In re Grand Jury Subpoena Dated August 9, 2000
| Decision Date | 06 September 2002 |
| Docket Number | No. M 11-189.,M 11-189. |
| Citation | 218 F.Supp.2d 544 |
| Parties | In re GRAND JURY SUBPOENA DATED AUGUST 9, 2000 |
| Court | U.S. District Court — Southern District of New York |
James B. Comey, New York City, by Peter G. Neiman, Assistant United States Attorney, Philip E. Urofsky, Senior Trial Attorney, Department of Justice, for the Southern District of New York.
Akin, Gump, Strauss, Hauer & Feld, L.L.P., New York City, by James E. D'Auguste, Mark J. MacDougall, Heather J. Pellegrino, for the Corporation.
Steptoe & Johnson, LLP, Washington, DC, by Reid H. Weingarten, Brian M. Heberlig, for the Republic.
(REDACTED)*
A grand jury in this district is investigating allegations that a New York corporation (the "Corporation") bribed senior officials in a foreign country (the "Republic") to help American companies secure the rights to the vast natural resources of that country. In particular, the grand jury is investigating whether the Corporation and its principal paid millions of dollars to high-ranking governmental officials of the Republic.
On August 9, 2000, the grand jury issued a subpoena directing the Corporation to produce virtually all of its business records dating from 1991. Over time, the Corporation has produced a number of documents — some 300,000 pages — but has refused to comply fully. The Corporation argues that it need not produce the withheld documents because 1) approximately 1,100 responsive documents located in New York are protected by the Republic's executive privilege, and 2) none of the documents located in its offices in the Republic may be produced without violating Republic law. On May 1, 2002, the Government filed this motion to compel production of the remaining documents, wherever located, except those protected by the attorney client and work product privileges. The Corporation also filed a motion on June 3, 2002, and renewed it on July 19, 2002, for an order striking the case agent's ex parte affidavit, or directing its disclosure.
This case of first impression presents the question whether a grand jury investigating suspicions that an American citizen and corporation have bribed senior foreign officials may subpoena documents that (1) the subject nation asserts are within its executive privilege, and (2) are located, in part, abroad where production is prohibited — not just by local law, but by specific opinions rendered by high legal officials of the foreign country.
After weighing the conflicting interests at stake, I conclude that the grand jury is entitled to documents from all three of the Corporation's offices, including those located in the Republic, because the Government has overcome the asserted privilege, and the interest of the United States in enforcing its criminal laws outweighs any difficulties that the Corporation may face in complying with the subpoena in contravention of Republic law.
Accordingly, the Government's motion to compel is granted. The Corporation must comply with the August 9, 2000 subpoena and produce the documents from its offices in New York and the Republic.
Doe, an American citizen, is the president and principal owner of the Corporation. He is a close advisor to senior officials in the Republic and has been appointed by the Republic as a special consultant to advise on commercial and economic affairs.
The Corporation is a merchant banking firm, incorporated in New York, with its principal office in New York City. The Corporation also has offices in the Republic, and most of its employees there are citizens of the Republic. The Corporation has been appointed by the Republic to provide consultant services on strategic planning and attracting foreign investment.
The Republic is recognized by the United States and is considered to be an important ally of this country. The Republic is home to vast natural resources that have been the subject of a number of large investments by American companies in joint ventures with Republic-owned companies.
The Government has been investigating Doe and the Corporation for several years. The grand jury that issued the August 9, 2000 subpoena is still in session. This proceeding is closed pursuant to Fed R.Crim. P. 6(e)(5).
The Government submitted an ex parte affidavit from the case agent describing the allegations in greater detail. The Corporation submitted the assertedly privileged documents from New York for the Court to review in camera.
The Corporation asserts that it first learned of the investigation beginning in June 2000. The Corporation applied to the Ministry of Justice and the Supreme Court of the Republic "for formal clarification of the legal status of [Doe and the Corporation]" "with respect to anticipated efforts by U.S. authorities to obtain records." (Corporation Mem. at 4). Shortly thereafter, two of the highest ranking legal officials of the Republic issued a joint statement concerning the relationship among the Republic, Doe, and the Corporation. The joint statement recounts the various appointments granted to Doe and the Corporation, and summarizes that Doe "provided and continues to provide" "advice and counsel" to high officials on "issues pertaining to the development of trade" between the Republic and the United States. It states that "[a]ny communication between the Republic and Mr. Doe with respect to matters of State is part of the executive deliberative process of the executive power of the Republic." It further states that any such information is considered "highly confidential and under the protection of executive privilege."
Following the subpoena issued in August 2000, the Corporation again petitioned the Ministry of Justice for direction. (Corporation Mem. at 8). On December 15, 2000, Doe wrote to the Minister of Justice. (Corporation Mem. Ex. 13). Doe asked whether responsive documents in the Corporation's offices in the Republic "can, or should be submitted in response to the subpoena." The letter asks for a determination whether the documents belong to the Corporation or to the Republic under Republic law, what jurisdiction the Republic maintains over them, and what "limitations" exist under Republic law that would prohibit transmission of the documents out of the country.
The Minister of Justice responded on January 25, 2001, opining that any information Doe possessed was considered "strictly confidential," "protected by the sovereign rights of the Republic," and "not subject to transfer to any third parties." The letter sets out seven paragraphs that describe Republic law forming the basis for the Minister's opinion. That law essentially forbids disclosure of information "connected with the interests of the State" or the "national interests" of the Republic in the development of its natural resources. The letter also points out that, under the agreement between the Corporation and the Republic, any transfer of information "is possible only with the agreement of the executive branch of the Republic." The Minister also notes that information concerning "official or commercial secrets" is protected "when this information has real or potential commercial value because it is not known by third parties." Finally, the Minister warns that no documents may be removed that contain "information of State importance," especially information "connected with the national interests," "without observing the procedures established" by Republic law.
Following a demand by the Government in March 2002 that the Corporation comply with the August 2000 subpoena, the Corporation petitioned the Ministry of Justice a third time. The Minister's response refers to Doe's letter of April 12, 2002 asking for clarification regarding civil and criminal penalties that may be imposed "in the event that documents were released from the Corporation's offices" in the Republic and what "defense and/or exceptions exist." (Corporation Mem. Ex. 16). The letter, which attaches the relevant statutes from the January 2001 letter, instructs that criminal disclosures of state secrets may be punished by incarceration of up to three years, and generally that "information given to any party by the [Republic] that relates to the national interests of [the Republic] ... cannot be removed from the territory ... without the permission of the [Republic]." (Id.).
In addition to these responses to the Corporation, the Republic made efforts to persuade the United States Government to stop the investigation, including a personal appeal from high officials of the Republic to the United States Department of State. The Corporation and the Republic also sought, and were denied permission, to disclose the Government's motion papers in this case as part of an existing effort to lobby other executive agencies to halt the investigation. These efforts have not been successful.
The subpoena in question was served on the Corporation on August 11, 2000. It sought all documents from 1991 relating to a lengthy list of individuals and entities. The list includes Doe and the Corporation, several major American companies, and high officials of the Republic.
A number of documents were produced, but the Corporation has withheld those it contends are protected by the executive privilege of the Republic. The Corporation has submitted privilege logs for the documents in New York. It has not produced any documents from the Republic, nor has it provided privilege logs.
The Government filed this motion on May 1, 2002. The Republic sought and received permission to appear. I heard oral argument and took testimony from an expert witness on international law on June 6, 2002.
The Corporation and the Republic argue that the motion to compel must be denied because it seeks documents that are...
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