In the Courts

The Act requires individuals who represent foreign interests to make public disclosures of those activities and relationships. Reporting requirements include initial registration, quarterly reporting, and a semiannual lobbyist report. Mueller believes the FARA submissions failed to accurately reflect the lobbying work Manafort and Gates conducted on the behalf of former Ukrainian president Viktor Yanukovych and his pro-Russian Party of Regions. In Manafort's and Gates' indictment, the government alleges that Manafort and Gates accrued millions of dollars that they laundered through U.S. and foreign banks while acting as “unauthorized agents” of the Ukrainian regime. Both Manafort and Gates are contesting the charges, and their trials are reportedly preliminarily scheduled for May 2018.

In her ruling, Judge Howell found that the crime-fraud exception to privileged communications applied to certain communications made by Manafort and Gates to their counsel because they had “likely violated federal law by making, or conspiring to make, materially false statements and misleading omissions in their FARA submissions.” Judge Howell further determined that privilege was waived with respect to certain communications because Manafort and Gates voluntarily provided information to their lawyer with the expectation that it would then be conveyed to the government in FARA submissions. The court explained that the “targets impliedly waived the privilege as to their communications with the witness to the extent that these communications related to the FARA submissions' contents.”

Practically, the court's ruling means that the Special Counsel can now ask the lawyer questions about her practices in reviewing the FARA submissions and how she made representations to the Justice Department. However, the court ruled that it will not allow the Special Counsel to ask about whether the attorney memorialized conversations with her clients, because attorney work product protections still applied in those instances.

Privilege rulings in the grand jury setting are rare, largely because of the secretive nature of the process. Subpoenas involving lawyers typically would require permission from Main Justice, as prosecutors typically can only subpoena attorneys with the permission of the Justice Department's Criminal Division's office of enforcement operations — with a sign-off from a senior official in the Criminal Division. It is unclear whether Mueller and his team have a different process in place, given the team's independence from Main Justice.

While nothing in the ruling is precedent-setting or breaks new ground with regard to the attorney-client privilege and attorney work product doctrines, the court's ruling is a striking reminder for white-collar attorneys that these doctrines are narrow in the criminal law setting.

Communications with clients regarding information that is provided for the purpose of providing that information to the government may not be privileged, nor will work product be protected if the government is able to make a showing that a client provided false or misleading information with respect to a government submission or filing.

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In the Courts is written by Michael S. Stanek, an associate at Mayer Brown, Washington, DC.

Manafort Case Ruling Raises Limitations to Attorney-Client and Work Product Privileges

A Halloween ruling by U.S. District Judge Beryl Howell in the District for the District of Columbia (D.D.C.) granted Special Counsel Robert Mueller and his team permission to question a lawyer who had previously advised President Donald Trump's former campaign manager Paul Manafort, along with his business partner Richard Gates, regarding the pair's lobbying activities for the Ukrainian government. This rare ruling provides insight into the narrow scope that the attorney-client privilege and attorney work product privilege are afforded in criminal investigations.

The Special Counsel's team reportedly sought to ask Manafort's prior counsel, which press reports indicate is Melissa Laurenza of Akin Gump Hauer & Feld, eight questions. Judge Howell allowed seven of those questions to be asked, despite the defendants' claims that the questions concerned communications covered by the attorney-client and work product privileges. The focus of the questions sought by Mueller's team concerned two letters the attorney had sent on behalf of Manafort and Gates to the U.S. Department of Justice (DOJ) in November 2016 and February 2017 regarding the Foreign Agents Registration Act (FARA).

The Act requires individuals who represent foreign interests to make public disclosures of those activities and relationships. Reporting requirements include initial registration, quarterly reporting, and a semiannual lobbyist report. Mueller believes the FARA submissions failed to accurately reflect the lobbying work Manafort and Gates conducted on the behalf of former Ukrainian president Viktor Yanukovych and his pro-Russian Party of Regions. In Manafort's and Gates' indictment, the government alleges that Manafort and Gates accrued millions of dollars that they laundered through U.S. and foreign banks while acting as “unauthorized agents” of the Ukrainian regime. Both Manafort and Gates are contesting the charges, and their trials are reportedly preliminarily scheduled for May 2018.

In her ruling, Judge Howell found that the crime-fraud exception to privileged communications applied to certain communications made by Manafort and Gates to their counsel because they had “likely violated federal law by making, or conspiring to make, materially false statements and misleading omissions in their FARA submissions.” Judge Howell further determined that privilege was waived with respect to certain communications because Manafort and Gates voluntarily provided information to their lawyer with the expectation that it would then be conveyed to the government in FARA submissions. The court explained that the “targets impliedly waived the privilege as to their communications with the witness to the extent that these communications related to the FARA submissions' contents.”

Practically, the court's ruling means that the Special Counsel can now ask the lawyer questions about her practices in reviewing the FARA submissions and how she made representations to the Justice Department. However, the court ruled that it will not allow the Special Counsel to ask about whether the attorney memorialized conversations with her clients, because attorney work product protections still applied in those instances.

Privilege rulings in the grand jury setting are rare, largely because of the secretive nature of the process. Subpoenas involving lawyers typically would require permission from Main Justice, as prosecutors typically can only subpoena attorneys with the permission of the Justice Department's Criminal Division's office of enforcement operations — with a sign-off from a senior official in the Criminal Division. It is unclear whether Mueller and his team have a different process in place, given the team's independence from Main Justice.

While nothing in the ruling is precedent-setting or breaks new ground with regard to the attorney-client privilege and attorney work product doctrines, the court's ruling is a striking reminder for white-collar attorneys that these doctrines are narrow in the criminal law setting.

Communications with clients regarding information that is provided for the purpose of providing that information to the government may not be privileged, nor will work product be protected if the government is able to make a showing that a client provided false or misleading information with respect to a government submission or filing.

*****
In the Courts is written by Michael S. Stanek, an associate at Mayer Brown, Washington, DC.