U.S. v. Rosen

Citation487 F.Supp.2d 721
Decision Date08 May 2007
Docket NumberNo. 1:05cr225.,1:05cr225.
PartiesUNITED STATES of America, v. Steven J. ROSEN and Keith Weissman.
CourtU.S. District Court — Eastern District of Virginia

John N. Nassikas, III, Arent Fox PLLC, Erica Emily Paulson, McDermott Will & Emery, Washington, DC, for Keith Weissman.

Kevin Digregory, William N. Hammerstrom, Jr., United States Attorney's Office, Alexandria, VA, for United States of America.


ELLIS, District Judge.

In this prosecution for conspiracy to violate the Espionage Act, defendants have moved for an evidentiary hearing and eventually, dismissal of the indictment to remedy the government's alleged constitutional violations. Defendants allege that the government relied on the Thompson Memorandum1 to pressure defendants' employer, the American Israel Public Affairs Committee (AIPAC), to terminate defendants from their jobs and to cease advancing defendants' attorneys' fees for their defense in this case. According to defendants, this pressure violated their constitutional rights under the Fifth and Sixth Amendments by depriving them of both due process of law and the right to counsel.

For the reasons that follow, that defendants' motion must be denied, for even assuming the government engaged in the conduct alleged, it did not prejudice the defense. Importantly, however, the result reached here is neither an endorsement of the Thompson Memorandum policy, nor does it diminish the conclusion that defendants' allegations, if true, reflect government conduct that is inappropriate and fraught with the risk of constitutional harm.

A. Background

Both defendants are charged in a superceding indictment, returned August 4, 2005, with conspiracy to disclose national defense information ("NDI") to persons not authorized to receive it, in violation of 18 U.S.C. § 793(g) and (e). Rosen is additionally charged with aiding and abetting alleged co-conspirator Larry Franklin's unauthorized disclosure of NDI, in violation of 18 U.S.C. §§ 793(d) and 2. The superceding indictment generally alleges that over the course of several years, defendants (i) cultivated sources of information within the United States government, (ii) obtained national defense information from those sources, and (iii) disseminated that information to persons not authorized to receive it, including other AIPAC staff, journalists, and foreign government officials. For a more comprehensive recitation of the allegations against defendants, see United States v. Rosen, 445 F.Supp.2d 602 (E.D.Va.2006) (Memorandum Opinion denying motion to dismiss) (Rosen I).

B. The Thompson Memorandum

The government conduct at issue had its genesis in what is colloquially known as the Thompson Memorandum, the Department of Justice's (DOJ's) policy directive and guidance to United States Attorneys concerning the exercise of charging discretion in cases of potential organizational wrongdoing. See L. Thompson, Principles of Federal Prosecution of Business Organizations (Jan. 20, 2003). Issued on January 20, 2003, the Thompson Memorandum was in force during the period of time relevant here and was not withdrawn until January 12, 2006, when it was replaced by the so-called McNulty Memorandum, a new policy directive addressing the same subject. See P. McNulty, Principles of Federal Prosecution of Business Organizations (January 12, 2006).2 The core of the Thompson Memorandum is its ennumeration of nine factors, summarized below, that prosecutors were directed to consider in deciding whether to charge business organizations or other entities3 whose agents were suspected of wrongdoing:

1. the nature and seriousness of the offense,

2. the pervasiveness of wrongdoing within the corporation, including any management culpability,

3. any history of similar conduct by the corporation,

4. the corporation's timely, voluntary disclosure of wrongdoing and willingness to cooperate in the investigation of its agents, including waiver of corporate attorney-client privilege and work product protection,

5. the existence and adequacy of the corporation's compliance program,

6. the corporation's remedial actions (including, inter alia, discipline or termination of wrongdoers),

7. collateral consequences, such as harm to nonculpable shareholders, pensioners, and employees,

8. the adequacy of prosecution of the" responsible individuals, and

9. the adequacy of civil remedies.

Id. at § II ¶ A. The Thompson Memorandum elucidates the nine factors, and particularly pertinent here is the elucidation of factor 4, describing circumstances relevant to an assessment of the adequacy of a corporation's cooperation with the government investigation. This is worthy of quotation in full:

Another factor to be weighed by the prosecutor [in assessing the adequacy of cooperation] is whether the corporation appears to be protecting its employees and agents. Thus, while cases will differ depending on the circumstances, a corporation's promise of support to culpable employees and agents, either through the advancing of attorney's fees, through retaining employees without sanction for their misconduct, or through providing information to the employees about the government's investigation pursuant to a joint defense agreement, may be considered by the prosecutor in weighing the extent and value of a corporation's cooperation.

Id. at § VI ¶ B. A footnote adds, "[s]ome states require [organizations] to pay the legal fees of officers under investigation prior to a formal determination of guilt. Obviously, a[n organization's] compliance with governing law should not be considered a failure to cooperate." Id. at § VI ¶ B n. 4. In short, the Thompson Memorandum suggests that an organization that advances attorneys' fees to an employee the government deems "culpable" is more likely to be prosecuted than a similarly situated organization that does not advance fees, unless the organization is required by law advance fees.

C. The Alleged Interference4

The government conduct in issue here occurred in the 2004-2005 time period, prior to the August 4, 2005 issuance of the superceding indictment naming defendants.5 During this period, the government was actively investigating defendants and AIPAC. Also during this period, defendants were employed by AIPAC — Rosen as AIPAC's Director of Foreign Policy Issues, and Weissman as AIPAC's Senior Middle East Analyst. It was part of defendants' AIPAC duties to meet regularly with government officials of both the United States and Israel. Defendants contend that all the conduct alleged in the indictment was within the scope of their employment with AIPAC and was undertaken for AIPAC's benefit.6

Defendants allege that the government's investigation in 2004-2005 focused on AIPAC as well as defendants. The investigation of AIPAC lasted into early 2005 and involved, inter alia, FBI interviews of numerous AIPAC officers and employees, searches of AIPAC offices, and meetings between prosecutors and AIPAC officials. Defendants retained counsel in August 2004 and have been billed monthly for legal fees since then. When the government's investigation of defendants became public knowledge, AIPAC stated that it would pay for and advance defendants' attorneys fees. It also entered into a joint defense agreement with defendants. An engagement letter endorsed by defendants, AIPAC, and defense counsel was signed September 1, 2004, and allegedly included an agreement that AIPAC would advance fees. The joint defense agreement was signed the same day. For several months thereafter, AIPAC advanced defendants' attorneys' fees. During that period, AIPAC counsel orally assured defense counsel that it would continue to make these advances. This arrangement did not last; it ended in the spring of 2005 when AIPAC terminated defendants' employment, terminated the joint defense agreement, and ceased advancing defendants' legal fees. This occurred, defendants allege, because during meetings between AIPAC and government prosecutors, the prosecutors implicitly or explicitly (i) threatened AIPAC with criminal charges, and/or (ii) threatened further intense scrutiny of AIPAC in the event the government perceived AIPAC's cooperation as unsatisfactory. Alternatively, the government (i) offered AIPAC reduced charges and/or (ii) offered to halt further investigation of AIPAC should AIPAC's cooperation satisfy the government. Importantly, according to defendants, cooperation satisfactory to the government included, inter alia, terminating defendants and ceasing to advance defendants' legal fees.

Specifically, defendants allege that in a December 2004 meeting with AIPAC officials prosecutors stated that the investigation was analogous to one in the "corporate fraud arena," and they criticized AIPAC's leadership for "circling the wagons" by denying wrongdoing. Later, in a February 15, 2005 meeting, prosecutors allegedly stated that satisfactory cooperation from AIPAC could "get AIPAC out from under all of this." Defendants allege these two statements confirm that AIPAC was at least a subject, if not a target, of investigation.7 On March 18 2005, defendants allege that then-U.S. Attorney Paul McNulty and an unnamed Assistant U.S. Attorney told AIPAC counsel that AIPAC needed to fire defendants. The next business day, March 21, 2005, AIPAC fired defendants and terminated the joint defense agreement, but intended to keep this fact secret from the public. Yet, AIPAC did inform the government of the terminations on March 22, 2005. In the words of AIPAC counsel, this action was taken to gain "credibility with the government," i.e., to be able to claim compliance with the Thompson Memorandum.

On learning that defendants had been fired and the joint defense agreement terminated, prosecutors allegedly continued to inquire whether AIPAC was continuing to pay defendants' legal fees. At an April 29, 2005 meeting between AIPAC and the government to resolve the fees...

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