12/6/2017
SCOTUS Oral Arguments Rundown: Marinello v. United States
Today the Supreme Court heard argument in Marinello v. United States No. 16-1144. As we’ve noted before here and at the Federalist Society blog this case considers what level of knowledge a tax payer has to have to be subject to the omnibus felony penalties of 26 U.S.C. § 7212(a) . Petitioner (Marinello) was represented by Matthew S. Hellman, Esq. and the government by Robert Parker. From my perch, the Court showed enormous skepticism towards the Government’s position that virtually any act or omission, no matter how slight, could subject one to felony conviction, even though the particular tax code penalties for those actions are misdemeanors. Justice Sottomayor, an active questioner in this case, seemed open to the view that the Government’s case was overcriminalizing acts that Congress had set out lesser penalties for but she seemed equally hesitant to adopt Petitioner’s solution-there can be no “corrupt” obstruction without knowledge by the Defendant that there is an IRS investigation. She and Justice Gorsuch teamed up to offer Petitioner another way out, that there must be some affirmative interaction with the IRS. Mr. Hellman appeared to resist this at first but, upon reflection, and most clearly in rebuttal, stated such a ruling would be acceptable (while continuing to press Petitioner’s view).
The Justices, including Justice Kagan, seemed troubled by the Petitioner’s proposed “fix” of the Government’s overreach on the statute because they could not square it with the text of Section 7212(a). Even so, Justice Kagan, unprompted, called the statute “ungodly borad.” Justices Breyer, Alito and Roberts, pressed the Government on the danger of common behaviors, such as using cash, that could become felonies under the Government’s construction. Justice Breyer was concerned that paying a gardener or snow shoveler in cash could be felonious. Justice Alito posited that a lower price for services if cash was paid is “known” to be for the purposes of not reporting income, and Justice Kagan agreed. (This universal interpretation among the Justices is belied by what a small business owner once told me “Cash don’t bounce.”). Justice Gorsuch took issue with the IRS position that it is a “brooding omnipresence” always collecting taxes and so a taxpayer should know throwing out receipts or keeping sloppy records will, as Justice Alito noted “impede” the IRS in administering the tax code.
Mr. Parker for the Government attempted to convince the Justices that the IRS and the Government were circumspect in the use of the omnibus provision. Justice Kagan pounced. Attorney General Sessions has famously issued a directive that the Justice Department charge the highest crime, with the most penalties possible in every case. Mr. Parker’s attempt to lean on prosecutorial discretion was undermined as he had to admit the Justice Department policy to both Justices Kagan and Roberts who were concerned about it and obviously eager to make sure that policy was in the record and admitted by the Government. Justice Ginsberg, whose late husband, Martin was a tax Professor at Georgetown, worried that any code violation could be charged as being done corruptly and thus subject to the extra three-year penalty and felony conviction. Justices Gorsuch posited that the statutory language seemed to point to having to “corruptly” impede something other than just make the IRS’s job harder somewhere someday. Justice Breyer insisted the Government agree with his definition of the mens rea requirement, which Mr. Parker eventually gamely did.
Upon rebuttal Petitioner made clear his position that any cabining of the statute the Court arrived at that recognized Mr. Marinello’s actions did not fall within the statute would be acceptable to Petitioner. He and Justice Gorsuch agreed that “a win’s a win.” Having picked up the signal from the Chief and Justice Kagan, Mr. Hellman finished noting that whether not giving everything to your accountant, using cash or keeping meticulous records would be criminalized rested on prosecutorial discretion that was obviated by the Justice Department’s “charge the highest crime” mandate.
At least from oral argument it appears the Government’s overbroad interpretation of the statute and its play for unrestrained prosecutorial power regarding it, is likely to doom its case despite a well-argued defense of that policy. It also appears that the bright line rule that Marinello sought (and that we also pressed in our amicus) does not have the full support of the Court. Nonetheless, today in this case it was a good day to be the Petitioner.
To learn more about this case, watch the short SCOTUSbrief video below, via The Federalist Society
John J. Vecchione is president and CEO at Cause of Action Institute, amicus
11/27/2017
CoA Institute Seeks CFPB Records Surrounding Controversial Appointment of Former Director’s Subordinate to Lead the Agency
Washington D.C. – Cause of Action Institute (“CoA Institute”) today filed a Freedom of Information Act (“FOIA”) request with the Consumer Financial Protection Bureau (“CFPB”) for all records relating to the last-minute appointment made by the agency’s departing director, Richard Cordray, that made his former chief of staff, Leandra English, deputy director. The move allegedly puts Ms. English in line to take over as acting director, despite President Trump’s recent appointment of Mick Mulvaney to the same position. CoA Institute seeks to better understand the process by which English was named deputy director, and what process led to her claiming to be acting director.
CoA Institute President and CEO John J. Vecchione: “The CFPB is playing a dangerous game, which threatens to block political accountability of the Bureau. It has created a ‘two-headed beast’ that creates uncertainty in a critical sector of our economy. Americans deserve to know the motivations and legal foundation behind Mr. Cordray’s last-minute decision to promote his chief of staff, potentially in defiance of the appointment of the Executive under the Vacancies Act.”
On Friday, when Richard Cordray officially resigned from his position, he named English as deputy director. Following President Trump’s subsequent appointment of Mulvaney, on Sunday night, English filed a lawsuit against both Trump and Mulvaney asking the court to halt the appointment of Mulvaney as acting director.
CoA Institute’s FOIA request seeks all records of communications regarding the appointment of English, including emails and other communications between Cordray, English, Senator Elizabeth Warren, and others.
The full FOIA request is available here
For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org
11/9/2017
Court Dismisses Hillary Clinton Email Recovery Case
Washington D.C. – A federal judge in the U.S. District Court for the District of Columbia today dismissed a case brought by Cause of Action Institute (“CoA Institute”) and Judicial Watch against the Secretary of State and the Archivist of the United States to compel them to fulfill their legal obligations to recover all of Hillary Clinton’s unlawfully removed email records during her tenure as Secretary of State.
In December 2016, the D.C. Circuit Court of Appeals ruled in favor of CoA Institute and Judicial Watch, overturning an earlier opinion by the same district court judge that had dismissed the case as “moot.” Despite the higher court’s rebuke, the Secretary of State and U.S. Archivist still refused to perform their statutory obligations under the Federal Records Act to recover Secretary Clinton’s email records by initiating action through the Attorney General.
CoA Institute President and CEO John J. Vecchione: “The fact that this case was dismissed does not absolve Secretary Clinton or show that all of her unlawfully removed email records have been recovered. In fact, the Court’s decision shows that Secretary Clinton violated the Federal Records Act and that a subset of her work-related emails remains missing. Unfortunately, the Court concluded that efforts by the FBI in its investigation of Secretary Clinton’s handling of classified material, which resulted in the recovery of numerous emails that Clinton had not previously turned over, left nothing further for the Attorney General to do.”
This case, for the first time, brought to light that the FBI’s investigation included the issuance of grand jury subpoenas. The Court stated that “referral to the Attorney General” is the typical remedy for unrecovered records, but found that unnecessary in this case because:
The Government has already deployed the law enforcement authority of the United States to recover Clinton’s emails, as the FBI has sought those records as part of its investigation into whether Clinton mismanaged classified information. The Court thus need not speculate about what the Attorney General might do.
Testimony submitted by FBI Assistant Director E.W. Priestap opined that the Bureau’s investigation was conclusive. However, the FBI’s investigation focused solely on “unauthorized transmission and storage of classified information” and was not a Federal Records Act record-recovery effort, which was the focus of this litigation. Regardless, the Court found Agent Priestap’s opinions “relevant and reliable,” stating:
Although the FBI and the Attorney General are not one and the same, Jeff Sessions would necessarily look to his investigative arm to recover Clinton’s emails. The FBI’s own assessment of its searches is therefore telling.
Read the full opinion here
09/27/2017
CoA Institute Moves to Strike FBI Official’s Opinions from Clinton Email Case
Washington D.C. – Cause of Action Institute (“CoA Institute”) today filed a motion to strike from the record improper opinion testimony submitted by FBI Assistant Director E.W. Priestap. The declaration was filed in support of the government’s defense in a pending case against the State Department and National Archives and Records Administration regarding former Secretary of State Hillary Clinton’s unlawful removal of emails. The suit seeks to refer the matter to the Attorney General, which is what the law requires.
A federal judge in August ordered the government to publicly release the unredacted declaration that it had previously filed so that only the judge was able to review it. The FBI’s declaration includes several opinions that the government relies on to support its case. For example, Mr. Priestap states that “[i]t is my opinion that there are no further investigative actions that can be undertaken by the FBI to recover additional Clinton work-related e-mails which would be meaningful to the investigation, as described above.”
However, the investigation Mr. Priestap is referencing is “the potential unauthorized transmission and storage of classified information on the personal e-mail server of former Secretary Clinton.” He is not referencing a record-recovery effort pursuant to the Federal Records Act (“FRA”), which is the subject of this litigation.
Cause of Action Institute President and CEO John J. Vecchione: “The FBI’s declaration revealed grand jury subpoenas where there was probable cause to believe classified information may have been involved. This litigation is not merely about classified information, but about the government doing everything in its power to recover Secretary Clinton’s records, in accordance with the law. The opinions offered by Mr. Priestap are unfounded under the applicable standard of law and ignore that this suit seeks more than classified material, which was the FBI’s interest.”
The full Motion to Strike is available here.
CoA Institute also filed its reply brief available here.
For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org
09/11/2017
08/31/2017
Judge Orders Government to Reveal Evidence in FBI Clinton Email Investigation
Washington D.C. – The Honorable James Boasberg, a federal judge for the U.S. District Court for the District of Columbia, today ordered the government to produce an unredacted declaration filed in secret early this summer containing new, undisclosed details about the scope of the FBI’s investigation into Hillary Clinton’s email practices as Secretary of State.
The government had previously disclosed the evidence to the court ex parte and in camera, meaning only the judge was able to review it, but characterized the declaration as including, “additional details about the grand jury process . . . as well as about other sealed proceedings” and was submitted to provide “further details of the subpoenas to establish to the Court’s satisfaction the thoroughness of the inquiries made in this regard.”
Cause of Action Institute filed a motion in June to produce the declaration and the judge today granted that request.
Cause of Action Institute President and CEO John J. Vecchione: “I applaud the court’s opinion. The government attempted to end a case with evidence no one could review. This order makes public details submitted by the government about the FBI’s efforts to recover then-Secretary Clinton’s unlawfully removed emails. Americans deserve to know the full scope of that investigation, and we, as Plaintiffs, should have an opportunity to contest the relevance of the government’s facts.”
In his order, Judge Boasberg writes:
“The 2016 presidential election may have come and gone, but Plaintiffs Judicial Watch and Cause of Action Institute’s quest for Hillary Clinton’s emails lives on. As most readers will remember, Clinton used private email accounts during her tenure as Secretary of State, embroiling the government in myriad Freedom of Information Act suits. In this case, however, Plaintiffs have taken a different tack, alleging a violation of the Federal Records Act. That is, they claim Defendants State Department and the National Archives and Records Administration failed to maintain records of Clinton’s emails and must now seek the Department of Justice’s Case assistance in their recovery. Most broadly characterized, Plaintiffs’ suit pertains to tens of thousands of communications. At this stage, however, the parties have largely zeroed in on a sliver of that trove — to wit, emails sent by Clinton on two Blackberry accounts during her first weeks in office.
“The present controversy is narrower still. To establish its good-faith recovery efforts, the Government has submitted a declaration describing grand-jury subpoenas issued to Clinton’s service providers. The catch? It offers the full version for in camera and ex parte review only. Plaintiffs have responded with a Motion to Produce, arguing that to the extent this Court might rely on the declaration, they must have unfiltered access. After reviewing the document in camera, the Court concludes that it largely rehashes information already made public, thus obviating any need for secrecy. The Court will therefore grant Plaintiffs’ Motion in large part and, subject to a very limited exception, order that Defendants resubmit an unredacted version of the declaration.”
Judge Boasberg’s full order is available here.
The Plaintiffs’ motion to produce the declaration is available here.
For information regarding this press release, please contact Zachary Kurz, Director of Communications: zachary.kurz@causeofaction.org