United States v. Manafort

• Decision Date: 26 June 2018
• Docket Number: Criminal Action No. 1:18–cr–83
• Citation: 321 F.Supp.3d 640
• Court: U.S. District Court — Eastern District of Virginia
• Parties: UNITED STATES of America, v. Paul J. MANAFORT, Defendant.

321 F.Supp.3d 640

UNITED STATES of America,

v.Paul J. MANAFORT, Defendant.

Criminal Action No. 1:18–cr–83

United States District Court, E.D. Virginia, Alexandria Division.

Filed June 26, 2018

Andrew A. Weissmann, Adam C. Jed, Brandon Lang Van Grack, Greg D. Andres, Michael R. Dreeben, Scott Andrew Meisler, Uzo Asonye, US Attorney's Office, Alexandria, VA, for United States of America.

Jay Rohit Nanavati, Kostelanetz & Fink LLP, Thomas E. Zehnle, Miller & Chevalier, Chartered, Washington, DC, for Defendant.

MEMORANDUM OPINION

T. S. Ellis, III, United States District JudgeThis multi-count indictment charging defendant with various bank fraud and tax charges was brought by a Special Counsel appointed by the Acting Attorney General to investigate collusion between President Trump's campaign for the presidency and the Russian government in connection with the 2016 Presidential election. At issue is defendant's threshold challenge to the authority of the Special Counsel to pursue the charges in the Superseding Indictment which, on their face, appear unrelated to the 2016 Presidential election.

I.

A.

As a preface to the analysis of defendant's contentions attacking the Superseding Indictment, it is useful to begin with a brief recitation of the recent history of special prosecutors, and then to describe the current provisions governing the appointment of special prosecutors and their investigations. Special prosecutors are not an unfamiliar feature of the American legal landscape; indeed special prosecutors were ubiquitous in the 1980s and 1990s, albeit under a different statutory regime. In the wake of Watergate and the so-called Saturday Night Massacre, Congress enacted the first iteration of the independent counsel statute, the Ethics in Government Act of 1978, Pub. L. No. 95–521, 92 Stat. 1824 (codified at 28 U.S.C. §§ 591 – 598 ) (the 1978 Act). The intended purpose of the 1978 Act was to create a mechanism for the investigation and prosecution of high-ranking government officials. Although originally enacted with a five-year sunset provision, Congress revised and reauthorized the 1978 Act in 1983 and again in 1987. In 1988, the Supreme Court upheld the constitutionality of the 1978 Act despite substantial separation-of-powers challenges. See Morrison v. Olson , 487 U.S. 654, 108 S.Ct. 2597, 101 L.Ed.2d 569 (1988).¹

Congress reauthorized the 1978 Act for the final time in 1994. See Independent Counsel Reauthorization Act of 1994, Pub. L. No. 103–270, 108 Stat. 732 (codified in 28 U.S.C. §§ 591 – 599 ) (the 1994 Reauthorization Act). By its terms, the 1994 Reauthorization Act required the Attorney General to conduct a "preliminary investigation" to determine whether appointment of an independent counsel was necessary if the Attorney General received "information sufficient to constitute grounds to investigate whether" a covered person² has violated federal criminal law. Id. § 591. Once a preliminary investigation was initiated, the statute required the Attorney General to decide within ninety days whether "there are reasonable grounds to believe that further investigation is warranted." Id. §§ 592(c)(1), (a)(1). Finally, in the event the Attorney General concluded that "there are reasonable grounds to believe that further investigation is warranted," then the Attorney General was required by the 1994 Reauthorization Act to apply to the D.C. Circuit for the appointment of an independent counsel. Id. § 592(c)(1). Once that court appointed an independent counsel, the independent counsel would have "full power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department of Justice." Id. § 594(a). After appointment, the independent counsel could be removed by the Attorney General "only for good cause, physical or mental disability

, or any other condition that substantially impairs the performance" of his or her duties. Id. § 596(a)(1).

In 1999, through a bipartisan consensus, Congress agreed to allow the 1994 Reauthorization Act to expire. The lawmakers at that time concluded that the 1994 Reauthorization Act was seriously flawed in several important respects as experience had shown. Indeed, in her testimony before the Senate Committee on Governmental Affairs, then-Attorney General Janet Reno testified that the statute was "structurally flawed" because the independent counsel was unaccountable, "not...confirmed by the Senate, and...not typically subject to the same sort of oversight or budget constraints that the Department [of Justice (DOJ) ] faces[.]" The Future of the Independent Counsel Act: Hearings Before the S. Comm. on Gov't Affairs , 106th Cong. 249 (1999) (statement of Janet Reno, Attorney General). Significantly, former independent counsel Kenneth Starr expressed a similar view, stating that the statute was both "structurally unsound" and "constitutionally dubious." Id. at 425, 433 (statement of Kenneth Starr, former independent counsel). Both Republicans and Democrats had come to the conclusion that in practice the 1994 Reauthorization Act and its predecessors had become more often a political weapon to be unleashed in the ongoing, indeed escalating culture wars, than a tool for ferreting out and prosecuting crimes ostensibly committed by high-ranking government officials.

B.

But the expiration of the 1978 Act did not end the appointment of "independent" counsel to investigate and prosecute crimes allegedly committed by high-level members of the Executive Branch. Later in 1999, the DOJ, acting pursuant to distinct statutory authority,³ promulgated regulations "to replace the procedures set out in the Independent Counsel Reauthorization Act of 1994." Office of Special Counsel , 64 Fed. Reg. 37038, 37038 (July 9, 1999). These regulations were an effort to address criticisms of the 1978 Act by "strik[ing] a balance between independence and accountability" and empowering the Special Counsel to "structure the investigation as he or she wishes and to exercise independent prosecutorial discretion" while maintaining "ultimate responsibility for the matter and how it is handled...with the Attorney General." Id.

These regulations begin by outlining the grounds for appointing a Special Counsel. Specifically, 28 C.F.R. § 600.1 provides that the Attorney General, or where the Attorney General is recused, the Acting Attorney General, may appoint a Special Counsel when he or she determines (i) that "criminal investigation of a person or matter is warranted", (ii) that investigation of that person or matter by existing DOJ components "would present a conflict of interest," and (iii) that it would be "in the public interest to appoint an outside Special Counsel to assume responsibility for the matter." 28 C.F.R. § 600.1. The regulations further require the Attorney General to establish the jurisdiction of the Special Counsel. See id. § 600.4(a). In this regard, the Attorney General must provide the Special Counsel "with a specific factual statement of the matter to be investigated." Id. In addition to this specific factual statement of the matter to be investigated, the regulations make clear that the Special Counsel's jurisdiction also automatically encompasses "the authority to investigate and prosecute federal crimes committed in the course of, and with intent to interfere with, the Special Counsel's investigation" as well as "appeals arising out of the matter being investigated and/or prosecuted." Id.

The regulations also establish a mechanism by which a Special Counsel can acquire additional jurisdiction beyond the jurisdiction originally conferred by the Attorney General in the factual statement.

Specifically, a Special Counsel in the current scheme can consult with the Attorney General in the event the Special Counsel believes that additional jurisdiction is necessary to investigate fully the matters assigned in the original factual statement or to investigate new matters that come to light. In this event, the Attorney General must then determine whether to include the additional matters within the Special Counsel's jurisdiction. See id. § 600.4(b).

Once the Attorney General appoints a Special Counsel, the regulations provide that "the Special Counsel shall exercise, within the scope of his or her jurisdiction, the full power and independent authority to exercise all investigative and prosecutorial functions of any United States Attorney." Id. § 600.6. At the same time, however, the regulations require the Special Counsel to "comply with rules, regulations, procedures, practices, and policies of the [DOJ]." Id. And although it does not appear that the Special Counsel is subject to day-to-day supervision by the Attorney General, the regulations do provide that the Special Counsel is obligated to "notify the Attorney General of events in the course of his or her investigation in conformity with the Departmental guidelines with respect to Urgent Reports,"id. § 600.8(b), and the Attorney General "may request that the Special Counsel provide an explanation for any investigative or prosecutorial step," id. § 600.7(b). If the Attorney General concludes that any action the Special Counsel has taken is "inappropriate or unwarranted under established Departmental practices," the Attorney General can conclude that the action "should not be pursued[.]" Id. § 600.7(b). And in the event of the Special Counsel's "misconduct, dereliction of duty, incapacity, conflict of interest, or for other good cause, including violation of Departmental policies[,]" the Attorney General may remove the Special Counsel. Id. § 600.7(d). Finally, the regulations specify that "[t]he regulations...are not intended to, do not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law or equity, by any person or entity, in any matter, civil, criminal, or administrative." Id. § 600.10.

Some...