[Congressional Record Volume 146, Number 108 (Thursday, September 14, 2000)]
[Senate]
[Pages S8571-S8574]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FEDERAL LAW ENFORCEMENT PROBLEMS DUE TO THE McDADE LAW
Mr. LEAHY. Mr. President, I came to the floor on May 25 to speak
about the pressing criminal justice problems arising out of the so-
called McDade law, which was enacted at the end of the last Congress as
part of the omnibus appropriations law. At that time, I described some
examples of how this law has impeded important criminal prosecutions,
chilled the use of federally-authorized investigative techniques and
posed multiple hurdles for federal prosecutors. In particular, I drew
attention to the problems that this law has posed in cases related to
public safety--among them, the investigation of the maintenance and
safety practices of Alaska Airlines. The Legal Times and the Los
Angeles Times recently reported on the situation regarding the Alaska
Airlines investigation, and I ask unanimous consent to include these
reports in the Record following my remarks.
Since I spoke in May, the McDade law has continued to stymie Federal
law enforcement efforts in a number of States. I am especially troubled
by
[[Page S8572]]
what is happening in Oregon, where the interplay of the McDade law and
a recent attorney ethics decision by the Oregon Supreme Court is
severely hampering Federal efforts to combat child pornography and drug
trafficking.
I refer to the case of In re Gatti, 330 Or. 517 (2000). In Gatti, the
court held that a private attorney had acted unethically by
intentionally misrepresenting his identity to the employees of a
medical records review company called Comprehensive Medical Review
(``CMR''). The attorney, who represented a client who had filed a claim
with an insurance company, believed that the insurance company was
using CMR to generate fraudulent medical reports that the insurer then
used to deny or limit claims. The attorney called CMR and falsely
represented himself to be a chiropractor seeking employment with the
company. The attorney was hoping to obtain information from CMR that he
could use in a subsequent lawsuit against CMR and the insurance
company.
The Oregon Supreme Court upheld the State Bar's view that the
attorney's conduct violated two Oregon State Bar disciplinary rules and
an Oregon statute--specifically, a disciplinary rule prohibiting
conduct involving dishonesty, fraud, deceit or misrepresentation; a
disciplinary rule prohibiting knowingly making a false statement of law
or fact; and a statute prohibiting willful deceit or misconduct in the
legal profession. In so doing, the court rejected the attorney's
defense that his misrepresentations were justifiable because he was
engaged in an investigation to seek evidence of fraud and other
wrongful conduct. The court expressly ruled that there was no
``prosecutorial exception'' to either the State Bar disciplinary rules
or the Oregon statute. As a result, it would appear that prosecutors in
Oregon may not concur or participate in undercover and other deceptive
law enforcement techniques, even if the law enforcement technique at
issue is lawful under Federal law.
Gatti has had a swift and devastating effect on FBI operations in
Oregon. Soon after the decision was announced, the U.S. Attorney's
Office informed the FBI Field Office that it would not concur or
participate in the use of long-used and highly productive techniques,
such as undercover operations and consensual monitoring of telephone
calls, that could be deemed deceptive by the State Bar. Several
important investigations were immediately terminated or severely
impeded.
Because of the Gatti decision, Oregon's U.S. Attorney refused to
certify the six-month renewal of Portland's Innocent Images undercover
operation, which targets child pornography and exploitation. Portland
sought and obtained permission to establish an Innocent Images
operation after the work of another task force over the past two years
revealed that child pornography and exploitation is a significant
problem in Oregon. With that finally accomplished, and with the
investigative infrastructure in place, the U.S. Attorney refused to
send the necessary concurring letter to the FBI for Portland's six-
month franchise renewal. Since the U.S. Attorney's concurrence is
necessary for renewal of the undercover operation, it now appears that
Portland's Innocent Images operation will be shut down.
Gatti has also had an immediate and harmful impact on Oregon's war on
drugs. Last winter, there was a multi-agency wiretap investigation into
the activities of an Oregon-based drug organization. To date, the
investigation has produced numerous federal and state indictments.
Recently, the post-wiretap phase brought to the surface a cooperating
witness. During the initial briefing, the cooperating witness indicated
he had information about other drug organizations in Oregon and another
State. In an effort to widen the investigation, the FBI sought the
AUSA's concurrence in the cooperator's use of an electronic device to
record conversations with other traffickers. Citing the Gatti decision,
the assigned AUSA refused to provide concurrence. Since AUSA
concurrence is required for such consensual monitoring, the FBI cannot
make use of this basic investigative technique. Thus, a critical phase
of the investigation languishes because of the interplay of Gatti and
the McDade law.
These examples show how the McDade law is severely hampering federal
law enforcement in Oregon. But as I made clear in my prior remarks,
this ill-conceived law is having dangerous effects on federal law
enforcement nationwide. Let me update my colleagues on the Talao case,
which I discussed at some length in May.
In Talao, a company and its principals were under investigation for
failing to pay the prevailing wage on federally funded contracts,
falsifying payroll records, and demanding illegal kickbacks. The
company's bookkeeper, who had been subpoenaed to testify before the
grand jury, initiated a meeting with the AUSA in which she asserted
that her employers were pressing her to lie before the grand jury, and
that she did not want the company's lawyer to be present before or
during her grand jury testimony. The grand jury later indicted the
employers for conspiracy, false statements, and illegal kickbacks.
The district court held that the AUSA had acted unethically because
the company had a right to have its attorney present during any
interview of any employee, regardless of the employee's wishes, the
status of the corporate managers, or the possibility that the attorney
may have a conflict of interest in representing the bookkeeper. The
court declared that if the case went to trial, it would inform the jury
of the AUSA's misconduct and instruct them to take it into account in
assessing the bookkeeper's credibility.
When I last spoke about the Talao case, the Ninth Circuit was
reviewing the district court's decision. The Ninth Circuit has now
spoken, and although it found no ethical violation, it did so on the
narrow ground that the bookkeeper had initiated the meeting, and that
the AUSA had advised the bookkeeper of her right to contact substitute
counsel. Thus, the court sent a message that AUSAs and investigating
agents may not approach employees in situations where there is a
possible conflict of interest between the employee and the corporation
for whom the employee works, and corporate counsel is purporting to
represent all employees and demanding to be present during interviews.
Let me put that another way. If a corporate whistleblower in California
told an FBI agent that the agent should speak to a particular employee
who had important information, and the AUSA assigned to the case knew
that the corporation was represented by counsel in that matter, the
AUSA arguably would have to nix the interview.
The need to modify the McDade law is real, and our time is running
out. I introduced legislation last year that addressed the most serious
problems caused by the McDade law, and I worked with the Chairman of
the Judiciary Committee to refine and improve it. I described our
approach when I spoke on this issue in May. Congress should take up and
pass corrective legislation before the end of the session.
I ask unanimous consent to have several articles printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Los Angeles Times, Tues., July 18, 2000]
Justice Dept. Faces Unexpected Roadblocks Due to Ethics Rules
(By Robert L. Jackson)
Washington.--Consider it further proof of the law of
unintended consequences.
Aiming to prevent unethical conduct, Congress last year
passed a law requiring federal prosecutors to abide by the
ethics rules of the state bar where they are conducting
investigations.
Instead, the Justice Department says, the move has hampered
law enforcement in cases related to public safety--among them
the investigation of the maintenance and safety practices of
Alaska Airlines.
In documents submitted to the Senate Judiciary Committee by
James Robinson, chief of Justice's criminal division, and
Assistant Atty. Gen. Robert Raben, the department has argued
that probes like this were ``stalled for many months'' by the
McDade law.
The law blocked FBI agents and Justice Department lawyers
from interviewing airline mechanics in a timely fashion for a
grand jury investigation of whether Alaska's maintenance
records were falsified in Northern California, the department
says. And it reportedly is causing problems for prosecutors
looking into complaints from corporate whistle-blowers
elsewhere.
While the law seems harmless on its face, California--like
many other states--has an ethics provision prohibiting
lawyers or government investigators from directly contacting
a person who is represented by counsel.
[[Page S8573]]
Federal officials say FBI agents who tried to interview
workers at the airline's Oakland maintenance facility were
blocked by company lawyers who claimed to represent all
airline personnel.
When mechanics then were served with grand jury subpoenas,
attorneys lined up by the airline were able to delay their
appearances by insisting on grants of immunity from
prosecution, which slowed the inquiry by months.
The federal investigation widened after the Jan. 31 crash
of an Alaska Airlines jet in the Pacific Ocean that killed
all 88 people on board. But FBI agents were similarly impeded
from questioning ground mechanics, according to the Justice
Department.
``Those interviews that are most often successful--
simultaneous interviews of numerous employees--could not
be conducted simply because of fear that an ethical rule .
. . might result in proceedings against the prosecutor,''
said Sen. Patrick J. Leahy (D-Vt.), a Judiciary Committee
member who is trying to amend the law.
Alaska Airlines insists it has cooperated with the FBI and
denies wrongdoing in its maintenance practices. No criminal
charges have been brought. The Federal Aviation
Administration recently said it had uncovered ``serious
breakdowns in record-keeping, documentation and quality
assurance'' but that the airline has devised an acceptable
plan to correct them.
Leahy said the airline case is only one example of the
hurdles erected by the McDade law, which was sponsored by
Rep. John M. McDade (R-Pa.), who retired from the House last
year. McDade had been the target of an eight-year federal
investigation into allegations that he accepted $100,000 in
gifts and other items from defense contractors and lobbyists.
Cleared by a jury after a 1996 trial, McDade maintained he
was the victim of an investigation run amok.
His sponsorship of the Citizens Protection Act was
supported by both the American Bar Assn. and the National
Assn. of Criminal Defense Lawyers.
It was approved by Congress without any hearings.
Leahy, in a bipartisan effort with Sen. Orrin G. Hatch (R-
Utah), the committee chairman, is trying to amend the McDade
law.
Justice officials say the statute has made them ``reluctant
to authorize consensual monitoring''--a body mike worn by an
informant, for example--in California and other states for
fear that state ethics rules could be interpreted to prohibit
this conduct and lead to disciplinary action against
department prosecutors.
The law also is making officials reluctant to speak with
corporate whistle-blowers without a company lawyer present.
Hatch would add a provisio to McDade saying federal
prosecutors should follow state standards unless they are
inconsistent with traditional federal policy, a qualification
that would effectively gut the law. It is doubtful whether
Congress will amend McDade this year.
____
[From the Legal Times, June 26, 2000]
Ethics Law Hurts Probe, DOJ Says
(By Jim Oliphant)
The Justice Department says its criminal probe of safety
problems at Alaska Airlines has been severely hampered by a
controversial federal ethics law enacted last year.
In documents provided to a Senate committee, the department
says that a measure that forces federal prosecutors to adhere
to state ethics rules has stymied the long-running
investigation into the airline's safety and maintenance
practices.
Seattle-based Alaska Airlines has been the target of a
federal grand jury in San Francisco since early 1999, when a
mechanic claimed that workers at the airline had falsified
repair records for Alaska passenger jets.
Earlier this year, after Alaska Airlines Flight 261 plunged
into the Pacific Ocean, killing all aboard, the Justice
Department, along with the Federal Aviation Administration,
widened its inquiry into the company's safety operations.
Department officials, as well as lawyers in the U.S.
attorney's office in San Francisco, declined to discuss the
grand jury's investigation, which has yet to produce a single
indictment.
But in a report prepared for the Senate Judiciary
Committee, the DOJ says the grand jury's work was ``stalled
for many months'' because of the so-called McDade Amendment,
a law implemented last year that forces federal prosecutors
to follow state ethics codes.
California, like most states, has an ethics provision that
prohibits lawyers from directly contacting a party who is
represented by counsel. The Justice Department claims that
lawyers for Alaska Airlines used the rule to prevent the
Federal Bureau of Investigation and other investigators from
speaking with mechanics and other airline employees.
In the early stages of the Alaska investigation, the
department's report says, attempts by the FBI to seize
documents and interview workers at Alaska Airlines' hangar
facility in Oakland, Calif., were blocked by lawyers for the
company who ``interceded, claimed to represent all airline
personnel, and halted the interviews.''
Because of the California ethics law, the report says, the
federal prosecutor was forced to end the interviews and
recall the agents.
The report explains that prosecutors then attempted to
subpoena the workers to the grand jury. Again, the request
was met with a response by company lawyers, who lined up
attorneys separate from the company to represent each worker
before they testified before the grand jury.
``Because the attorney for each witness insisted on a grant
of immunity, and because of scheduling conflicts with the
various attorneys, the investigation was stalled for many
months,'' the report says. ``When the witnesses finally
appeared before the grand jury, they had trouble remembering
anything significant to the investigation.''
The Justice Department report also mentions the Jan. 31
crash of Alaska Airlines Flight 261, which crashed into the
Pacific Ocean, killing 88 people aboard. The National
Transportation Safety Board's investigation has focused on
defects in the plane's jackscrew assembly and
horizontal stabilizer, which controls the up-and-down
movement of the aircraft.
In the wake of the crash, the report says, the FBI received
information that the plane had experienced mechanical
problems on the first leg of its flight from Puerto Vallarta,
Mexico, to Seattle.
But agents could not interview the airline's employees
after the crash because of the ethics law, the report says.
``Those interviews that are most often successful--
simultaneous interviews of numerous employees--could not be
conducted because of fear that they might result in ethics
proceedings against the prosecutor,'' the report says.
Alaska Airlines maintains that it has fully cooperated with
FBI and FAA investigators during the government's
investigation. It has denied any wrongdoing at its Oakland
facility. The company has retained Los Angeles' O'Melveny &
Myers to represent it in the criminal investigation.
Change of Policy
For years, as a matter of Justice Department policy,
federal prosecutors were told that they didn't have to follow
state ethics rules--particularly ones related to bypassing
lawyers and contacting potential witnesses directly.
The policy was intended to aid prosecutions of organized
crime in the 1980s and was first detailed in a memo by then-
Attorney General Richard Thornburgh in 1989. The department's
rule was clarified under Janet Reno in 1994.
In October 1998, Congress passed a law that made federal
prosecutors subject to state ethics codes. The law was named
for former Rep. Joseph McDade (R-Pa.), who was the subject of
an eight-year federal bribery investigation. McDade was
eventually acquitted.
The law went into effect last year, over strenuous Justice
Department objections. Since then, the department hasn't
given up the fight to overturn it. And its efforts have
support in the Senate Judiciary Committee, where bills
offered by the committee's chairman, Sen. Orrin Hatch (R-
Utah), and Sen. Patrick Leahy (D-Vt.) would establish
separate ethical proscriptions for prosecutors.
The Hatch bill would repeal McDade. The Leahy bill would
specifically allow prosecutors to contact witnesses
regardless of whether they were represented by counsel.
Neither bill has made it out of the judiciary committee.
``This law has resulted in significant delays in important
criminal prosecutions, chilled the use of federally
authorized investigative techniques and posed multiple
hurdles for federal prosecutors,'' Leahy said on the floor of
the Senate last month.
Both the American Bar Association and the National
Association for Criminal Defense Lawyers lobbied Congress
hard for the McDade law. Kevin Driscoll, a senior legislative
counsel for the ABA, said that his organization is reviewing
the Justice Department's complaints about the law's
implementation. But, he added, the ABA's support of McDade
has not changed.
William Moffitt, a D.C. criminal defense lawyer who is
president of the NACDL, says that the Justice Department is
``looking for reasons to complain'' about McDade.
``They don't have the unfettered ability to intimidate and
they don't like that,'' Moffitt said. ``People ought to be
able to go to the general counsel (of a corporation) if they
are subpoenaed and they ought to be able to be told to get a
lawyer.''
Few details of the grand jury's investigation of Alaska
Airlines have come to light. The airline says that it has
received three subpoenas for information related to 12
specific aircraft. In a filing with the Securities and
Exchange Commission last month, the airline's parent company,
Alaska Air Group Inc., said one subpoena asked for the repair
records for the MD-83 craft that crashed in January.
Matt Jacobs, a spokesman for the U.S. attorney's office in
San Francisco, declined comment on the status of the
investigation, as did the press office for Justice Department
in Washington.
The FAA conducted a separate probe of the Alaska Airline's
maintenance procedures and proposed a $44,000 fine, which the
airline is contesting. The agency recently threatened to shut
down the airline's repair facilities in Oakland and Seattle
if it did not provide a sound plan for improving its safety
protocols.
[[Page S8574]]
____________________