U.S. v. (Under Seal)

• Decision Date: 23 June 1986
• Docket Number: No. 86-5572,86-5572
• Citation: 794 F.2d 920
• Parties: 20 Fed. R. Evid. Serv. 1335 UNITED STATES of America, Plaintiff-Appellee, v. (UNDER SEAL), Defendants-Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 920

794 F.2d 920

20 Fed. R. Evid. Serv. 1335

UNITED STATES of America, Plaintiff-Appellee, v. (UNDER SEAL), Defendants-Appellants.

No. 86-5572.

United States Court of Appeals Fourth Circuit.

Argued June 5, 1986.

Decided June 18, 1986.

Opinion Issued June 23, 1986.

John M. Bray (Cary M. Feldman, Douglas C. McAllister, Schwalb, Donnenfeld, Bray & Silbert, Washington, D.C., on brief), for defendants-appellants.

Theodore Stewart Greenberg, Asst. U.S. Atty., Alexandria, Va., and David B. Smith, Trial Atty., Washington, D.C., (Justin W. Williams, U.S. Atty., Alexandria, Va., on brief), for plaintiff-appellee.

Before WINTER, Chief Judge, and WIDENER and PHILLIPS, Circuit Judges.

HARRISON L. WINTER, Chief Judge:

Petitioners appeal from an order holding them in contempt for refusing to testify and to respond to a subpoena duces tecum before a grand jury, following a statutory grant of use and derivative use immunity. They contend that the Fifth Amendment affords them the privilege not to testify in the United States, because their testimony could be used to incriminate them in a pending prosecution in the Philippines.

The district court denied petitioners' motion to quash their subpoenas on the basis of the Fifth Amendment, granting instead the government's motion that petitioners be shielded from prosecution in this country by use and derivative use immunity. When petitioners persisted in their refusal to comply with the subpoena, the district court adjudged them in contempt and sentenced them to a period of incarceration to end either when they purged themselves of their contempt or when the term of the grand jury expired. In addition, the court entered a restrictive order with respect to the safekeeping and use of transcripts, records and notes of testimony they might give in response to the subpoenas. Finally, the district court stayed the beginning of sentence for thirty days on condition that petitioners not leave or travel outside the United States.

We affirm.

I.

A grand jury in the Eastern District of Virginia was investigating possible corruption in arms contracts with the Philippines when petitioners, Irene Araneta and her husband Gregorio Araneta, III, respectively the daughter and son-in-law of Ferdinand E. Marcos, former President of the Philippines, came to the United States aboard an aircraft of the United States Air Force. ¹ After their arrival in the United States, the Solicitor General of the Philippines filed criminal charges against the Aranetas alleging the crimes of conspiracy and violations of the Anti-Graft and Corrupt Practices Act and Articles 210-221 of the Philippines Penal Code during the period 1966 until their departure on February 26, 1986. Approximately two months after their entry into the United States, the Aranetas, having been served with the grand jury subpoenas, appeared before the district court in connection with their motion to quash and the government's motion, pursuant to 18 U.S.C. Secs. 6002 and 6003, to immunize them. The district court denied their motion, granted the government's motion and ordered them to testify. When they advised the court that they would persist in asserting the Fifth Amendment privilege and refusing to testify, the district court entered the order finding them in contempt, imposing punishment and protecting their testimony when and if given. The order was entered May 20, 1986.

The United States and the Republic of the Philippines have negotiated and entered into an extradition treaty, dated November 27, 1981. The treaty has not, however, received Senate ratification. By its terms, the treaty applies to certain offenses "committed before as well as after the date this Treaty enters into force." An affidavit of the United States Under Secretary of State for Political Affairs, who is responsible for, inter alia, formulating and executing United States foreign policy regarding the Republic of the Philippines, indicates the extreme importance the United States attaches to favorable relations with the Philippines and declares that it is the policy of the United States to strengthen and broaden those relations. Further, the affidavit shows that the United States has, at the request of the government headed by President Corazon Aquino, agreed to supply the government of the Philippines with an inventory and copies of documents held by U.S. Customs officials, obtained from President Marcos and members of his party when they arrived in Honolulu, Hawaii on February 26, 1986. The United States undertakes this obligation in order to assist the Philippine government in determining whether valuables and documents brought to the United States by former President Marcos were taken unlawfully and places a high priority on fulfilling this commitment. Finally, the affidavit recites that the Aquino government has established a presidential commission to seek recovery of property and assets claimed by the Republic of the Philippines and that the affiant "strongly believe[s] that it is in the foreign policy interests of the U.S. government to honor the Philippine Government's request [to assist the chairman of the commission in securing access to the documents being held by Customs] and our commitment to fulfill it at the earliest possible time."

After argument of this appeal, one of the lawyers in this case supplied us with a newspaper account reporting that on June 11, 1986, one week after the argument of this case, the United States and the Philippines entered into an agreement on procedures for mutual legal assistance. The accord commits the two signatories to share evidence in the legal investigations of specific corporations and individuals alleged to have provided kickbacks to obtain military and public works contracts, including a $2.1 billion nuclear power plant project. The two governments have also agreed to assist each other in arranging interviews with potential witnesses and locating additional evidence.

Petitioners and other members of the Marcos party are lawfully present in the United States under advanced parole status pursuant to 8 U.S.C. Sec. 1182(d)(5). ² In essence they are present, but not admitted, and may be returned to the Philippines in the discretion of the Attorney General when he determines that their presence no longer serves the public interest.

II.

The Aranetas were granted statutory use and derivative use immunity pursuant to 18 U.S.C. Secs. 6002 and 6003, and they concede that this satisfactorily replaces their Fifth Amendment privilege against self-incrimination under the laws of the United States. See Zicarelli v. Investigation Commission, 406 U.S. 472, 92 S.Ct. 1670, 32 L.Ed.2d 234 (1972); Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972); Ullman v. United States, 350 U.S. 422, 76 S.Ct. 497, 100 L.Ed. 511 (1956); Brown v. Walker, 161 U.S. 591, 16 S.Ct. 644, 40 L.Ed. 819 (1896). Instead, they argue that their right not to incriminate themselves has extra-territorial effect, i.e., that they have a right to refuse to testify in the United States if their testimony could be used to incriminate them under the laws of a foreign jurisdiction, here the laws of the Republic of the Philippines.

No authority controls our resolution of this issue, but Zicarelli v. Investigation Commission, 406 U.S. 472, 92 S.Ct. 1670, 32 L.Ed.2d 234 (1972) provides the framework for our inquiry. ³ Zicarelli teaches that a court should first determine that the witness confronts a "real and substantial" risk of foreign prosecution before proceeding to consider whether that witness, if fully immunized under domestic law, may assert a Fifth Amendment privilege on that basis. Accordingly, we first address the degree of danger that the Aranetas will be prosecuted in the Philippines.

While we cannot say with absolute certainty that the Aranetas will face foreign prosecution, we must proceed to the constitutional question if petitioners demonstrate a real and substantial danger of prosecution abroad. Here, petitioners have shown an objectively reasonable expectation of prosecution in the Philippines.

Our conclusion draws support from a method of analysis developed by the Second Circuit, which has addressed this question on several recent occasions. In re Grand Jury Proceedings, 748 F.2d 100, 103 (2 Cir.1984); In re Gilboe, 699 F.2d 71, 75 (2 Cir.1983); In re Grand Jury Subpoena of Flanagan, 691 F.2d 116, 121 (2 Cir.1982). The Flanagan court assembled a series of factors to determine whether a witness faces a cognizable danger of prosecution:

Whether there is an existing or potential foreign prosecution of him; what foreign charges could be filed against him; whether prosecution of them would be initiated or furthered by his testimony; whether any such charges would entitle the foreign jurisdiction to have him extradited from the United States; and whether there is a likelihood that his testimony given here would be disclosed to the foreign government.

691 F.2d at 121. Assessing these factors, we are persuaded that petitioners' fear of prosecution is real and substantial, rather than speculative and remote.

We begin by noting that the government of the Philippines has begun a prosecution against the Aranetas on charges congruent with the subjects comprising the grand jury investigation. Petitioners can reasonably expect to be interrogated on these subjects before the grand jury, raising the very real possibility that petitioners' testimony, or the fruits thereof, would prove useful in the pending prosecution. The government does not dispute this.

Essentially, the likelihood of foreign prosecution really depends on the likelihood that the Aranetas will find themselves under the jurisdiction of the Philippine government either voluntarily or otherwise. In their brief, the Aranetas suggest the possibility that they "may voluntarily choose to return to their country at a future date." Even though they may not...