corpcounsel.com | September 18, 2017

Obstruction of Justice

Brandon Fox and Daniel Welsh

Imagine this scenario: The general counsel of a corporation learns that the Department of Justice has set new priorities emphasizing investigations of a specific type of corporate misconduct. Based on internal reports, she suspects that her company is or may become a target of an investigation. She immediately directs the com- pany’s information technology staff to delete email communications and a shared electronic folder that contains of this misconduct. All of these electronic files are due for deletion pursuant to the company’s document retention policy. The general coun- sel also warns employees not to speak with federal investigators about any misconduct. What, if any, of the general counsel’s conduct amounts to obstruction of jus- tice? The question is that of intent, and the answer may depend on the statute used by and the federal cir- cuit where the act occurred. defendant must have “some conscious- has applied the “wrongful, immoral, Defining “Corrupt” Intent ness of wrongdoing.” depraved, or evil” standard from Arthur Some circuits have hewn closely to Andersen in Section 1512(b) cases, the Although federal obstruction statutes Arthur Andersen’s language, and not just court does not require this instruction require a defendant to have a “corrupt” with other obstruction provisions. In intent, Congress has not defined the for Section 1512(b). For example, the Seventh Circuit pattern jury instructions United States v. Watters, the court rea- term in two statutes prosecutors fre- soned that because Section 1512(c) is quently use: 18 U.S.C. §§ 1503 and 1512. for both Section 1503 and 1512 require a defendant’s purpose to be “wrongful.” unlike Section 1512(b) in that it does not Without an explicit meaning written use “knowingly” to modify “corrupt,” into the statute, courts have inconsis- Reading the Arthur Andersen standard into Section 1503, the Second Circuit, in the prosecution does not need to prove tently defined corrupt intent. a “wrongful, immoral, depraved, or evil” United States v. Quattrone, emphasized In 2005, the Supreme Court, in purpose. Similarly, the Ninth Circuit’s that corrupt intent must be “wrongful” Arthur Andersen LLP v. United States, Section 1503 model jury instructions, attempted to rectify a split of authority or “immoral.” While the Fifth Circuit relying on United States v. Rasheed, only by addressing what it means to “cor- does not used the term “wrongful” in its require a to show that a ruptly persuade another person” to Section 1503 pattern jury instructions, it defendant acted with the “purpose of engage in obstructive conduct under does require a defendant to act “know- obstructing justice.” Section 1512(b). The Court noted that ingly and dishonestly.” the terms “corruptly” is “normally In contrast, the Ninth Circuit has Multiple Purposes associated with wrongful, immoral, adopted a lower intent requirement for Due to the centrality of intent in an depraved, or evil,” and found that a some obstruction charges. Although it obstruction case, it is common for com- September 18, 2017

panies and prosecutors to argue about “provided the same advice that many prosecuted for making incriminating whether acts were done corruptly or criminal attorneys would do in that situ- statements, the attorney was advising his with an innocent purpose. But a jury ation.” The Ninth Circuit did not discuss client to violate the court’s order and was may not have to make a binary choice. whether the witness viewed the defen- not protecting his client’s constitutional The Fifth Circuit, Ninth Circuit, and dant’s reference to the witness’s family rights. In United States v. Cioffi, the Second Eleventh Circuit each have held that a to be a threat, which could have changed Circuit affirmed the conviction of an defendant who acts with multiple pur- the outcome of the case. attorney who told a non-client witness to poses, including innocent ones, may Based on Liew, an attorney in the either: (a) remain silent; (b) lie to the SEC; still be criminally liable so long as one Ninth Circuit doing nothing more than or (c) “visit” the target of the investigation. of those purposes was corrupt. telling witnesses not to disclose certain The witness felt the latter statement was a information to law enforcement would threat. Of course, an attorney would likely Law’s Application to Fact Pattern not have committed a . This does violate the obstruction statutes by advising Did the general counsel in the hypo- not mean that such a directive by a a witness to lie, providing corrupt benefits thetical scenario commit a crime by general counsel is a good idea. The for the witness not to talk, or threatening ordering the destruction of records? Ninth Circuit discussed how the defen- the witness, implicitly or explicitly. Based on the definitions of corrupt and dant’s instruction would be admissible Because of the complex issues that to prove the underlying crime that the the multiple-purpose intent case law, would arise if a general counsel pro- defendant was attempting to conceal, she might still have criminal exposure vided advice to employees not to talk to which shows another risk the general even if the destruction of records was federal investigators, the general coun- consistent with the company’s retention counsel would be taking by providing such a directive. sel should proceed very cautiously and policies so long as the general coun- should consider all possible negative sel also wanted to ensure that a fed- Some courts have found an attorney has committed a crime by advising a effects of giving employees this advice. eral would never see the Ultimately, the cautious and correct documents. witness not to talk. In United States approach likely would be to inform Turning to the general counsel’s v. Shotts, the Eleventh Circuit upheld employees of: (1) the possibility that law instruction to employees not to speak the conviction of an attorney who told with federal investigators, this creates a non-client witness to “just not say enforcement may want to speak with the many risks for the company and gen- anything” to the FBI so that the witness employees; (2) the employees’ the right eral counsel. For example, if the com- would not “be bothered.” The court, the to an attorney at any interview; and (3) pany was considering cooperating with reasoned that the jury could have drawn their right to speak or not to speak to the Department of Justice, affirmatively a reasonable inference that the lawyer, investigators. telling employees not to speak would who himself was implicated in the FBI’s likely harm the company’s efforts to investigation of a corrupt , was Brandon Fox is a partner in the Los obtain benefits for their cooperation. “attempting with an improper motive” Angeles and Chicago offices of Jenner & Additionally, such a statement could to silence the witness. Block LLP and a member of the firm’s violate a professional conduct rule or Shotts was decided before Arthur Investigations, Compliance and company policy, which may result in Andersen. While it still might not be a Practice. Before joining the firm, he served discipline or termination for the general good idea for the attorney to suggest as an assistant US attorney for the Central counsel. But would the general coun- that a non-client remain silent for the District of California and, earlier, for the sel’s decision to tell employees not to reasons stated above, it is unlikely post- Northern District of Illinois. He was chief speak with federal investigators amount Arthur Andersen that an attorney would of the Public Corruption and Civil Rights to a crime? Again, the answer turns be convicted of obstruction for doing Section in Los Angeles from 2015 to 2017, on intent and the interpretation of nothing more than offering this advice, and deputy chief of that section from “corrupt.” especially if the attorney is not a target 2013 to 2015. Daniel Welsh is an associ- In the Ninth Circuit, telling a witness of the underlying investigation. ate in the Los Angeles office of Jenner & to remain silent if questioned by law Even in light of Arthur Andersen, how- Block LLP and a member of the firm’s enforcement ordinarily is not criminal. ever, there are times in which an attorney Investigations, Compliance and Defense In United States v. Liew, decided in may run afoul of the law in telling a wit- Practice. He focuses his practice on sig- May 2017, the defendant told a witness ness to remain silent. In United States v. nificant criminal and regulatory matters, that disclosing certain facts “would not Cintolo, the First Circuit affirmed an attor- cross-border investigations, and complex be good” for the witness or the wit- ney’s obstruction conviction for advising commercial litigation. ness’s family. The Ninth Circuit held his client not to testify. In that case, the that such a directive was not corrupt, judge had granted the client immunity Reprinted with permission from the September 18, 2017 edition even “viewed in its most damning light.” and compelled his testimony. Because the of Corporate Counsel © 2017 ALM Media Properties, LLC. This article appears online only. All rights reserved. Further The Ninth Circuit reasoned that the witness no longer had a Fifth Amendment duplication without permission is prohibited. For information, defendant, who was not a lawyer, simply right to remain silent and could not be contact 877-257-3382 or [email protected]. # 016-09-17-02