The big chill: Negative effects of the McDade Amendment and the conflict between federal statutes

INTRODUCTION

The McDade Amendment,1 which took its name from its chief sponsor in the U.S. House of Representatives,2 was added to the omnibus appropriations measure for fiscal year 1999.3 The McDade Amendment subjects Department of Justice attorneys to the "state laws and rules, and local

federal court rules,4 governing attorneys in each State where such attorney engages in that attorney's duties, to the same extent and in the same manner as other attorneys in that State."5 It has had a deleterious effect on federal criminal prosecutions, and it is no exaggeration to say that this provision is costing lives.

The law review articles that have been written since the passage of the McDade Amendment do not detail the everyday impact of the law, and then omit or understate its real-life implications.6 The articles speculate about the possible results that the Amendment may have. Some commentators have even suggested that the McDade Amendment is the "solution" for uniform application of American Bar Association ("ABA") Model Rule 4.2,7 the "anti-contact rule," which lies at the heart of the Amendment.8 While most commentators agree that the law is problematic,9 these generalities do not fully demonstrate the significant adverse impact that this law is having in slowing down, or bringing to a standstill, federal investigations of serious criminal wrongdoing, nor do they offer remedies other than amending or repealing the McDade Amendment, an attractive but uncertain solution.10

The Department of Justice represents law enforcement authority for the Executive Branch. It operates under federal law, not state law, prosecuting cases in federal courts. As such, prior to the McDade Amendment, Department attorneys were subject only to the ethics rules of their state of licensure (except to the extent that those rules impeded their legitimate law enforcement responsibilities), not of every jurisdiction in which they litigated. Subjecting federal prosecutors to differing state rules creates vertical (local-state-federal)11 and horizontal (state-state)12 conflicts of law that have had serious adverse consequences. The McDade Amendment was supposed to be the answer to the regulation of federal prosecutors, but that task is being pursued at the expense of legitimate law enforcement investigative techniques, practices, and operations by Department attorneys. Although subjecting federal attorneys to state bar rules sounds like a good policy in theory, the McDade Amendment has ceded control of how federal prosecutions are to be conducted to the vagaries of fifty-four bar associations.13 Federal prosecutors are being hamstrung because the McDade Amendment makes them answerable to no fewer than fifty-four masters.

Compelling examples of how the McDade Amendment has frustrated and chilled federal prosecutions have emerged since its passage. This law has resulted in significant delays in important criminal prosecutions, halted the use of federally-authorized investigative techniques, and posed multiple hurdles for federal prosecutors. It has caused uncertainty, delayed investigations, created rifts between agents and prosecutors, prevented attorneys and agents from taking legitimate, traditionally accepted investigative steps to the detriment of pending cases, and served as the basis of litigation to interfere with legitimate federal prosecutions. Complying with the McDade Amendment has created such significant burdens that federal prosecutions of serious crimes have suffered.

This Article provides recent examples of the predicament, most notably in California, Missouri, and Oregon. It also argues that the McDade Amendment presents a conflict between federal statutes, presenting courts with the task of determining whether there is a conflict between the McDade Amendment and other applicable federal laws. That task involves the application of traditional principles of statutory construction. Applying those principles to the current McDade issue, a court can consider whether the McDade Amendment conflicts with other federal laws and, if so, determine how that conflict can be resolved in a manner that permits each law a proper scope. A principled argument can be made that, in certain circumstances, the McDade Amendment defeats the objectives of the entire body of certain laws because application of state bar rules undermines federal policy. Finally, this Article discusses a test case challenge to the McDade Amendment.

I. CALIFORNIA: EUREKA

A. OIL SPILL

California's state motto, Eureka (I Have Found It), was rendered tragically ironic because of what was not found due to the McDade Amendment. On September 27, 1998, after leaving the port of San Francisco, the M/T Command, a Liberian tanker vessel on its way to Panama, dumped thousands of gallons of bunker fuel oil into the Pacific Ocean off the Half Moon Bay coastline.14 The spill killed at least one hundred-seventy sea birds including brown pelicans, an endangered species, and affected two national marine sanctuaries.15 It left clumps of tar along miles of the San Mateo County shore, created a fifteen mile-long oil slick,16 and required over one million dollars in clean-up costs.17

The Coast Guard tracked down the M/T Command off the coast of Guatemala, boarded the ship with the permission of Liberia, and later inspected it in a Panamanian port with the permission of the Panamanian government.18 It was the first time that a ship had ever been intercepted on the high seas for suspicion of violating pollution standards.19 The vessel's lawyers interceded and told the Captain "to instruct the crew of the M/T Command not to discuss the oil spill with any government officials."20

Because of the California ethics rules - and the claim that those rules not only prevent federal prosecutors, but also federal investigative agents, from speaking to corporate employees - the prosecutors directed the Coast Guard not to seek further interviews, thus perpetuating "the subsequent cover-up of the ocean spill."21 Because of the intervention of the corporate lawyers, no eyewitnesses from the crew were developed, none of the crew were ever available to testify, and the United States could develop only a circumstantial case. Although the tanker's corporate owner and the captain eventually pleaded guilty to environmental crimes,22 the investigation and prosecution would have been substantially expedited and perhaps broadened if the Coast Guard had been able to interview the crew.

B. KICKBACKS AND CONTRACT FRAUD

In United States v. Talao,23 the bookkeeper for San Luis Gonzaga Construction, Inc., was subpoenaed to testify before a grand jury on April 30, 1997.24 Her employers were the subjects of a criminal investigation because they were believed to have failed to pay the prevailing wage on federally-funded contracts, falsified payroll records, and demanded illegal kickbacks.25 On the day before her scheduled grand jury appearance, the bookkeeper went to the federal building in search of the prosecutor assigned to the criminal action. Because the prosecutor was not available, the bookkeeper spoke to the prosecutor's immediate supervisor. The bookkeeper asked to have the date of her grand jury appearance changed because she did not want the company's attorney to be present before or during her grand jury testimony, explaining that she would feel pressured to give false testimony.26 The supervisor told the bookkeeper that she would have to testify the following day, but informed her that the company's attorney would not be present during her testimony.27

The next day, when the bookkeeper arrived for her grand jury appearance, she encountered the prosecutor and the case agent in the hallway outside the grand jury room.28 The bookkeeper told them that she did not wish to be represented by the company's attorney. The bookkeeper agreed to discuss the matter further, and, in a brief conversation in a nearby witness room, the bookkeeper told the prosecutor that her employer (the subject of the investigation) had pressed her to lie before the grand jury, that she was afraid of her employer, and that she did not want the company's lawyer to be in the same room as she, or to know what she had said in the grand jury, for fear that the attorney would report everything back to the employer.29

During that interview, the corporate attorney banged on the witness room door and demanded to be present during the interview; additionally, he asserted the right to be present in the grand jury.30 The prosecutor asked the bookkeeper whether she wished to speak to the attorney. She said that she did not.31 Uncertain whether she should continue the interview, the prosecutor sought guidance from her superiors. The chief of the criminal division opined that the company's attorney was wrongfully tampering with a witness and instructed the prosecutor to continue the interview outside the presence of the company's attorney. The grand jury later indicted the employers for conspiracy, false statements, and illegal kickbacks.32

The district judge ruled that the prosecutor violated California's anti-contact rule33 because there was a pre-existing Department of Labor administrative proceeding and qui tam action (the government had not intervened), and, therefore, the corporation had a right to have its attorney present during any interview of any employee, regardless of the employee's wishes, the status of the corporate managers, or the possibility that the attorney might have a conflict of interest in representing the employee.34 The judge referred the federal prosecutor for disciplinary review by the State Bar of California.35

Upon rehearing, the judge held that, although the ethical rule violation was intentional, he would withdraw the referral to the state bar.36 However, the court let stand its ruling that, as a sanction for the conduct, it would instruct the jury at the criminal trial of the corporation and its principals that the government had committed misconduct and that the jury should consider that misconduct in evaluating the credibility of the whistleblower-bookkeeper.37 The government sought a writ of mandamus in respect of the district court's finding of misconduct and its decision to sanction the government by requiring a jury instruction that bore no relation to the underlying misconduct.38 The prosecutor also sought to appeal the district court's misconduct finding.

The mandamus petition was argued in March. Five months later, on August 23, 2000, the Ninth Circuit Court of Appeals held that the prosecutor did not commit an ethical violation and, accordingly, there was no longer any basis for a remedial jury instruction and the petition for mandamus was moot.39 However, the Ninth Circuit's opinion included a historical exposition that discussed the Department of Justice's controversial Thornburgh Memorandum, which underlies the new law, and the curative effect of the McDade Amendment:

During the early part of the decade of the 1990's, intense discussions were had between state judicial authorities and the Department of Justice over a position taken by the DOJ in a written communication popularly referred to as the "Thornburgh Memorandum." In essence, that memorandum created serious problems by excusing federal attorneys from compliance with state ethics rules. The conflict that developed was dissipated when the Congress adopted what is now 28 U.S.C. sec 530B [the McDade Amendment], and made state ethics rules applicable to government attorneys.40

The Ninth Circuit made this sweeping observation even while noting that in the instant case, the defendant's "automatic, uncritical application of [the anti-- contact rule] would effectively defeat its goal of protecting the administration of justice."41

Moreover, the Court also opined that the federal prosecutor "did the right thing" by advising the bookkeeper that she had the right to obtain substitute counsel, and that prosecutors should give that advice in the future.42 It then stated that "we do not mean to suggest that government officials have a license to approach an employee and initiate communications whenever there is a possible conflict of interest between the employee and the corporation for whom the employee works."43 In short, the Ninth Circuit vindicated the federal prosecutor's conduct when an employee approaches the prosecutor or agent. However, it sent the message that investigating agents and federal prosecutors cannot approach employees in situations where corporate counsel has announced that it represents "everyone" (or has a right to be present during interviews).

This reasoning suggests that, for example, if a corporate whistleblower tells an FBI agent that the agent should speak to another particular employee who has important information, the prosecutor would have to forego the interview if the federal prosecutor knows that counsel represents the company in the matter; in essence, agents only are allowed to talk to employees who take the initiative to contact them. This result abandons employees who have been intimidated into keeping quiet. Moreover, it is difficult to judge whether the conflict between an employer and an employee has become defined well enough for a prosecutor to tell the agent that it is permissible to conduct an interview.44

II. MISSOURI: UNITED WE STAND, DIVIDED WE FALL

There is no better illustration of Missouri's motto than the debilitating effect that its unorthodox interpretation of the anti-contact rule is having on law enforcement. Take, for example, a hypothetical situation in which one of the United States Attorney's Offices in Missouri investigates allegations that a large commercial facility violated federal environmental laws, and certain former employees of the facility indicate that they have relevant information and are willing to speak with federal investigators about that information. Notwithstanding the former employees' desire to speak to federal investigators, the well-- publicized position of the Missouri Bar Chief Disciplinary Counsel is that the anti-contact rule covers former employees of a corporate party.45

The Missouri Bar's position runs contrary to federal case law and ABA Formal Opinions holding that the anti-contact rule does not cover former corporate employees. With respect to those court decisions, two federal district court cases from the Eastern District of Missouri have held that the anti-contact rule permits ex parte communication with unrepresented former employees of an opposing party.46 The Eighth Circuit has also held that the anti-contact rule only limits ex parte contact with former employees who are in fact currently represented by corporate counsel.47 Additionally, the ABA Committee on Ethics and Professional Responsibility issued two formal opinions concluding that "Rule 4.2 does not prohibit contacts with former ... employees of a represented corporation, even if they were in one of the categories with which communication was prohibited while they were employed."48

Despite those unambiguous holdings, the Missouri Bar Chief Disciplinary Counsel has issued a letter, published in the Journal of the Missouri Bar, and three informal advisory opinions that take the opposite position.49 The Chief Disciplinary Counsel bases his position on a 1993 Missouri Supreme Court case, State ex. rel. Pitts v. Roberts.50 In Pitts, the court did not expressly address the issue of contact with former employees, but stated that there was no "bright line temporal distinction [in employment status]" in the test defined by Rule 4.2's comment.51 The Chief Disciplinary Counsel, however, reads Pitts as clearly holding that former employees as well as current employees are subject to Missouri's anti-contact rule if they fall within one of the three classes of persons described in the comment to Rule 4.2.(52) Moreover, he has stated that attorneys relying on federal cases for the proposition that Pitts is not controlling of the issue of contact with former employees could face professional discipline.53

The Missouri Bar's peculiar interpretation of Rule 4.2 is clearly contrary to federal law. As a consequence, federal prosecutors may be stymied by a state bar's conclusive interpretation of a debatable state court case from gathering material evidence of a federal crime from willing witnesses. It is therefore noteworthy that several other states also have unusual judicial decisions or bar opinions limiting or prohibiting contact with former employees.54

III. OREGON: SHE FLIES WITH HER OWN WINGS

The federal wiretap statute permits a person "acting under color of law to intercept a wire, oral or electronic communication, where such person is a party to the communication or one of the parties to the communication has given prior consent to such interception."55 Federal wiretap law forms the backdrop for analysis of consensual monitoring. To say that the McDade Amendment overrides that federal statute because it subjects Department attorneys to state ethics rules and local federal district court rules (the latter of which adopt Oregon's state ethics rules as governing attorneys' conduct in federal court in Oregon), would violate the basic principles of federalism. The Tenth Circuit, in ruling on the admissibility of evidence, has held that federal wiretap law prevails over conflicting state eavesdropping regulations.56

Notwithstanding this interpretation, a state bar or a state court may take a different view. The line between what is a substantive, procedural, or evidentiary rule, and what is an ethics rule, is not clear and apparent. While a government attorney may act in good faith after considering and researching the issue, there can be no guarantee that a state authority will not investigate whether the conduct violates rules of professional responsibility. States differ in their views concerning whether bar ethics rules permit attorneys to record (or authorize the recording of) communications with the consent of only one party to the communication.

Oregon has restrictive state substantive laws,57 a troublesome ethics opinion,58 and a controversial disciplinary decision captioned In re Gatti.59 One can make a principled argument that the District of Oregon should not feel constrained to follow state substantive law (including statutes and ethics opinions) on consensual recordings, and should use the federal wiretap statute as authority to approve one-party consensual recordings, but this argument would not be without risk.

In approving an agent's consensual monitoring request, federal prosecutors in Oregon must be mindful of the disciplinary decision In re Gatti. It held that there is no prosecution exception to Oregon's "dishonesty rule," which is based on ABA Model Rule 8.4(c). Rule 8.4(c) states that it is misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. In Oregon, bar disciplinary counsel has interpreted the relevant version of this rule to prohibit attorneys not only from authorizing or conducting consensual recordings, but also from supervising or overseeing undercover investigations or sting operations,60 because the very nature of the undercover operation involves deception. Thus, in Oregon, government attorneys may risk violating the ethics rules when they supervise legitimate criminal and civil law enforcement investigations that use investigative methods recognized by courts as lawful.61 Until recently, Virginia had the same proscription.62

The United States filed an amicus curiae brief, joined by the Oregon State Attorney General, asking the Oregon Supreme Court to reject the Gatti opinion and recognize a prosecutorial exception to the dishonesty rule for undercover investigations. On August 17, 2000, the Oregon Supreme Court refused to do so.63 It reasoned that "[f]aithful adherence to the wording of [the dishonesty rule and statute], and this court's case law does not permit recognition of an exception for any lawyer to engage in dishonesty, fraud, deceit, misrepresentation, or false statements."64 It goes on to state that any exception to the rules must be created not by judicial decree, but rather by amending the Code of Professional Responsibility.65 In light of this ruling, federal prosecutors may not direct or supervise the undercover activities of an agent, leaving agents without legal guidance in making constitutional decisions.

An argument can be made that Gatti is not implicated in investigations involving a cooperating witness who has previously been involved in the criminal activity under investigation and who agrees to secretly record his conversation with a co-conspirator. The cooperating witness is not concealing his identity or engaging in conduct that amounts to dishonesty, fraud, deceit, or misrepresentation.66 That would not be the case with an agent acting in an undercover capacity because his whole persona is a fiction. This may be too fine a distinction, but it is supported by the facts of In re Gatti, which involved an attorney concealing his identity.

Meanwhile, numerous undercover investigations in Oregon "have ground to a halt,"67 with the result that individuals and groups involved in illegal activity have been allowed to remain at large:

The United States Attorney's Office ("USAO") has ceased giving advice and direction with respect to undercover investigations so as to avoid running afoul of the Oregon rules as interpreted in Gatti .... [T]he FBI has been forced to suspend a child pornography investigation developed by undercover agents, and has been precluded from utilizing cooperating witnesses to pursue at least two major drug investigations, three extortion cases, and a major white collar crime investigation .... DEA investigations of major drug trafficking organizations have been hampered and delayed and have not resulted in prosecutions, even though several major cases deserving prosecution have arisen. The DEA has also been barred from conducting electronic surveillance on important targets in two separate cases originating in other districts but involving illegal drug activities in Oregon.68

The chilling effect reaches beyond just these cases. Civil matters are being affected, too. For example, without risking disciplinary sanctions, the United States Attorney's Office cannot oversee or provide advice regarding the "testing" of discriminatory housing or banking practices in Oregon, even though such testing may be initiated in response to a valid complaint, and even though the Supreme Court has approved of testing as an effective means of discovering discrimination.69 Moreover, the Office is largely prevented from prosecuting qui tam actions pursuant to the "whistleblower" provisions of the False Claims Act. Such actions comprise a major portion of the Office's health care fraud cases and all of its defense procurement fraud cases. Nevertheless, since these actions are frequently initiated by whistleblowers who covertly gather information about government contractors suspected of fraud, they may involve deceptive conduct prohibited by Oregon's ethics rules.

While circumstances that present an imminent danger to human life might cause - and certainly should justify - prosecutorial supervision of undercover investigative activity, the range of cases that could and legitimately should be investigated through undercover means is wide-ranging - narcotics, violent crime, fraud, counterfeiting, arson, arms smuggling, organized crime - to name just a few. One must ask whether it is beneficial to the public, or consonant with the goal of ensuring ethical prosecutorial behavior, to allow such crimes to go undetected and unpunished.

Attorneys for the government who are licensed and/or practicing in Oregon were hoping that the Gatti decision would be overturned through a new ethics rule this year. Following the cue of the Oregon Supreme Court, the Oregon State Bar House of Delegates held a special session on January 19, 2001, to consider a proposed amendment to its rules in light of Gatti. The House of Delegates voted 103 to 47 to amend the dishonesty rule to permit lawyers to advise and supervise others engaged in covert activity. Before the amended disciplinary rule was to be effective, the Oregon Supreme Court needed to adopt it. On April 11, 2001, the Oregon Supreme Court declined to adopt the proposed amendment by a 5 to 0 vote.

On May 23, 2001, the Department of Justice sued the Oregon State Bar in federal court,'o seeking declaratory and injunctive relief that would preclude the Bar from enforcing the dishonesty rule against federal attorneys admitted to practice in Oregon for otherwise lawful activities relating to their official duties.

IV. CONFLICTING FEDERAL STATUTES

A. PRINCIPLES OF STATUTORY CONSTRUCTION

The McDade Amendment directs us to look to state law and federal district court rules, arguably even if their application would undermine federal policy. In this regard, the McDade Amendment presents a potential conflict between federal statutes.71 Under those circumstances, the court's task is to determine whether there is a conflict between the McDade Amendment and other applicable federal law. This task, however, involves the application of traditional principles of statutory construction, one of the most fundamental of which is that the courts must give effect to each federal law. Each federal law has equal standing, and equal claim for recognition.

The seminal case of United States v. Borden72 holds that "[i]t is a cardinal principle of construction that ... [w]hen there are two acts upon the same subject, the rule is to give effect to both if possible."73 When a federal law conflicts with some other federal statute, the Court is fond of reciting that repeal of the original law is not favored and is to be implied "only if necessary" to make the conflicting federal statute work, and then only to the minimum extent necessary.74 This axiom should be applied in respect of the McDade Amendment because implied repeal, as a canon of statutory construction, should be used sparingly. Moreover, unless Congress clearly indicates which of two federal statutes is to prevail in the event of a conflict, and it does not say in the McDade Amendment which law must yield, a court's responsibility is to interpret and apply them "in a way that preserves the purposes of both and fosters harmony between them."75

In another notable case, Vornado Air Circulation Systems, Inc. v. Duracraft Corp.,76 the Tenth Circuit confronted the intersection of the United States Patent Act and the Lanham Trademark Act and, in reconciling the two federal statutes, went even further than the Borden Court. In that case of first impression, the Tenth Circuit implied through its holding in Vornado that not only can there be a hierarchy among federal statutes, but that one federal statute may preempt another federal statute. In Vornado, the Tenth Circuit held that a product configuration, which may be protected under the Lanham Act77 as a trade dress, will be prevented from attaining federal trademark protection by the Patent Act where the product is a significant inventive aspect of a utility patented invention. The argument advanced in this Article does not require the more expansive Vornado reading, which would dictate that the McDade Amendment be held invalid upon a showing that the goals of another totally separate and distinct federal statute may be affected. It is sufficient for our purposes to apply the principles laid out in Borden.

The reference in the McDade Amendment to "State laws or rules ... governing attorneys" must be construed narrowly when there is a conflict with other federal law in order to avoid absurd and arbitrary results and an undermining of federal policy. If the McDade Amendment were read broadly to include state substantive, procedural, and/or evidentiary rules (as opposed to ethics rules), the rules applicable to a given case might be altered simply depending on the involvement of an "attorney for the Government." For example, the rules of procedure applicable in a civil case to enforce the Americans with Disabilities Act78 could vary depending on whether the action is brought by the government or by a private individual. Similarly, the rules of evidence applicable in a qui tam action under the False Claims Act79 might vary depending on whether the government chooses to intervene.

Applying the Borden principles to some of the conflicts posed by the McDade Amendment, a court can consider whether the McDade Amendment conflicts with a preexisting federal law and, if so, determine how that conflict can be resolved in a manner that permits each law a proper scope. One can legitimately argue that, in certain circumstances, the McDade Amendment defeats the objectives of the earlier federal law because application of certain state bar or local court rules undermines federal policy. For example, the Oregon Supreme Court's interpretation of the dishonesty rule to prohibit undercover activities defeats the objectives of the federal wiretap statute,80 which was a legislative attempt to strike a balance between the need to protect persons from unwarranted electronic surveillance and the need for law enforcement tools necessary in the fight against organized crime. Another example is where a local district court rule requiring federal prosecutors to be duly licensed to practice law in that jurisdiction81 defeats the objectives of a number of statutes that permit the Attorney General to send Department of Justice attorneys into any court in the country regardless of where they are licensed.82

These arguments could be made to either Congress or to the courts. Congress could direct that state bar rules be applied only if they do not undermine federal policy objectives. The onus would then be on the Department of Justice to explain to the courts why the federal law would be harmed by application of state bar rules. However, the passage of a meaningful legislative fix is uncertain at this writing.

B. A TEST CASE

In the absence of legislative change, another possibility is that a federal prosecutor could challenge the McDade Amendment in litigation. While hopefully it would never come to that, a prosecutor could involuntarily find him or herself in the unpleasant situation of facing sanctions or disciplinary action, based on an alleged violation of the McDade Amendment, from a judge or disciplinary bar committee, thus being forced to challenge the statute.

First and foremost, the test subject would have to be the rare Department attorney83 whose license is, or who would be willing for his or her license to be, at risk. No federal prosecutor wants to be the poster child for the McDade Amendment. This unlikely condition contains the core of the McDade problem, which is that it applies or operates in personam - that is, it places at risk or punishes the Department of Justice attorney who is simply doing his or her job in furtherance of the public interest as spelled out in other federal criminal and civil statutes. In those statutes, there is no person - there is only the abstract noun, the United States or the government. Any effort by a court to balance governmental interests is necessarily done on the back of the individual Department attorney attempting to press the government's interests.84

The idea of a test case is further complicated by the fact that the Federal Programs Branch of the Department's Civil Division is tasked with defending suits challenging Congressional acts, which normally would include defending challenges to the McDade Amendment. As a matter of practice, the Department typically defends a federal statute "whenever a reasonable argument can be made in its support."85 The Department generally refuses to defend an act of Congress in only two rare circumstances: (1) if "prior precedent overwhelmingly indicates that the statute is invalid;:86 or (2) if the statute infringes on the constitutional authority of the executive branch itself.87

Department attorneys representing individual defendants must always be sensitive to the distinction between the interests of the United States and those of the individual and the possibility that those interests may conflict. Representation only is appropriate when "in the interest of the United States."88 At times, there may be cases where it is not in the interest of the United States to make an argument on behalf of an individual defendant. A test case would likely present such a conflict. The government's overriding interest might prevent a Department attorney from "making all arguments necessary to the adequate defense of the [individual]"89 because his or her defense would require the Department attorney to urge a legal position contrary to that which would be urged by the United States.90

V. CONCLUSION

Inimical results from the constraints imposed by the McDade Amendment continue. A U.S. Attorney's Office is conducting a white collar fraud investigation. An indictment was returned against certain participants on charges related to a scam last decade involving a multi-million dollar investment by an organization.91 One of the defendants obtained an attorney and was arraigned on the original charge at that time.92 A superseding indictment was later returned on other charges in connection with the defendant's work for the organization.93

On the date of the arraignment on the superseding indictment, the AUSA assigned to the case received a handwritten envelope in the mail containing a communication of some type from the defendant.94 The AUSA had actual knowledge that the defendant was represented on the charges in the superseding indictment.95 Because of the concern that simply opening the letter and reading its contents might constitute a "contact" with a represented person, the AUSA decided to raise the issue with the Magistrate Judge in camera the next day.96 When the AUSA did so, the Magistrate Judge called in the defense attorney and, in his presence, opened the envelope. It contained a suicide note.97 The defendant had already killed himself.98

There is no way of conclusively determining whether the outcome would have been different absent the McDade Amendment, but what is known is that the McDade Amendment has made federal prosecutors justifiably concerned that a violation of the Model Rules of Professional Conduct, especially the anti-contact rule, may put their license to practice law at risk, or at least make them the target of onerous disciplinary proceedings with the attendant stress, time constraints, financial costs, and professional ramifications. This inhibiting effect has resulted in undue hesitancy and delay at the expense of federal law enforcement efforts. One might want to characterize the case examples in this Article as isolated incidents, unlikely to be repeated, but the reality is that they are part of a growing collection of cases illustrating the damaging effects of the McDade Amendment.

The cases in this Article are admittedly dramatic examples, but each day federal prosecutors and agents make decisions not to conduct interviews in many small and large cases because of the potential consequences of the McDade Amendment. If the sanction for violating the McDade Amendment were suppression of evidence, federal prosecutors would likely be more willing to litigate the issues, but federal prosecutors are generally very reluctant to be investigated by bar associations composed of defense attorneys or by the Department's Office of Professional Responsibility for alleged misconduct, and so are overly cautious in their approaches to investigations.99 The single most effective way to obtain evidence against a corporation is to conduct interviews of employees during the execution of a search warrant. That tool has been eliminated in many cases because of the McDade Amendment. Federal prosecutors routinely tell agents not to speak to employees.

The McDade Amendment is not the answer to rogue prosecutors and government overreaching. While subjecting federal attorneys to state bar rules seems harmless in theory, the practical consequences of that restraint are that federal prosecutions are severely delayed, or abandoned, at an undeniable and unquantifiable cost to the very health, safety, and lives that our laws are designed to protect.

When Congress has not clearly indicated which of two federal laws should prevail when they conflict, a court must interpret the two federal statutes in a way that preserves the purposes of both and fosters harmony between them. Although Congress left it to the courts to continue interpreting the McDade Amendment, Congress did not clearly indicate that the amendment should prevail over the federal laws already in existence or include explicit legislative language for the opposite case. Therefore, the McDade Amendment and federal laws that are affected should, where possible, be construed to preserve the basic purposes of both.

FOOTNOTE

1. The McDade Amendment is also known as the Ethical Standards for Federal Prosecutors Act, and the Citizen's Protection Act, codified at 28 U.S.C. 530B (2000) [hereinafter McDade Amendment].

2. The sponsor of the law was U.S. Rep. Joseph M. McDade of Pennsylvania who retired from the House of Representatives in 1999. McDade had been the target of a federal investigation into allegations that he accepted $100,000 in gifts and other items from defense contractors and lobbyists, at least one of whom pleaded guilty. Acquitted by a jury after a 1996 trial, McDade maintained he was the victim of an investigation run amok, damaged personally and politically by prosecutorial intimidation and recklessness. See generally Emilie Lounsberry, So-Called "McDade Law" Turns Tables on Prosecutors, PHILA. INQUIRER, July 30, 2000. The lobbyist who pled guilty to giving illegal gratuities to Rep. McDade was Raymond S. Wittig, a former aide to Rep. McDade and a lobbyist at the time of his indictment. He pled guilty in 1990 and cooperated with the government's investigation. See United States v. McDade, 1992 WL 151314 (E.D. Pa.).

3. Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999, Pub. L. No. 105-277, 112 Stat. 2681 (1998).

4. Many federal district courts adopt by local court rule the rules of professional conduct of the state in which they sit.

FOOTNOTE

5. McDade Amendment, supra note 1, 530B.

6. See Note, Federal Prosecutors, State Ethics Regulations, and the McDade Amendment, 113 HARv. L. REv. 2080 (2000) (evaluating the McDade Amendment's impact on federal prosecutors, specifically with respect to ABA Model Rules 3.3(d), 3.8 and 4.2, and arguing that the Amendment will unduly hinder federal law enforcement); Fred C. Zacharias & Bruce A. Green, The Uniqueness of Federal Prosecutors, 88 GEo. L.J. 207

FOOTNOTE

(2000) (describing the history of the McDade Amendment, its possible practical implications, its jurisdictional issues, and why federal prosecutors are unique in relation to state prosecutors and private lawyers); Neil Salon, Note, Prosecutors and Model Rule 4.2: An Examination of Appropriate Remedies, 12 GEO. J. LEGAL ETHICS 393 (1999) (arguing that, absent the implication of a defendant's substantive rights, violation of Model Rule 4.2 should not be enough for a court to grant a substantive remedy affecting a defendant's case).

7. The sharpest controversy concerning ethics rules and federal prosecutors has surrounded the application of ABA Model Rule 4.2 and its predecessor, Model Code Disciplinary Rule 7-104, to pre-indictment contacts. Rule 4.2 is entitled "Communication with Person Represented by Counsel." It states: "In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so." MODEL RULES OF PROFESSIONAL CONDUCT Rule 4.2 (2000) [hereinafter MODEL RULES]. The McDade Amendment was intended to result in abrogation of the Department's effort, begun in the "Thornburgh Memorandum," to exempt its attorneys from state bar regulation concerning contacts with represented persons. See Memorandum from Richard Thornburgh, Attorney General, to All Justice Department Litigators (June 8, 1989).

FOOTNOTE

8. Sapna K. Khatiwala, Note, Toward Uniform Application of the "No-Contact" Rule: McDade is the Solution, 13 GEO. J. LEGAL ETHics 111 (1999) (arguing that the McDade legislation is the best solution to the problem of prosecutorial misconduct); Jennifer Marie Buettner, Compromising Professionalism: The Justice Department's Anti-Contact Rule, 23 J. LEGAL PROF. 121 (1999) (arguing that the McDade Amendment is a step toward repairing the chip the Justice Department's Thornburgh Memorandum made in the profession's commitment to fair and uniform conduct demanded of its professionals).

9. See Caroline Heck Miller, Knowing the Dancer from the Dance: When the Prosecutor is Punished for the Government's Conduct, 29 STETSON L. REv. 69 (1999) for a cogent and compelling argument that, with respect to the McDade Amendment, prosecutors are entitled to clarity in the ethical standards that they face; John H. Lim, The Side Effects of a Legal Ethics Panacea: Revealing a United States' Standing Committee's Proposal to "Standardize" Ethics Rules in the Federal Courts as an Attempt to Undermine the No-Contact Rule, 13 GEO. J. LEGAL ETHICS 547, 571 (2000) (proposing a committee to help guide federal prosecutors in "comprehend[ing] and reconcil[ing] the confusing variations within state laws and local rules"). See also Michael S. Sundermeyer & Richard M. Cooper, Unanswered Questions About the McDade Amendment, Bus. CaNEs BuLL., Jan. 1999, at 1.

10. During the past two years, Congress has considered several legislative proposals to repeal or modify the McDade Amendment, the foremost of which has been S. 855, the Professional Standards for Government Attorneys Act, introduced by Senator Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee. It stalled in the Senate during the 106th Congress. S. 855, 106th Cong. (1999).

FOOTNOTE

11. See discussion on Missouri, infra.

12. Recently, state bar rules have expanded into areas that are more the province of courts and legislatures, such as rules governing the investigative steps prosecutors are permitted to take, what evidence must be presented to grand juries, and what procedures must be followed to subpoena non-privileged information from attorneys. For example, in Alaska, Massachusetts, Pennsylvania, Rhode Island, and Tennessee, ABA Model Rule 3.8(f) has been expanded beyond the Model Rule to include a requirement for judicial pre-clearance for issuance of a subpoena to an attorney.

13. This number includes the fifty states and Washington, D.C., Puerto Rico, Guam, and the Virgin Islands.

FOOTNOTE

14. See Consent Decree in United States v. Pearl Shipping Corp. et aL, Civil Action No. 99-CV-4359 (MHP) (N.D. Cal.) [hereinafter Consent Decree]. See also United States Attorney's Office for the Northern District of California Press Release, Sept. 27, 1999 [hereinafter Press Release].

15. Press Release, supra note 14, at 1.

16. Consent Decree, supra note 14, at C. 17. Press Release, supra note 14, at 1.

18. Id. 19. Id.

FOOTNOTE

20. See Plea Agreement (Georgantas) at 41 6(k) in United States v. Anax International Agencies, No. CR98-000384 (MHP) (N.D. Cal.) [hereinafter Georgantas Plea Agreement].

21. See Plea Agreement (Anax International Agencies, Inc.) at 15(a), in United States v. Anax International Agencies, No. CR98-000384 (MBP) (N.D. Cal.).

22. Id; see also Georgantas Plea Agreement, supra note 20.

FOOTNOTE

23. United States v. Talao, CR-98-217-VQR (N.D. Ca. June 17, 1999 [hereinafter Talao].

24. Id. at 3.

25. Id. at 2.

26. Id. at 4.

FOOTNOTE

27. Attorneys are not permitted to accompany witnesses before a federal grand jury. Sixteen states have adopted statutory provisions allowing for counsel to appear with a witness in the state grand jury: Colorado, Connecticut, Florida, Idaho, Illinois, Louisiana, Massachusetts, Michigan, Nebraska, New York, Oklahoma, Pennsylvania, Virginia, Washington, Wisconsin, and Utah.

28. See Talao, CR-98-0217-VQR, at 4. 29. See id.

30. See id.

31. See id. at 4-5.

FOOTNOTE

31. Id at 5.

FOOTNOTE

33. California Rule 2-100 provides: "While representing a client, a member shall not communicate directly or indirectly about the subject of the representation with a party the member knows to be represented by another lawyer in the matter, unless the member has the consent of the other lawyer." CAL. R. PROF'L CONDUCT R. 2-100(A) (1995). Notwithstanding this provision, however, "[c]ommunications otherwise authorized by law" are permitted. Id. at 2-100(C)(3). This is substantially similar to Model Rule 4.2, supra note 7.

34. United States v. Talao, CR-98-0217-VQR, at 13-14 (N.D. Ca. June 17, 1999).

35. United States v. Talao, 1998 WL 1114043 (N.D. Cal. Aug. 14, 1998) (NO. CR-97-0217-VRW), vacated in part by United States v. Talao, 1998 WL 1114044 (N.D. Cal. Oct. 1, 1998) (No. CR-97-0217-VRW) [hereinafter Talao III

36. United States v. Talao, 1998 WL 1114044 (N.D. Cal. Oct. 1, 1998) (NO. CR-97-0217-VRW). 37. Talao II, supra note 35, at *9.

38. See Petition for a Writ of Mandamus, United States v. U.S. District Court for the Northern District of California, et al. (No. 99- 10351) (9th Cir. 1999).

39. United States et al. v. Talao, 2000 WL 1191055 (9th Cir. 2000).

FOOTNOTE

40. Id. at *7.

41. Id.

42. Id. at *10.

43. Id.

FOOTNOTE

44. If the agent conducts the interview, is he required (as the government's agent) to tell the employee (as it now appears that the agent is required to do) that the employee may want to retain counsel? The opinion leaves these issues open. Thanks to David Shapiro for the insights in the above two paragraphs.

FOOTNOTE

45. Editorial, The Bar Speaks, Mo. B. J., at 162 (May-June 1998).

46. See Tipton v. Sonitrol Sec. Sys., Inc., 958 F. Supp. 447, 451 (E.D. Mo. 1996) (holding that "[t]he language of Rule 4.2 does not on its face involve, or in any way prohibit, ex parte contact with former managerial employees"); Equal Employment Opportunity Comm'n v. General Motors Corp., 1998 WL 469890, *2 (E.D. Mo. 1998) joining a clear majority of courts that have interpreted Rule 4.2 not to apply to communications with former employees of an organizational party who no longer have any relationship with the organization).

FOOTNOTE

47. United States ex. rel. O'Keefe v. McDonnell Douglas Corp., 961 F. Supp. 1288, 1295 (E.D. Mo. 1997), aff'd, 132 F.3d 1252 (8th Cir. 1998).

48. ABA Comm. on Ethics and Prof. Resp., Formal Op. 95-396, at 22 n.47 (1995) (discussing ABA Formal Op. 91-359 (1991)).

49. See supra note 45. See also Mo. Informal Advisory Op. 950105 ("The critical issue is the nature of the witness' employment at the time of the incident, not the witness' present employment"); Op. 970163 ("Attorney may not make ex parte contact with current or former management employees"); and Op. 970214 and 970163 (A former employee may not be interviewed ex parte if, at the time of the events at issue, his statement could have constituted an admission of the organization, or if his acts or omissions could be imputed to the organization).

50. State v. Roberts, 857 S.W.2d 200 (Mo. 1993) (en banc).

FOOTNOTE

St. Id. i,at NEVI:202.

52. See supra note 45.

53. Id.

FOOTNOTE

54. See, e.g., Camden v. State, 910 F. Supp. 1115 (D. Md. 1996). 55. 18 U.S.C. 2511(2)(c) (2000).

56. United States v. McNulty, 729 E2d 1243 (10th Cir. 1984). See also United States v. Lowery, 166 F.3d 1119, 1125 (1I th Cir. 1999) (in promulgating the McDade Amendment Congress did not intend to turn over to states the authority to determine what evidence was admissible in federal court); United States v. Hall, 543 F.2d 1229, 1234-35 (9th Cir. 1976) (discussing the relationship between federal and state wiretapping laws and the admissibility of evidence in a federal case).

FOOTNOTE

57. OR. REV. STAT. secs 133.724, 165.540 (1999).

58. Or. State Bar Ass'n Bd. of Governors, Formal Op. 1999-156 (1999).

59. In re Gatti, 8 P.3d 966 (Or. 2000).

FOOTNOTE

60. Id. As used in this Article, an undercover operation or investigation is any investigation by a law enforcement agency in which an employee of the agency, or someone acting at the agency's direction, conceals from other persons his or her relationship with the agency.

61. The Supreme Court has upheld the government's use of covert law enforcement tactics for over a century, and the Ninth Circuit, which covers Oregon, has approved the use of such tactics by the government for law enforcement purposes. See United States v. Aguilar, 883 F.2d 662, 705 (9th. Cir. 1989).

62. In response to a request from U.S. Attorney Helen Fahey and U.S. Magistrate Judge Dennis Dohnal for an informal advisory opinion, on April 13, 2000, the Virginia State Bar issued Legal Ethics Opinion 1738 on consensual monitoring, which concludes that its prior opinions that consensual monitoring "is conduct involving dishonesty, fraud, [or] deceit," see Gunter v. Virginia State Bar, 385 S.E.2d 597 (Va. 1989), sweep too broadly, and creates a law enforcement exception for attorneys and their agents.

63. In re Gatti, supra note 59 (deciding that prosecutors who participated in undercover work were not protected by a law enforcement exception).

FOOTNOTE

64. Id. at 976 (emphasis in original). 65. Id

FOOTNOTE

66. One of law enforcement's longstanding weapons against crime has been enlisting cooperating witnesses to communicate with, and sometimes to record face-to-face or telephonic conversations with, the subjects of investigations. The Supreme Court, recognizing that a criminal assumes the risk that his trust in his confederate may be misplaced, has upheld this technique. See Hoffa v. United States, 385 U.S. 293 (1966).

67. United States v. Oregon State Bar, Civ. No. 01-6168-HO, at 28 (D. Or. 2001). 68. Id. at In 26-27.

FOOTNOTE

69. See 42 U.S.C. 3613 (authorizing the Attorney General to bring civil actions for violations of the Fair Housing Act of 1968).

70. See supra note 67.

71. This conflict is apart from the conflict between the McDade Amendment and policies or practices found lawful by way of Supreme Court decisions, such as the use of informants and undercover techniques.

FOOTNOTE

72. United States v. Borden, 308 U.S. 188 (1939). See also General Motors Acceptance Corp. v. United States, 286 U.S. 49, 61-62 (1932).

73. Borden, 308 U.S. at 198.

74. Id. See also Silver v. New York Stock Exch., 373 U.S. 341 (1963); Georgia v. Pennsylvania R.R. Co., 324 U.S. 439, 457 (1945); United States v. Philadelphia Nat'l Bank, 374 U.S. 321, 350-51 (1963); Gordon v. New York Stock Exch., 422 U.S. 659, 682 (1975).

75. Vornado Air Circulation Sys., Inc. v. Duracraft Corp., 58 F.3d 1498, 1507 (10th Cir. 1995). 76. Id.

FOOTNOTE

77. The Lanham Act, 15 U.S.C. secs 1051-1127 (1946), amended by the Trademark Law Revision Act of 1988, H.R. Rep. No. 100-115, 100th Cong., 2d Sess. 5-7, reprinted in 1988 U.S.C.C.A.N. 5577, 5581-83.

FOOTNOTE

78. 42 U.S.C. 12101 et seq. 79. 31 U.S.C. 3729 et seq.

FOOTNOTE

80. 18 U.S.C. 2511. See also United States v. Adams, 694 F.2d 200, 201 (9th Cir. 1982), cent. denied, 462 U.S. 1118 (1983) (evidence obtained from consensual wiretap conforming to federal law is admissible in federal court proceedings without regard to state law).

81. See, e.g., N.D. GA. CT. R. 83.1(A)(3) ("Attorneys representing the United States government or any agency thereof who reside within this district are required to be admitted to this court's bar before they shall be permitted to practice before this court."); see also United States v. Straub, Criminal No. 5:99-CR-10 (N.D.W.Va. June 14, 1999). The criminal defendant argued that, under the McDade Amendment, the federal prosecutor would no longer be eligible to prosecute the case because the federal prosecutor was not a member of the West Virginia State Bar as required by a local district court rule. The district court issued an opinion disqualifying the federal prosecutor for that reason. On appeal, the Fourth Circuit issued an Order that the matter was moot because the federal prosecutor had since been admitted to the West Virginia Bar. The district court's order was vacated. United States v. Straub, No. 99-4509 (4th Cir. filed July 11, 2000).

82. See 28 U.S.C. 509, 510, 510,515(a), 516, 517, 519,533, 547 (2000). Interpreting the McDade Amendment to require Department attorneys to be members of more than one bar is inconsistent with all of these statutory provisions, and there is no merit to an argument that it was designed or intended to supersede those statutory provisions.

FOOTNOTE

83. The test subject would necessarily be a Department attorney because only Department of Justice attorneys are subject to the strictures of the McDade Amendment. The McDade Amendment incorporates by reference 28 C.F.R. 77.2 (2000), which defines "attorney for the government" as: "the Attorney General; the Deputy Attorney General; the Solicitor General; the Assistant Attorneys General for, and any attorney employed in, the Antitrust Division, Civil Division, Civil Rights Division, Criminal Division, Environment and Natural Resources Division, or Tax Division; the Chief Counsel of the DEA and any attorney employed in that office; the General Counsel of the FBI and any attorney employed in that office or in the Legal Counsel Division [now called the Office of General Counsel] of the FBI; any attorney employed in, or head of, any other legal office in a Department of Justice agency; any United States Attorney; any Assistant United States Attorney; any Special Assistant to the Attorney General or Special Attorney duly appointed pursuant to 28 U.S.C. 515; any Special Assistant United States Attorney duly appointed pursuant to 28 U.S.C. 543 who is authorized to conduct criminal or civil law enforcement investigations or proceedings on behalf of the United States; and any other attorney employed by the Department of Justice who is authorized to conduct criminal or civil law enforcement proceedings on behalf of the United States." For purposes of this Article, the phrase "Department attorneys" will be used to designate all attorneys covered by the provisions of the McDade Amendment.

84. This is problematic as a matter of public policy, as is the decision in Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971), which allowed federal officials to be sued in their personal capacity.

FOOTNOTE

85. The Attorney General's Duty to Defend the Constitutionality of Statutes, 5 Op. Off. Legal Counsel 25, 25-26 (1981).

86. Id. at 25.

FOOTNOTE

87. Id. See also Mark B. Stern & Alisa B. Klein, The Government's Litigator: Taking Clients Seriously, 52 ADna. L. REv. 1409,1417 (2000).

88. 28 C.F.R. 50.15(a) (2000).

FOOTNOTE

89. id. at 50.15(a)(8)(v). In the second situation, the Department attorney is precluded from taking a position (or an appeal) that "is not necessary to the adequate representation of the employee." Id. at

50.15(a)(11)(i). Representation can continue only "if the employee knowingly agrees to forego appeal or to waive the assertion of that position." Id. If not, representation must be terminated. Id. at 50.15(a)(11)(ii).

90. The federal prosecutor may hire private counsel to raise arguments that the Department attorney cannot make. In some cases, where conflicts in the legal positions of a defendant and the United States make representation by a Department attorney inappropriate, the Assistant Attorney General or his designee may authorize the retention of private counsel at government expense. 28 CER. 50.16 (2000). However, private counsel at federal expense is subject to the availability of funds and may be retained only where the criteria for representation have been satisfied. See 28 C.F.R. 50.15(a) (2000).

91. Former Union Leader Found Dead, AP WIREs, Aug. 9, 2000.

FOOTNOTE

92. Id.

FOOTNOTE

93. Former Unity House Official Indicted on Forgery Charges, AP WIRES, Aug. 11, 2000. 94. See Figure in Unity House Case Apparent Suicide Victim, AP WIRES, Aug. 9, 2000. 95. Id.

FOOTNOTE

96. See id.

97. Id.

98. Id.

FOOTNOTE

99. In fact, the Department has always been concerned with ethics and had many layers of mechanisms and safeguards in place before the passage of the McDade Amendment, including but not limited to Deputy Ethics Officers in every component, the Office of Professional Responsibility, the guidelines in the U.S. Attorney's Manual, the Standards of Ethical Conduct for Employees of the Executive Branch, 5 C.F.R. pt 2635 (1993), conflict of interest laws, 18 U.S.C. 201-09, procurement integrity restrictions, 41 U.S.C. 423 (2001),

FOOTNOTE

regulatory code of conduct, Exec. Order No. 12674 (1989), modified by Exec. Order No. 12731 (1990), and the Ethics in Government Act of 1978, Pub. L. No. 95-521 (1978), which created the Office of Government Ethics within the Office of Personnel Management.

AUTHOR_AFFILIATION

JESSELYN ALICIA RADACK*

AUTHOR_AFFILIATION

* A.B., Brown University, 1992; J.D., Yale Law School, 1995. The Author is a lawyer for the federal government. The views expressed in this Article are those of the Author and do not necessarily reflect the views of the Department of Justice or the United States. Many individuals have read, discussed, and criticized various parts of this Article and, while mentioning all of them would be impossible, their help is appreciated deeply. This Article is dedicated to Dan Radack, for his unfailing encouragement and unwavering support.