United States v Allen and privilege against selfincrimination

Transcription

1 globalinvestigationsreview.com United States v Allen and privilege against selfincrimination 02 August 2017 Peter Binning and Robert Hanratty Peter Binning and Robert Hanratty of Corker Binning examine how United States v Allen has e ectively immunised compelled UK testimonies from use in a subsequent US prosecution. Lawyers in the UK practising in white-collar crime need to take account of the decision in United States v Allen No (2d Cir 2017), which was handed down on 19 July 2017 by the United States Court of Appeals for the Second Circuit. The decision means that information obtained from persons interviewed by the UK Serious Fraud O ce (SFO) under section 2 of the Criminal Justice Act 1987 or by the FCA under section 171 of the Financial Services and Markets Act 2000, cannot be used by a prosecutor in US criminal proceedings against the interviewee personally. The court ruled that the Fifth Amendment's prohibition on use of compelled testimony in US criminal proceedings applies even when a foreign sovereign has compelled the testimony. The constitutional protection of privilege against self-incrimination thus prohibits the use and derivative use of foreign compelled testimony in a US criminal case against the defendant who provided that testimony. Facts of the case 1/7

2 The defendants Anthony Allen and Anthony Conti were employed in the London o ce of Rabobank in the 2000s and played a role in the bank's submission process for the London Interbank O ered Rate (Libor). In 2013, both defendants were investigated by enforcement agencies in the UK and the US for their roles in setting that rate. As part of their investigation the UK Financial Conduct Authority (FCA) interviewed Allen and Conti, who were both compelled to testify and given "direct use" but not "derivative use" immunity. (In contrast, and discussed further below, under American constitutional law if a witness is compelled to testify he must be granted use and derivative use immunity.) Refusal by Allen or Conti to testify to the FCA could have resulted in their imprisonment. The FCA subsequently decided to initiate action against one of the defendants' co-workers, Paul Robson, and thus disclosed to him the relevant evidence against him, including the compelled testimonies of Allen and Conti. Robson closely reviewed that material, annotating it and making several pages of handwritten notes. The FCA regulatory case against Robson was stayed in favour of a criminal prosecution against him by the US Department of Justice (DOJ). Robson pleaded guilty to the US charges and became an important DOJ co-operator. Ultimately, Robson was the sole source of certain material information supplied to the grand jury that indicted Allen and Conti, and also provided signi cant testimony to the petit jury when called as a trial witness. Both Allen and Conti were convicted of conspiracy to commit wire fraud and bank fraud stemming from manipulation of Libor and were each given custodial sentences. Allen and Conti appealed against their convictions, contending that the US government violated their Fifth Amendment rights when it used - in the form of tainted evidence from Robson - their own compelled testimony against them. Constitutional basis for the decision The court identi ed two constitutional bases for the requirement that a confession must be voluntary for it to be admitted into evidence: rst, the Fifth Amendment right against selfincrimination; and second, the due process clause of the Fourteenth Amendment. With regard to the due process protections, the exclusionary rules attaching to unreasonable searches (under the Fourth Amendment) and to otherwise valid confessions given without Miranda warnings, for example, are "judicially created remedies designed to safeguard [ ] rights generally through [their] deterrent e ect, rather than a personal constitutional right of the party aggrieved" [page 36]. Any such deterrent, which could be e ective in dissuading United States authorities from using improper techniques, could have little e ect upon foreign authorities. The self-incrimination clause was therefore the proper constitutional basis upon which to assess the requirement of "voluntariness" to confessions procured by foreign law enforcement agencies. The Fifth Amendment freedom from self-incrimination is a personal trial right of the accused in any 2/7

3 US criminal case. To that end, a violation of that right occurs only when a compelled statement is o ered at trial against the defendant. Notwithstanding what occurs prior to trial, the right not to testify against oneself at trial is "absolute". Decision A violation of a due process protection is fully accomplished at the time of the unreasonable governmental intrusion, whether or not the evidence is sought to be used in a criminal trial. By contrast, a violation of the Fifth Amendment occurs only at trial, even if the conduct of law enforcement o cials prior to trial may ultimately impair that right. Applying that distinction, the court held that regardless of the origin, domestic or foreign, of a statement, it cannot be admitted at trial in the United States if it was compelled. The privilege against self-incrimination therefore protects defendants in US criminal trials who have given compelled testimony to foreign o cials. Moreover, there is no condition that such compelled testimony be based on a matter of illegality or misconduct on the part of the agency applying the compulsion. Defendants are a orded the protection of the Fifth Amendment even when their testimony was compelled pursuant to a lawful foreign process. The court found that the compelled testimonies of the defendants had been used against them in violation of their Fifth Amendment rights, at both the indictment and trial stage. It therefore reversed the convictions and dismissed the indictment against them. Consequences for international criminal law enforcement During oral argument, counsel for the US government was concerned that prohibiting the use in US courts of testimony compelled by a foreign authority "could seriously hamper the prosecution of criminal conduct that crosses international borders" [page 47]. The government submitted, "a foreign government could inadvertently scuttle prosecutions in the US by compelling testimony and then making that testimony available to potential witnesses." The court gave that argument little weight. First, it failed to account for the fact that such a risk already exists in the US constitutional structure, which is composed of state and national governments. The DOJ does not control the granting or handling of witness immunity by the states or by the US Congress. Secondly, the court said, "for better or worse, we live in a world of nation states, in which our Government must be able to function e ectively in the company of sovereign nations" [page 48]. The court was "con dent" that the US government would be able to work e ectively with foreign authorities. Indeed, the US authorities may have little option but to do so because as the court pointed out, cross-border prosecutions have become more common and necessarily entail intimate coordination between the United States and foreign authorities. The court cited with 3/7

4 approval former US assistant attorney general Leslie Caldwell who had previously said, " [c]ollaboration and coordination among multiple regulators in cross-border matters is the future of major white-collar criminal enforcement". Moreover, as part of such collaboration the US has taken steps to place criminal prosecutors in foreign law enforcement agencies including Eurojust and Interpol, and will also place anti-corruption prosecutors at the FCA to work on white-collar crime. The area of securing witness testimony, in particular, is one in which intimate cooperation will be needed, but the court was adamant that whatever the "brave new world of international criminal enforcement" would entail, joint investigations would not be a mechanism used to deny full protection of a trial right regarded as "fundamental and absolute". The doctrine in Kastigar v United States The judgment in Allen also means that whenever a US prosecutor brings a case against a potential defendant who has given compelled testimony abroad, the government will be obliged to justify its case under the doctrine set out in Kastigar v United States, 406 U.S. 441 (1972). In Kastigar the Supreme Court upheld the constitutionality of compelling testimony in exchange for "use and derivative use" immunity because the scope of such protection was coextensive with the scope of the protection in the Fifth Amendment. Kastigar protection bars the "use and derivative use of compelled testimony, as well as evidence derived directly and indirectly therefrom" [Kastigar, at 453]. It provides a comprehensive safeguard barring the use of compelled testimony as an investigatory lead, and also barring the use of any evidence obtained by focusing an investigation on a witness as a result of his compelled disclosures. To enforce the protections under Kastigar, the court established a doctrine that whenever a witness has been compelled to testify on matters for which he or she is later prosecuted, the government bears "the heavy burden of proving that all of the evidence it proposes to use was derived from legitimate independent sources" [Kastigar, at 461]. That burden is not limited to simply negating any suggestion of taint but rather it imposes on the prosecution the a rmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony. In Allen that burden proved too high for the government to overcome. It failed to demonstrate that the evidence given by Robson at the trial of Allen and Conti was not tainted by Robson's review of the defendants' compelled testimony. At a minimum "the Government is required to prove that [a witness's] exposure to compelled testimony did not shape, alter, or a ect the information that he provided and that the Government used." Robson himself, however, had admitted to the district court that the testimony he gave to the FCA and the testimony he gave before the jury in the trial of Allen and Conti were very di erent, and the Court of Appeal found that he "lacked the ability to separate the wheat of his unspoiled memory from the cha of the defendants immunized testimony". 4/7

5 Discharging the burden under Kastigar is a heavy duty but may be achieved by "memorializing the witness's testimony prior to his or her exposure". What is certain, however, is that "a bare, generalized denial of taint from a witness who has materially altered his testimony after being substantially exposed to a defendant's compelled testimony is insu cient as a matter of law to sustain the prosecution's burden that the witness's testimony was derived from a wholly legitimate source" [page 70]. The anomaly in United States v Balsys The decision in Allen also presents a curious juxtaposition when contrasted to the position of suspects testifying in the United States but only facing criminal prosecution outside the United States. Under the decision in United States v Balsys 524 U.S. 666 (1998), individuals being questioned by the US government may not invoke the Fifth Amendment privilege based on a fear of foreign prosecution. Balsys, who was facing potential criminal prosecution in Lithuania, Israel and Germany for Nazi participation during World War II, was subpoenaed to testify to the O ce of Special Investigations of the Criminal Division of the United States Department of Justice (OSI). The OSI was investigating whether, contrary to Balsys' representations on his immigration visa, he had participated in Nazi persecution during World War II. At his deposition before the OSI, Balsys refused to answer questions and invoked his right against self-incrimination on the ground that his responses could subject him to criminal prosecution abroad. The Supreme Court held that "concern with foreign prosecution is beyond the scope of the Self-Incrimination Clause" and therefore Balsys was prohibited from asserting a Fifth Amendment right with respect to a potential foreign criminal prosecution. Advising clients in the UK Subject to the caveat in the nal section below, Allen provides powerful authority for lawyers in the UK (and elsewhere outside the United States) when advising clients who are faced with a compelled interview by a domestic authority, or compelled to give evidence under a witness summons to a UK court. Any such testimony to an authority or court would be immunised from use in a subsequent US prosecution against them. It is important to note that this does not mean that evidence given in a compelled interview or to a court under a witness summons could never be part of a subsequent US criminal prosecution. Rather, for such material to be included the US prosecutor would have to discharge its burden under Kastigar (ie, that all of the evidence it proposes to use was derived from legitimate independent sources). As described above, that burden is substantial and the US prosecutor was unable to discharge it in Allen. However, in cases where a US prosecutor is able to locate a legitimate independent source for the material given under compulsion, then by virtue of its untainted origin that material will be admissible in the US prosecution. 5/7

6 The judgment also means that arguments for ad hoc arrangements by UK courts in order to mitigate a witness's fear of incriminating him or herself prior to a US criminal prosecution ought potentially to carry less weight. In Attorney General of Zambia v Meer Care & Desai & Ors [2006] EWCA Civ 390, the appellants faced criminal prosecution in Zambia relating to matters closely associated to an action taken in civil proceedings in England. To protect the appellants' privilege against self-incrimination, the court made an order "to ensure that the trial will be in private and that no use will be made of any pleading, document, witness statement or oral evidence led, disclosed, served or given in these proceedings" [32]. To the extent that US criminal proceedings are concerned, an argument to that e ect will now be much less powerful, but also less necessary by virtue of the protections a orded under Allen. Indeed, for those faced with balancing the competing interests of compelled testimony in the UK and criminal proceedings in the US, their position has been greatly enhanced by Allen. That is because, irrespective of any such protections granted under Zambia, in the event that a US prosecutor subsequently might seek to remove the ring-fencing arrangement (under a s.2 notice) by arguing, for example, that material aspects of the case had changed compared to the facts under which the ring-fencing was granted, in that situation the UK judge could not bind himself as to his prior order. The judge would have to consider the merits of the application with the potential result of the prior order being altered. Ring-fencing therefore was an imperfect solution and not a cast-iron guarantee that the US prosecutor would never get hold of and make use of the ringfenced testimony. A note of caution: what constitutes compulsion? Notwithstanding the protections set down in Allen, the court did leave open one line of argument to a US prosecutor seeking to use an ostensibly immunised testimony. The court suggested that in the event that a hostile government might endeavour to sabotage US prosecutions by immunising suspects and publishing their testimony, then the court's decision in Allen would not necessarily prevent prosecution in the United States. Speci cally, the court held that "should the circumstances in a particular case indicate that a foreign defendant had faced no real threat of sanctions by his foreign government for not testifying, then that defendant's testimony might well not be considered involuntary" [page 50]. A necessary element of availing of the privilege against self-incrimination right under the Fifth Amendment is some element of compulsion. In assessing whether the testimony in such a case was compelled by an actual threat, it would be relevant to consider whether the underlying investigation appeared to be bona de. A sham investigation, for instance, concocted to bestow immunity on "suspects" in exchange for their "compelled" testimony would be unlikely to produce testimony that was actually compelled, and thus actually involuntary. A necessary element of compulsion was a credible threat of imprisonment in the event of failure to testify. 6/7

7 While the court raised no question as to the legitimacy of the procedures employed by the FCA (having accepted that Allen and Conti were compelled to testify upon threat of imprisonment) the court's language on "bona de" and "sham" investigations potentially allows the US government to test the quality of the foreign compulsion and raise the argument in future cases that testimony it wishes to use is not in fact immunised because, for example, the political agenda of a certain foreign power seeks to frustrate the prosecuting authorities in the United States. "The circumstances of the foreign government's publicizing the defendant's supposedly compelled testimony would obviously be an important factor in evaluating a purportedly bona de investigation," but it is not di cult to conceive of a future argument by a US prosecutor that an ostensibly friendly foreign power is in fact "hostile" to the mandate or position of United States' law enforcement agencies. In light of the prospect that a US prosecutor may therefore look into the nature and quality of the foreign investigation to discern whether or not the requisite level of compulsion existed, it may be worth stressing at the outset of an interview with a UK authority that the interviewee is only attending and answering questions because of the potential sanctions faced for refusing to do so (contempt of court) and that any testimony given is provided involuntarily. Comment & analysis 7/7