[Congressional Record (Bound Edition), Volume 146 (2000), Part 7]
[Senate]
[Pages 9344-9347]
[From the U.S. Government Publishing Office, www.gpo.gov]



   CONTINUING PROBLEMS FOR FEDERAL LAW ENFORCEMENT DUE TO McDADE LAW

  Mr. LEAHY. Mr. President, I rise to talk about a pressing criminal 
justice problem. The problem stems from a provision slipped into the 
omnibus appropriations law during the last Congress, without the 
benefit of any hearings or debate by the Senate. Although some of us 
from both sides of the aisle objected to the provision at the time, our 
objections were ignored and the provision became law. It is having 
devastating effects on federal criminal prosecutions and, as I describe 
in some detail below, it is no exaggeration to say that this provision 
is costing lives.
  In the last Congress, the omnibus appropriations measure for FY 1999 
included a provision originally sponsored by former Representative 
Joseph McDade that was opposed by most members of the Senate Judiciary 
Committee, both Democrats and Republicans. Indeed, we sent a joint 
letter to the leadership of the Appropriations Committee urging that 
this provision be removed from any conference report

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because, in our view, the McDade law ``would seriously impair the 
effectiveness of federal prosecutors in their efforts to enforce 
federal criminal laws and protect our communities.''
  Nevertheless, the McDade provision was enacted as part of that 
appropriations measure and went into effect on April 19, 1999. This 
law, now codified at 28 U.S.C. Sec. 530B, subjects federal prosecutors 
to the state bar rules, and discipline, of ``each State where such 
attorney engages in that attorney's duties.'' There has been enormous 
tension over what ethical standards apply to federal prosecutors and 
who has the authority to set those standards.
  This debate over the ethical rules that apply to federal prosecutors 
was resolved with the McDade law at a time of heightened public concern 
over the high-profile investigations and prosecutions conducted by 
independent counsels. Special prosecutors Kenneth Starr and Donald 
Smaltz were the ``Poster boys'' for unaccountable federal prosecutors. 
By law, those special prosecutors were subject to the ethical 
guidelines and policies of the Department of Justice. They defended 
their controversial tactics by claiming to have conducted their 
investigations and prosecutions in conformity with Departmental 
policies.
  The actions of these special prosecutors provided all the necessary 
fodder to fuel passage of the McDade law. For example, one of the core 
complaints the Department had against the McDade law is that federal 
prosecutors would be subject to restrictive state ethics rules 
regarding contacts with represented persons. A letter to the Washington 
Post from the former Chairman of the ABA ethics committee pointed out:

       [Anti-contact rules are] designed to protect individuals 
     like Monica Lewinsky, who have hired counsel and are entitled 
     to have all contacts with law enforcement officials go 
     through their counsel. As Ms. Lewinsky learned, dealing 
     directly with law enforcement officials can be intimidating 
     and scary, despite the fact that those inquisitors later 
     claimed it was okay for her to leave at any time.

  I have outlined before my concerns about the tactics of these special 
prosecutors, such as requiring a mother to testify about her daughter's 
intimate relationships, requiring a bookstore to disclose all the books 
a person may have purchased, and breaching the longstanding 
understanding of the relationship of trust between the Secret Service 
and those it protects. I was appalled to hear a federal prosecutor 
excuse a flimsy prosecution by announcing after the defendant's 
acquittal that just getting the indictment was a great deterrent. 
Trophy watches and television talk show puffery should not be the 
trappings of prosecutors.
  Yet, I opposed the McDade law and continue to believe that this law 
is not the answer. I firmly support improvements in the disciplinary 
process for federal prosecutors but this important task may be 
accomplished without hindering legitimate law enforcement investigative 
techniques and practices--which is what the McDade law is doing. While 
subjecting federal attorneys to state bar rules sounds like good policy 
at first blush, the McDade law has ceded to the vagaries of fifty state 
bar associations control of how federal prosecutions are to be 
conducted. I am concerned that Federal prosecutors are being hamstrung 
because the McDade law makes them answerable to multiple masters.
  The Department of Justice has been surprisingly quiet, both before 
and after the McDade law went into effect, about seeking a legislative 
modification to address the most devastating consequences of this new 
law for federal law enforcement. Unfortunately, we are fast approaching 
the end of this Congress without making any progress on addressing the 
problems created by the McDade law.
  I have asked the Department of Justice for an update on how the 
McDade law is working, and whether any of my fears were warranted. The 
results are in: 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.
  The Justice Department's November, 1999, response to my prior 
questions on this issue stated that the McDade law ``has caused 
tremendous uncertainty,'' ``delayed investigations,'' ``creat[ed] a 
rift between agents and prosecutors,'' ``prevented attorneys and agents 
from taking legitimate, traditionally accepted investigative steps, to 
the detriment of pending cases,'' and served as the basis of litigation 
``to interfere with legitimate federal prosecutions.'' Yet, these 
generalities do not fully demonstrate the significant adverse impact 
this law is continuing to have to slow down or bring to a standstill 
federal investigations of serious criminal wrongdoing. Let me describe 
some recent examples.


                         airline whistle blower

  In one recent case, an airline mechanic whistleblower claimed that 
his airline was falsely claiming to the FAA that required maintenance 
procedures had been performed on the airline's planes when in fact they 
had not been done. The FBI executed a search warrant for documents at 
the maintenance facility and began simultaneous interviews of the 
maintenance personnel to determine the validity of the allegations. The 
airline's attorney immediately interceded, claimed to represent all 
airline personnel, and halted the interviews. Because of the McDade 
law, the prosecutor was forced to tell the agents that they could not 
continue to interview the employees.
  Rather than having several agents out interviewing witnesses 
simultaneously to avoid culpable witnesses from trying to get their 
stories ``straight,'' the prosecutor then had to resort to an 
alternative strategy to obtain information from the employees. The 
prosecutor subpoenaed the witnesses to the grand jury. Unfortunately, 
the risk of this strategy is that it may play right into the hands of 
those who are willing to cover up. With the grand jury route, one 
witness at a time testifies and is then debriefed immediately after by 
an attorney, who in turn briefs all future witnesses about what 
questions will be asked and what answers have already been given.
  Indeed, the attorney for the airline again claimed to represent 
everyone who was subpoenaed to testify before the grand jury. The 
office advised the attorney that he had a conflict doing so, and the 
attorney then obtained a separate attorney for each witness.
  The impact on this investigation was severe. 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. When the witnesses finally appeared before the grand jury, 
they had trouble remembering significant information to the 
investigation.
  After about a year of investigation, one of the airline's planes 
crashed, with calamitous loss of life.
  Immediately after the crash, the FBI received information that the 
plane had problems on the first leg of its trip. The agents could not 
go out and interview the airline's employees because of questions 
raised by the McDade law. Does the corporation have a right to be 
notified before interviews and to have its counsel present? Are these 
people represented by the corporate attorney? Thus, those interviews 
that are most often successful--simultaneous interviews of numerous 
employees--could not be conducted simply because of fear that an 
ethical rule--not the law--might result in proceedings against the 
prosecutor.


                       child-murder investigation

  A 12-year-old girl was abducted while riding her bicycle near her 
family home in a Midwestern city in 1989. An exhaustive investigation 
led by the FBI turned up nothing. In 1996, an apparent eyewitness 
confessed on his deathbed to the abduction and stated that he had been 
told by an accomplice that an individual known as ``T,'' who was then 
in the custody of the state Department of Corrections, had buried the 
little girl's body in a deep freeze on T's property near a small mid-
western city. T admitted to former inmates, to prison nurses and to his 
grandmother that he was involved in the case. When interviewed by the 
police, he on one occasion denied any involvement, but later admitted 
being present when the young girl was killed.

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  A Federal prosecutor and two FBI agents attempted to meet with T at 
the county jail. The prosecutor explained that the purpose of the 
meeting was to obtain T's cooperation; T stated that he wanted to speak 
to his attorney, and was allowed to speak with his federal public 
defender from a prior closed case. The federal public defender informed 
T that he did not represent him, but T then spoke in confidence to the 
federal defender, who informed the prosecutor that T had no information 
and did not wish to continue the conversion.
  Agents have located an individual who believes that T would confide 
in him and that he would be willing to assist in attempting to find out 
from T what had happened to the girl's body. This individual has agreed 
to a consensually monitored meeting with T.
  Because of T's prior representation by the state and federal public 
defenders, the U.S. Attorney's office contacted the state bar 
disciplinary counsel concerning whether it could conduct the consensual 
monitoring. A staff attorney in the bar disciplinary office stated that 
T was a represented person and that the prosecutors could not make the 
contact until the public defenders informed T that they no longer 
represented him and the U.S. Attorney's Office gave T adequate 
opportunity to retain other counsel.
  This advice was given by the State Bar Disciplinary Counsel despite 
the relevant U.S. Supreme Court and federal appellate case law to the 
contrary. See Griffith v. Kentucky, 479 U.S. 314, 321 n. 6. (1987) (a 
conviction becomes final when ``a judgment of conviction has been 
rendered, the availability of appeal exhausted, and the time for a 
petition for certiorari elapsed or a petition for certiorari finally 
denied''); United States v. Fitterer, 710 F.2d 1328 (8th Cir. 1983); 
United States v. Dobbs, 711 F.2d 84 (8th Cir. 1983) (contact with 
represented persons permitted in the course of pre-indictment criminal 
investigations).
  The Chief Disciplinary Counsel for the State Bar made it clear that 
he was not bound by judicial determinations, including federal court 
decisions, other than those made by the State Supreme Court in which he 
was located. The investigation is currently at a standstill. The 
prosecutor is considering giving T immunity for his testimony, as a 
last resort.


                               Oil spill

  After leaving the port of a major city, a ship on its way to a 
foreign country dumped thousands of gallons of fuel oil into the United 
States coastal waters near the major city. The spill killed wildlife 
and caused millions of dollars of damage to the coast. The Coast Guard 
pursued the ship and boarded it in international waters. While the 
Coast Guard was boarding the ship, the lawyers for the ship's owners 
were on the telephone to the ship's captain and to the Coast Guard. 
They claimed to represent all crew members and prohibited further 
interviews. The attorneys also told the Captain to direct the crew not 
to speak to the Coast Guard.
  Because of the state ethical rules and the claim that those rules not 
only prevent AUSA's, but also federal investigative agents from 
speaking to corporate employees, the prosecutors directed the Coast 
Guard not to seek further interviews. The ship's crew as then spirited 
out of the foreign country and were not ever available to testify 
before the grand jury. No eyewitness to the spill ever materialized.


                     clean water act investigation

  A United States Attorney's office is conducting an ongoing grand jury 
investigation into allegations that a large corporation violated the 
Clean Water Act. Certain former employees of this corporation have 
indicated that they have relevant information and are willing to speak 
with federal investigators about that information. Nothwithstanding 
their desire to speak to federal investigators, a state case has 
interpreted the relevant state's ethics rule as prohibiting contact 
with former as well as current employees of a represented corporation. 
A federal case has interpreted the same state's ethics rule as 
permitting contact with former employees.
  The state's disciplinary counsel has conveyed his view that only 
state court decisions construing that state's ethics rule are 
controlling and that federal case law cannot be relied upon to govern 
proceedings that are brought solely in federal court.
  As a consequence, federal prosecutors may be stymied by a State 
ethical rule and State court interpretation of that rule from gathering 
material evidence of a federal crime from willing witnesses.


                      kickbacks and contract fraud

  In United States v. Talao, 1998 WL 1114043 (N.D. Cal.), vacated in 
part by 1998 WL 1114044 (N.D. Cal.), a company's bookkeeper was 
subpoenaed to testify before the grand jury. Her employers were the 
subjects of the criminal investigation because they were believed to 
have failed to pay the prevailing wage on federally funded contracts, 
falsified payroll records, and demanded illegal kickbacks. The 
bookkeeper came to the U.S. Attorney's Office the day before the 
scheduled grand jury appearance and asked to speak to the prosecutor, 
but the prosecutor was not in.
  The next day, when the bookkeeper arrived for her grand jury 
appearance, she encountered the prosecutor in the hall outside the 
grand jury room. The bookkeeper agreed to meet with the prosecutor and 
the case agent, and in a ten minute conversation in a nearby witness 
room, the bookkeeper told the prosecutor that her employers (the 
subjects of the investigation) had pressed her to lie before the grand 
jury, she was afraid of them, and she did not want the company's lawyer 
to be in the same room as her or know what she had said in the grand 
jury, for fear that the attorney would report everything back to the 
employer.
  During this interview, the corporate attorney banged on the witness 
room door and demanded to be present during the interview; he also 
asserted the right to be present in the grand jury. The prosecutor 
asked the bookkeeper whether she wished to speak to the attorney. She 
said that she did not. The grand jury later indicted the employers for 
conspiracy, false statements, and illegal kickbacks.
  The district judge first ruled that the prosecutor violated the 
contacts with represented persons rule because there was a pre-existing 
Department of Labor administrative proceeding and qui tam action (the 
government had not intervened) and, therefore, the corporation 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 judge referred 
the AUSA for disciplinary review by the State of California.
  Upon rehearing, the judge held that, though the ethical rule 
violation was intentional, he would withdraw the referral to the state 
bar. He held that he would instruct the jury to consider the 
prosecutor's ethical violation in assessing the credibility of the 
bookkeeper. The government sought a writ of mandamus and that was 
argued before the Ninth Circuit Court of Appeals on March 15, 2000. The 
prosecutor has also sought to appeal the district court's misconduct 
finding.


                        monitored conversations

  A common tool of law enforcement authorities who are investigating 
allegations of criminal and civil violations is to have either a law 
enforcement agent or a confidential informant (under the direction of a 
law enforcement agent) act in an undercover capacity. Often, during the 
course of these undercover investigations, undercover agents and 
confidential informants engage in a monitored conversation with 
individuals suspected of illegal conduct. When engaging in such 
monitored conversations, the law enforcement agent or confidential 
informant working for the government hides his true identity.
  ABA Model Rule 8.4(c) provides that it is misconduct for a lawyer to 
engage in conduct involving dishonesty, fraud, deceit or 
misrepresentation. In one jurisdiction--Oregon--bar disciplinary 
counsel has interpreted the relevant version of this rule to prohibit 
attorneys not only from authorizing or conducting such consensual 
recordings but

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also from supervising or overseeing undercover investigations 
themselves, since the very nature of the undercover operation conduct 
involves deception. Thus, in Oregon, government attorneys may risk 
violating the ethics rules when they supervise legitimate criminal and 
civil law enforcement investigations that use investigative methods 
recognized by courts as lawful.


                       grand jury investigations

  In a series of existing grand jury investigations, an attorney for a 
corporation under investigation prevented interviews of corporate 
employees by federal agents because of the rule governing contacts with 
represented persons. The following examples took place after the McDade 
law was passed.
  a. In John Doe Corp. #1, as federal agents began to execute a search 
warrant at a company, the attorney for the corporation announced over 
the loudspeaker that he represented all of the employees and that no 
interviews could take place.
  b. In John Doe Corp. #2, agents of the U.S. Customs Service executed 
a search warrant at a computer component manufacturer in a major U.S. 
city. While executing the warrant at Company A, a lawyer called the 
prosecutor and claimed to represent all employees at Company A and its 
subsidiaries. During the search the manager of Company B, a subsidiary 
of Company A, approached the agents and asked to cooperate, offering to 
tape conversations with those managers above him who had committed 
crimes. Because Company B was controlled by Company A, the prosecutor 
directed the agents not to conduct any undercover meetings or interview 
the potential witness.
  Virtually every investigation involving a corporation is now subject 
to interference where none existed before.


                         whistle blower actions

  Increasingly, the government uses its civil enforcement powers under 
federal statutes to crack down on corporations that engage in health 
care fraud, defense contractor fraud, and other frauds that cost the 
government--and the taxpayers--substantial sums of money. One method of 
pursuing such fraud claims is through qui tam suits, which often are 
initiated by corporate employees seeking to ``blow the whistle'' on 
offending companies.
  Many states' ethics rules forbid government attorneys from obtaining 
relevant information from concerned whistle blowers and corporate 
``good citizens'' without the consent of the counsel that represents 
the corporation whose conduct is under investigation. This prohibition, 
which affects criminal investigations as well, presents a particularly 
acute problem in civil enforcement investigations. Unlike criminal 
investigations, which sometimes can be conducted in the first instance 
by law enforcement officers, without the involvement of government 
attorneys (and the restrictions that attorneys' involvement brings), 
civil enforcement actions often are investigated directly by the 
government attorneys themselves, as the resources of federal law 
enforcement authorities typically are not available for civil 
enforcement matters.


                     we need to fix the mcdade law

  Due to my serious concerns about the adverse effects of the McDade 
law on federal law enforcement efforts, I introduced S. 855, the 
Professional Standards for Government Attorneys Act, on April 21, 1999. 
The Justice Department states that ``S. 855 is a good approach that 
addresses the two most significant problems caused by the McDade 
Amendment--confusion about what rule applies and the issue of contacts 
with represented parties.'' (Justice Department Response, dated 
November 17, 1999, to Written Questions of Senator Leahy).
  Since that time, I have conferred with the Chairman of the Judiciary 
Committee about crafting an alternative to the McDade law. This 
alternative would adhere to a basic concern of proponents of the McDade 
provision: the Department of Justice would not have the authority it 
has long claimed to write its own ethics rules. The legislation would 
establish that the Department may not unilaterally exempt federal trial 
lawyers from the rules of ethics adopted by the federal courts. 
Federal--not state--courts are the more appropriate body to establish 
rules of professional responsibility for federal prosecutors, not only 
because federal courts have traditional authority to establish such 
rules for federal practitioners generally, but because the Department 
lacks the requisite objectivity.
  The measure would reflect the traditional understanding that when 
lawyers handle cases before a federal court, they should be subject to 
the federal court's rules of professional responsibility, and not to 
the possibly inconsistent rules of other jurisdictions. But 
incorporating this ordinary choice-of-law principle, the measure would 
preserve the federal courts' traditional authority to oversee the 
professional conduct of federal trial lawyers, including federal 
prosecutors. It thus would avoid the uncertainties presented by the 
McDade provision, which subjects federal prosecutors to state laws, 
rules of criminal procedure, and judicial decisions that differ from 
existing federal law.
  The measure would also address the most pressing contemporary 
question of government attorney ethics--namely, the question of which 
rule should govern government attorneys' communications with 
represented persons. It asks the Judicial Conference of the United 
States to submit to the Supreme Court a proposed uniform national rule 
to govern this area of professional conduct, and to study the need for 
additional national rules to govern other areas in which the 
proliferation of local rules may interfere with effective federal law 
enforcement. The Rules Enabling Act process is the ideal one for 
developing such rules, both because the federal judiciary traditionally 
is responsible for overseeing the conduct of lawyers in federal court 
proceedings, and because this process would best provide the Supreme 
Court an opportunity fully to consider and objectively to weigh all 
relevant considerations.
  The problems posed to federal law enforcement investigations and 
prosecutions by the current McDade law are real with real consequences 
for the health and safety of Americans. I urge the Chairmen of the 
House and Senate Judiciary Committees, and my other colleagues, to work 
with me to resolve those problems in a constructive and fair manner.

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