McDonough v. Widnall
| Decision Date | 10 May 1995 |
| Docket Number | Civ. A. No. 95-B-357. |
| Citation | 891 F. Supp. 1439 |
| Parties | Major Sherry McDONOUGH, USAF, Plaintiff, v. Dr. Sheila WIDNALL, Secretary of the Air Force, ex officio, General Joseph Ashy, USAF, Commander, Air Force Space Command, ex officio; Lieutenant General Caruana, USAF, Vice Commander, Air Force Space Commander, ex officio; Major General William Jones, USAF, Commander, 14th Air Force, ex officio; Lieutenant Colonel Mary Boone, USAF, Staff Judge Advocate, Peterson Air Force Base [AFB], Colorado, ex officio; Major James T. Flanary, USAF, Circuit Trial Counsel, Randolph AFB, Texas, ex officio; Captain Denise Hilton, Chief of Claims and detailed Assistant Trial Counsel, Peterson AFB, Colorado, ex officio; Captain Michelle Place, in personam; Special Agent Yvette Morales, in personam; Special Agent Marcus Braer, in personam; The Department of the Air Force; Robert Brown, Assistant United States Attorney, ex officio; Department of Justice; Dreyfus Family of Funds; The Shareholder Services Group; Bank of America Trust and Savings Association; Ent Federal Credit Union; and Crestar Bank, Defendants. |
| Court | U.S. District Court — District of Colorado |
COPYRIGHT MATERIAL OMITTED
Richard F. Currey, Samelson, Dodge & Currey, P.C., Colorado Springs, CO, Alison Ruttenberg, Lakewood, CO, for plaintiff.
Linda Surbaugh, Asst. U.S. Atty., Denver, CO, Arthur R. Goldberg, John Schumann, U.S. Dept. of Justice, Civ. Div., Washington, DC, Major Jo Ann Stringfield, Air Force Civ. Litigation, Special Litigation Branch, AFLSA/JACL, Rosslyn, VA, Stephen L. Roth, Asst. U.S. Atty., Salt Lake City, UT, for defendants.
Plaintiff, Major Sherry McDonough, U.S.A.F. (McDonough) moves pursuant to Fed.R.Civ.P. 65 for a preliminary injunction enjoining the Air Force defendants "from using in any judicial or administrative action against Major McDonough, any bank records obtained by grand jury subpoena, any similar bank records obtained thereafter by trial counsel subpoenas issued on October 13, and 14, 1994, the Article 32 report containing grand jury material, the pretrial advice, and any other reports, memoranda, or other documents which rely in any way or were prepared from any of the bank records." (Plaintiff's Brief in Support of Motion for Preliminary Injunction p. 1-2). Jurisdiction is proper under 12 U.S.C. § 3416. Hearings on the motion were held on March 16 and May 10, 1995. For the reasons set out below, I will deny the motion for preliminary injunction but without prejudice.
Major McDonough is an active duty member of the United States Air Force stationed at Peterson Air Force Base in Colorado Springs, Colorado. In August, 1993 the United States Air Force Office of Special Investigations (AFOSI) initiated an investigation of McDonough based on allegations of forgery and larceny made by McDonough's stepdaughter, Janet S. McDonough. According to Janet McDonough, Major McDonough forged checks totalling $60,000 against a municipal bond fund account owned jointly by the stepdaughter and her father, the late Eugene McDonough.
AFOSI Special Agent Yvette Morales (Morales) testified during the hearing that in February, 1994 she consulted with Special Agent Marcus Braer (Braer) about how to get the bank records she sought. Defendant Braer told her to ask Assistant United States Attorney (AUSA) Gregory Graf (Graf) to get the records through grand jury subpoenas. Morales called Graf but he did not return her call. Braer then told Morales to try AUSA Robert Brown (Brown). Braer admitted on cross-examination that he told Morales to contact Graf and Brown to obtain grand jury subpoenas for bank records to be used in court-martial proceedings. Braer also testified that he was familiar with Fed.R.Crim.P. 6(e) long before the McDonough investigation and he suspected that information obtained through the grand jury process could not be used in the court-martial.
Acting on Braer's suggestions, Morales talked to defendant AUSA Brown in February, 1994. Brown opened a case file which was then assigned to AUSA Paula Ray (Ray). During a telephone call on March 1, 1994, Morales informed Ray that although the McDonough investigation was not a federal case, Morales wanted the grand jury information to use in a court-martial against McDonough. See Def.Exh. 33. When Ray expressed concern about this procedure, Agent Braer got on the phone and told Ray that Brown and Graf "do it (use grand jury subpoenas to obtain financial information) all the time." Braer also said he thought grand jury process would be faster than the administrative route. Ray told Braer this was an improper use of the grand jury process and declined the case for filing because there was no federal crime involved. On March 18, 1994, Ray mailed Morales a letter informing her of the impropriety of using grand jury subpoenas to obtain information for use in a court-martial. (Def.Exh. 34). Ray then closed the case file. The misaddressed letter was never received by Morales.
Undaunted, Morales and Braer again contacted AUSA Brown in May, 1994 seeking McDonough's financial information through grand jury process. This effort bore fruit for the AFOSI when financial documents were produced pursuant to grand jury subpoenas issued and served on Ent Federal Credit Union (Def.Exh. 16), Crestar Bank (Def.Exh. 17), and Bank of America (Def.Exh. 22).
The records returned in response to these grand jury subpoenas were presented to the grand jury which did not return an indictment against McDonough. However, the financial records produced in response to the grand jury subpoenas were delivered to AFOSI personnel. The AFOSI distributed McDonough's financial information obtained by the grand jury subpoenas to, inter alia, McDonough's superior officers and the Air Force promotion board. However, the Air Force failed to sign and return to the United States Attorney's office a Fed.R.Crim.P. 6(e) disclosure form. Neither did the United States Attorney's office obtain permission of the grand jury supervising judge to disclose the subpoenaed information.
On August 3, 1994, the Air Force convened an Article 32 proceeding, see 10 U.S.C. § 832, (similar to a civilian grand jury or preliminary hearing proceeding). There, the grand jury financial records were considered by the military investigating officer in determining that there was sufficient evidence to bring general court-martial charges against McDonough.
In an attempt to avoid obvious problems posed by the use of the grand jury subpoenas, on October 13 and 14, 1994, Air Force prosecutors issued "trial counsel subpoenas." See 10 U.S.C. § 846. These subpoenas, issued in the name of the "President of the United States," sought and obtained bank records not only from the three financial institutions that had produced bank records in response to grand jury subpoenas, but also under the October 13, 1994 trial counsel subpoena, records from a fourth financial institution, Dreyfus Family of Funds. (Gov't Exh. 17-23). Also on October 14, the Air Force prosecutors delivered a memorandum to McDonough providing her with copies of the trial counsel subpoenas they had issued to Ent, Crestar, and Bank of America. The memorandum to McDonough purported to give her notice, pursuant to the Right to Financial Privacy Act (RFPA or Act), 12 U.S.C. § 3405, of the procedures by which she could seek to block disclosure of the financial records sought by the Air Force. (Def.Exh. 19). The Air Force did not give notice to McDonough of its October 13th trial counsel subpoena issued to the Dreyfus Family Fund. (Def.Exh. 23).
In December, 1993, McDonough's commanders recommended a six month delay of her promotion to lieutenant colonel. (Joint Stipulation 24). Based in substantial part on information gathered by the grand jury, in September, 1994, her superiors recommended that her name be removed from the promotion list. (Def.Exh. 9). On December 30, 1994, the commander of the Air Force Space Command recommended that the Secretary of the Air Force remove McDonough from the promotion list. (Def.Exh. 13).
Facing imminent court-martial, McDonough filed a motion for a temporary restraining order (TRO) which I granted ex parte, in part because of similar pending allegations that in the recent past the AFOSI failed to follow the procedures outlined in the Right to Financial Privacy Act (RFPA), 12 U.S.C. § 3401 et seq. See Pohanic v. Department of the Air Force, 94-B-1705, and Anderson v. Widnall, 94-B-2847. The TRO was extended by consent of the parties until March 16, 1995 when a hearing was held on the request for preliminary injunction. At the close of the hearing, I extended the TRO pending this decision.
In response to the temporary restraining order and before the preliminary injunction hearing, the Air Force defendants agreed that "the government will not attempt to offer any of the grand jury subpoenaed documents during McDonough's court-martial." (Air Force Def.Response Brief p. 1). Also, the Air Force defendants stated that "McDonough's promotion removal action is being returned from the Air Force military personnel center to the initiating commander for amendment to delete all information in the file that was obtained consequent to grand jury subpoenas." Id. In addition, "the Air Force has agreed to prepare a message for dissemination to OSI agents worldwide reminding them of proper procedures under the RFPA." Id. at p. 7 fn. 2. Testimony indicates that the admonitory message has been disseminated and received.
McDonough filed in the military court a motion to suppress evidence and dismiss the charges pending before the court-martial. (Air Force Defs.' Exh. 24). On Friday, May 5, 1995, those charges were dismissed, unilaterally, without prejudice. McDonough also filed this action in federal district court claiming that defendants violated Fed. R.Crim.P. 6(e) and the Right to Financial Privacy Act in obtaining and...
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