In re Grand Jury Subpoenas Dated March 9, 2001
| Decision Date | 13 December 2001 |
| Docket Number | No. M11-189(DC).,M11-189(DC). |
| Citation | 179 F.Supp.2d 270 |
| Court | U.S. District Court — Southern District of New York |
| Parties | In re GRAND JURY SUBPOENAS DATED MARCH 9, 2001 |
Mary Jo White, United States Attorney for the Southern District of New York by Evan T. Barr, Jonathan N. Halpern, Assistant United States Attorneys, New York, NY, for the Government.
Kirkland & Ellis, Washington, DC by Laurence A. Urgenson, for Marc Rich.
Fried Frank Harris Shriver & Jacobson, New York, NY by Audrey Strauss, Lankler Siffert & Wohl LLP, New York, NY by John S. Siffert, Stillman & Friedman, New York, NY by Peter Chavkin, Hafetz & Necheles, New York, NY by Frederick P. Hafetz, Solomon, Zauderer, Ellenhorn, Frischer & Sharp, New York, NY by David Ellenhorn, Jonathan Lupkin, for Respondent Lawyers.
(REDACTED)*
On January 20, 2001, his last day in office, President Clinton granted unconditional pardons to Marc Rich and Pincus Green. Rich and Green had been indicted in 1983 in this District for wire fraud, mail fraud, racketeering, conspiracy, tax evasion, and trading with the enemy. The pardons terminated the criminal proceedings after repeated efforts by Rich and Green and their lawyers to persuade the U.S. Attorney's Office for the Southern District of New York (the "Southern District" or the "Government") to drop the charges had failed.
The pardons were highly controversial and generated much public outcry: Rich and Green were absolved of criminal liability, even though they had refused for some 17 years to return to the United States to stand trial. In addition, the pardon petition was submitted directly to the White House, with no notice to the prosecutors who had brought the charges or to the Pardon Attorney at the Department of Justice.
In February 2001, the Southern District commenced an investigation into the circumstances surrounding the granting of the pardons. On or about March 9, 2001, the grand jury issued subpoenas duces tecum to the five lawyers (the "Marc Rich Lawyers") who had represented Rich and Green in connection with their pardon application. The Marc Rich Lawyers provided some evidence in response to the subpoenas, but they objected to providing certain other documents and testimony on the basis of the work product doctrine and attorney-client privilege.
Before the Court is the Government's motion to compel production of certain of the withheld documents and testimony. The motion is granted.
The work product doctrine protects a lawyer's work product, prepared "in anticipation of" or "because of" litigation, from unnecessary intrusion by adversaries. The attorney-client privilege protects confidential communications made for the purpose of obtaining legal advice. Here, once Rich and Green decided to seek presidential pardons, the Marc Rich Lawyers ceased providing legal services in an adversarial context. They faced no opposing parties or adversaries and the pardon proceedings were entirely ex parte. Rich and Green had been fugitives for some 17 years, the parties had reached an impasse, and it was clear that there would be no further litigation of the criminal charges. The Marc Rich Lawyers were acting principally as lobbyists, working with public relations specialists and individuals — foreign government officials, prominent citizens, and personal friends of the President — who had access to the White House. They were not acting as lawyers or providing legal advice in the traditional sense. Accordingly, the objections based on the work product doctrine and attorney-client privilege are overruled, to the extent set forth below.
In the early 1980's, the Southern District began investigating Rich and Green for alleged violations of the federal income tax and oil price control laws. Rich and Green were principals in Marc Rich & Co., A.G., a commodities firm headquartered in Switzerland; at the time Rich and Green were U.S. citizens based in New York. (See They Went Thataway: The Strange Case of Marc Rich and Pincus Green, H.R.Rep. No. 537, 102d Cong., 2d Sess. at 2 (1992) (submitted as GX 2);1 Statement of M. Weinberg, Jr. & M.J. Auerbach, Hearings Before House Comm. on Gov't Reform, 107th Cong., 1st Sess., at 3-5 (Feb. 8, 2001) (submitted as GX 3)). A grand jury began investigating Rich and Green in April 1982. See Action, S.A. v. Marc Rich & Co., 951 F.2d 504, 506 (2d Cir.1991).
In August 1982, Rich became naturalized as a citizen of Spain, purporting to renounce his U.S. citizenship. Id. Rich and Green also acquired Israeli citizenship. (Petitioners' Application for Pardon, at 1, 3) (submitted as GX 1).
A few months later, the Southern District informed counsel for Rich and Green that their clients were about to be indicted. (GX 3, at 8-9). Through counsel, Rich and Green sought to resolve the matter by offering to pay a fine in return for a dismissal or reduction of the criminal charges, but the Government rejected the proposal. (Id. at 9; see also GX 2, at 3). Apparently, in June 1983, while the discussions were pending, Rich and Green left the United States. (GX 2, at 3; GX 3, at 9). They never returned.
In September 1983, the grand jury issued a 51-count indictment against Rich, Green, and others, for wire fraud, mail fraud, racketeering, racketeering conspiracy, tax evasion, and trading with the enemy. The Government filed a 65-count superseding indictment in March 1984.
In July 1984, the United States sought to extradite Rich and Green to Switzerland to stand trial on the superseding indictment. In September 1984, the Swiss authorities denied the request because extradition on the charges in issue was not permitted under Swiss law. The Government did not seek Rich's extradition from Spain because the Spanish government advised that Rich, as a naturalized Spanish citizen, was not subject to extradition. Likewise, U.S. officials were advised that Israel would not extradite Rich or Green. (GX 2, at 9).
In October 1984, Marc Rich & Co., A.G. and Marc Rich & Co. International, Ltd. pled guilty to false statement and tax evasion charges. They were ordered to pay fines and penalties in excess of $150 million.2
In the years following the indictment, Rich and Green retained a number of attorneys who made repeated efforts to persuade the Southern District to drop the criminal charges.
In 1985, Rich and Green asked Leonard Garment to represent them. Garment, Lewis Libby, Robert Fink, and other lawyers analyzed the charges and made a presentation to the Southern District in 1987, but the effort to persuade the prosecutors to "re-examine" the charges was unsuccessful. (See Testimony of Lewis Libby, Hearings Before House Comm. on Gov't Reform (Mar. 5, 2001)) (submitted as RX 5). The lawyers later retained two professors, experts in tax law, to assist in the analysis. In December 1990, the tax experts submitted a set of Proposed Findings of Fact and Conclusions of Law to the Southern District, arguing that Rich's company had correctly reported its income. (Letter from B. Wolfman to G.E. Lynch, dated Dec. 7, 1990, & Att.) (submitted as RX 6). The prosecutors were not persuaded.
In May 1994, two attorneys for Rich and Green, Lawrence A. Urgenson and Fink, met with the Southern District to discuss the Rich and Green case. The meeting was followed by a lengthy letter to the Southern District from Urgenson requesting further discussion and arguing that "the charges in the current indictment do not provide an appropriate basis for disposition of this case." (Letter from L. Urgenson to P. Fitzgerald, dated June 3, 1994) (submitted as GX 5). The Southern District responded as follows:
There is every reason to believe that if a full discussion of the evidence took place and convinced you that the Government could prove your clients' guilt, little would change. Your clients would continue their life on the lam—with, perhaps, another change of lawyers....
... [I]f your clients genuinely believe that they have done nothing wrong, they should board the next plane to New York and subject themselves to the jurisdiction of the Court. Even if you were unable to persuade the Government not to proceed on the Indictment, they would remain free to put forth their defense, including the testimony of the two eminent tax professors, before a jury with the assistance of able counsel....
Please be assured that if Marc Rich and Pincus Green are ever sufficiently serious about negotiations to surrender to the jurisdiction of the Court, the Government will give you ample opportunity to persuade us that your clients are wrongly accused.
(Letter from P. Fitzgerald to L. Urgenson, dated June 27, 1994) (submitted as GX 6).
Because it was apparent that the Southern District would not negotiate with Rich and Green unless they were willing to return to the United States, they and their lawyers began considering other options. In or about 1997, Fink met with Michael Steinhardt, a businessman, philanthropist, and friend of Rich. (See Resp't Mem. at 10). [redacted]
Steinhardt introduced Fink to Gershon Kekst, a well-known public relations consultant and philanthropist and president of a New York public relations consulting firm. ([redacted]; Resp't Mem. at 11). [redacted]
In early 1999, Fink and Kekst spoke about the possibility of seeking a presidential pardon for Rich. Fink asked Kekst to recommend someone "who understood the entire political process"; Kekst said he thought that Jack Quinn, the former White House counsel, might be a person to employ for purposes of pursuing a pardon, if Rich ever decided to seek one. (Testimony of Robert Fink, Hearings Before House Comm. on Gov't Reform (Mar. 1, 2001)) (submitted as GX 13). In his testimony before the House Government Reform Committee, Fink explained his desire to...
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