Sarbox Used to Deputize Attorneys?

Sunday, March 04, 2007

In the Houston Chronicle is a rather disturbing article about a novel use of a provision of the Sarbanes-Oxley Act that threatens to deputize American lawyers as government snitches in a manner that makes intentional efforts to do the same to physicians seem tame by comparison.

The arrest of a prominent attorney on charges of destroying evidence in a child pornography investigation is raising alarm bells that a law targeting corporate accounting schemes could be used to prosecute lawyers over work done on their clients' behalf.

"Every criminal defense lawyer in the country has to be alarmed at the indictment," said New York University law professor Stephen Gillers. "It's going to upset a lot of assumptions about how lawyers can represent clients. I think this is a boundary-pushing case."

Philip Russell was charged Feb. 16 with destroying a computer that contained child pornography at Christ Church in Greenwich. ...

Russell, the former attorney for the church, is accused of obstructing an FBI investigation that led to the January conviction of the church's music director, Robert Tate, for possessing child pornography.

Russell was charged under the Sarbanes-Oxley Act, which Congress passed in 2002 after a wave of corporate accounting scandals to make it easier to prosecute such cases. He faces up to 40 years in prison if convicted.

"The case will test the meaning of those new provisions," Gillers said.

The law, which was aimed at cases involving corporate document shredding, made it easier to prosecute obstruction of justice by requiring only that an investigation was foreseeable rather than already pending. Prosecutors also no longer have to show the defendant acted with corrupt intent to keep evidence from investigators, experts say. [bold added]
Norm Pattis, who blogs on police and legal issues at The Cool Justice Report adds:
Philip Russell of Greenwich has been charged with violating 18 U.S.C. Section 1519. That provision makes it a crime to tamper with potential evidence in "contemplation" of a federal investigation. Unlike pre-Sarbanes-Oxley tampering statutes, there need not be an investigation in place or even imminent as a predicate for prosecution. The statute appears to criminalize what was once considered prudence by defense counsel. The mens rea for such crimes is now virtually limitless.

According to sources close to the case, Russell is alleged to have been consulted by a … Church whose music director was being investigated for looking at child pornography on a church computer. He advised the client to fire the employee and to destroy the computer. Apparently, Russell himself destroyed the device. Shortly thereafter, the feds came looking for the computer.

Section 1519 makes it far easier to charge someone with obstruction. Previously, a defendant need almost always have some knowledge of an actual proceeding, and the things destroyed must have some nexus or connection to the proceeding. Section 1519 relaxes those requirements. An open question is whether the section now deputizes all of us as junior G-men, mandated to preserve incriminating evidence. [bold, italics, and link mine]
Although the Chronicle story, another news report, and Pattis all indicate that the investigation of Tate had already begun when Russell destroyed his laptop, the fact that they all also fail to state explicitly whether Russell knew about this implies that either Russell destroyed the computer without knowledge that a federal investigation was in progress or that he considered his actions legal because he thought the normal requirements for treating the computer as evidence for such an investigation had not been met. In any event, the fact remains that the letter of the law in Sarbox makes such considerations moot, and that the federal government intends to take advantage of this fact.

Those familiar with Ayn Rand's essay, "America's Persecuted Minority: Big Business" (found in Capitalism: The Unknown Ideal), will find the following passage from the Chronicle story chillingly familiar:
"Lawyers will have to be soothsayers," said Martin Pinales, president of the National Association of Criminal Defense Lawyers. "They will have to figure out what some prosecutor in the future may or may not be charging." [bold added]
As with businessmen, who already had to function in this way long before Sarbox, now lawyers have to practice under the uncertainty of non-objective law. Commenting on A. D. Neale's analysis of antitrust law in The Antitrust Laws of the U.S.A., Rand puts the similar plight of the businessman this way:
This means that a businessman has no way of knowing in advance whether the action he takes is legal or illegal, whether he is guilty or innocent. It means that a businessman has to live under the threat of a sudden, unpredictable disaster, taking the risk of losing everything he owns or being sentenced to jail, with his career, his reputation, his property, his fortune, the achievement of his whole lifetime left at the mercy of any ambitious young bureaucrat who, for any reason, public or private, may choose to start proceedings against him.
Substitute "attorney" for "businessman" and "prosecutor" for "bureaucrat" and this gets quite close to the current situation, as far as I can tell.

It is tempting, given the fact that so much business law amounts to "perpetual employment legislation" for lawyers, to shrug at this and say to the legal profession, "welcome to the world you helped create". And the feds have made it hard to side with Russell here: Wisely -- for such an otherwise brazen attempt to seize greater power for the government -- the feds have chosen a case for which public sentiment will strongly favor the prosecution.

But the fact remains that we are seeing in this case an attempt to use the federal persecution of businessmen -- which is bad enough -- as an excuse to force another profession to act as government spies on ordinary citizens, while in the meantime raising the specter of an entirely different segment of the population than originally targeted not knowing whether they might be tried at some point in the future for the ordinary conduct of their jobs!

This attempted expansion of government intrusion into the daily lives of ordinary citizens is not a reason to amend Sarbanes Oxley, which should never have been passed in the first place. It is yet another reason to repeal it, and all other legislation like it. For as we should have learned in World War II, government power expanded at the expense of one class of citizens violates the principle that it should protect all individuals, leaving everyone open to abuse later on if it is accepted. The words of the Reverend Niermoeller, although usually invoked in the memory of the atrocities of National Socialism in World War II Germany, apply equally well here.
First they came for the Communists, but I was not a Communist, so I didn't speak up. Then they came for the trade unionists, but I was not a trade unionist, so I didn't speak up. Then they came for the Jews, but I was not a Jew, so I didn't speak up. Then they came for me and there was no one left to speak for me.
I am not impressed with the actions of Philip Russell, but they should not be used as an excuse for the government -- in America! -- to conscript criminal informants.

-- CAV


Today: Corrected two typos.


Anonymous said...

Doesn't this sort of law violate attorney-client privilege?

Resident Egoist said...

"It is tempting, given the fact that so much business law amounts to "perpetual employment legislation" for lawyers, to shrug at this and say to the legal profession, "welcome to the world you helped create"."

You just had to stop me, didn't you? Up to that point, that was exactly the thought in my mind: Mr. Lawyer ... welcome to YOUR world!

Unfortunately(?), as you mentioned, adding more victims to SARBOX's plate isn't any way to be construtive -- ultimately, no one benefits from non-objective law.

This also happens to be a great illustration of why one should always act on principle: there is no one as "pragmatic" as today's lawyers.

How I just LOVE unintended consequences! ... and there goes that thought again...

Gus Van Horn said...


Based on major item 3 of the checklist here, I would say not. However, it would seriously affect the attorney-client relationship.


And then, of course, there are the good attorneys out there, too.

But for them and the principle in volved, though, we're on the same page there.


Resident Egoist said...

Hey Gus, speaking of good attorneys, whatever happened to The General?

Gus Van Horn said...

Sucked into the abyss of law school, as far as I can tell.

I haven't heard from him in awhile, but he does come up for air from time to time. Not long ago, I saw a comment by him at Jennifer Snow's blog, if I recall correctly.

If he's around, perhaps this will draw him out. Otherwise, I do owe him an email, come to think of it.