 has been used to prosecute Members of Congress who lie on their financial disclosure forms, initiate ghost employee schemes, knowingly submit false vouchers, and purchase personal goods and services with taxpayer dollars,” and specifically cited Hansen for the proposition that the False Statements Act had been applied to filings under the Ethics in Government Act. The report leaves no doubt that it was Congress’s intent to reinstate holdings such as Hansen and ensure that the False Statements Act would apply to “all financial disclosure filings, including those required pursuant to the Ethics in Government Act.”

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The Miers Case- Where do the Parties Go from Here?

The six points laid out by Judge Bates (listed in my last post) should be instructive to both parties as they move forward.  For the executive branch, it should be evident that it made a mistake in refusing to have Miers appear in response to the congressional subpoena.  By doing so, it presented the court with a pure legal issue that could be resolved without getting into the disputed and politically contentious facts regarding the U.S. Attorney firings.  Had Miers appeared and refused to answer particular questions on the grounds of executive privilege (as WH aide Sara Taylor did), it would have been far more difficult for the House to prevail. 

The executive branch attempted to mitigate this weakness in its litigation posture by offering to have Miers appear and answer questions in a private, unsworn and untranscribed interview with the Committee.  However, as Judge Bates states, the executive branch undercut itself by adhering to its original proposal without modification.  Although not stated by the judge, one must assume that he thought that proposal was unreasonable or inadequate in some respect.  It seems to me that the insistence that the Committee give up the right to seek any further information as a condition of obtaining the interview was an obvious non-starter.  Had the executive branch dropped this condition, the case might have come out differently. 

The executive branch will undoubtedly be tempted to appeal this ruling to the D.C. Circuit.  The first problem that it will face is whether this is an appealable order.  Certainly it is not a final order.  Frankly, I don’t know enough about this area to say one way or the other, although I am told that there is a recent D.C. Circuit case (involving subpoenas to Members of Congress) that would suggest this is not appealable.

Assuming that this hurdle can be surmounted, however, is it wise for the executive to appeal?  Appealing the case in the current posture places the executive branch in the same difficulty it was in before the district court.  It will be defending very problematic legal positions on standing and absolute immunity in a complete vacuum.   

Although there is a solid majority of Republican appointees on the D.C. Circuit, there is no guarantee that this will give the executive a more sympathetic audience for its positions.  One of the Republican appointees, Judge Thomas Griffith, previously served as Senate Legal Counsel and has a keen appreciation of the congressional perspective on these issues.  Another, Judge Ginsberg, served on the three-judge district court that upheld congressional standing in the census litigation based in part on the fact that congressional standing to enforce subpoenas was well-established.   And, in general, it is hard to see anything in Judge Bates’s thorough and well-reasoned opinion that would likely lead to a reversal by the appellate court. 

Of course, appealing the decision would take time, and the appeal might not be decided before the Bush Administration’s term expires.  Nonetheless, the Administration has to be concerned about creating yet another judicial precedent that will restrict the authority and autonomy of the executive branch.  And it is not as if appealing the decision makes it likely that these matters will be off the public radar.  The Senate Judiciary Committee has already jumped on Bates’s opinion to renew calls for Karl Rove and Josh Bolten to respond to subpoenas.   

The executive branch would be better advised to offer a private interview with Miers on the condition that any questions she answers would remain subject to a claim of executive privilege.  The Committee would have to agree that following the interview (which would be transcribed) the parties would take any disputed questions and answers back to the court, and that those parts of the interview would remain sealed until there was a final ruling on the privilege issues.  This proposal would seem to satisfy the Committee’s legitimate investigative needs and it would be difficult for the Committee to refuse without losing the high moral ground that allowed Judge Bates to exercise his discretion in its favor. 

Perhaps the most vexing question has to do with how such a proposal would impact the contempt matter involving Karl Rove, who, as Judge Bates noted, was subpoenaed by the Committee to testify about alleged political prosecutions and refused to testify based on absolute immunity.  It would likely be in the executive branch’s interest to make a similar offer for Rove to testify privately and to reserve questions about executive privilege.  On the other hand, the Committee is undoubtedly much more eager to haul Rove into a public hearing than it is Miers.  Moreover, in Rove’s case there is no readily available forum to decide the privilege issues (even if the parties were to agree to submit them to Judge Bates, I doubt he would agree to resolve them).   

Because the Rove matter is not pending before Judge Bates, I doubt that he would look kindly on any attempt by either party to tie it to resolution of the matters that are before him.  Therefore, if the Committee chooses to treat the Rove matter differently from the Miers matter, there is probably nothing that the Administration can do about it.  From a public relations standpoint, though, the Administration would be able to say that it made the same offer with regard to Rove as it did for Miers.

 

 

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More on Equitable Discretion

Below are the six reasons given by Judge Bates as to why he would exercise his discretion to issue a ruling in the Miers case.  In my next post I will consider how these points may impact the parties as they go forward. 

(1)  judicial resolution would settle this dispute between the parties as to whether Ms.

Miers is absolutely immune from congressional process and whether Mr. Bolten must respond further. Resolution of the immunity issue will determine the next steps (if any) the parties must take in this matter.  

(2) contrary to the Executive’s suggestion that the Committee did notmake any serious counter-offers, the record reflects that it was the Executive and not the Committee that refused to budge from its initial bargaining position.  Mr.Fielding himself stated that the Committee had written to him “on eight previous occasions, three of which letters contain or incorporate specific proposals involving terms for a possible agreement.” The Executive, by contrast, apparently continued to adhere to its original proposal without modification. Thus, the “equity of the conduct of the declaratory judgment plaintiff” supports the exercise of the Court’s discretion in favor of the Committee. 

(3)  the record is fully developed for purposes of the issues presented by these motions. Significantly, immunity is strictly a legal issue, and it is the judiciary that must “say what the law is” with respect to that matter.  

(4) the parties are most surely sufficiently adverse. 

(5) both sides agree that this case raises issues of enormous “public importance.”  

(6) there is a strong possibility that this sort of dispute could routinely “recur.” Indeed, it already has: on July 10, 2008, former White House advisor Karl Rove asserted absolute immunity in response to a congressional subpoena and on July 30, 2008 the Committee voted to hold him in contempt.