The BLT: The Blog of Legal Times

International Lawyers Debate U.S. Policy on International Criminal Court

International lawyers gathered today for a hard look at U.S. policy options following a landmark meeting of International Criminal Court members in Kampala, Uganda, in June.

After eight years on the sidelines, the United States is back in the ICC mix, with a new policy of "principled engagement" with the court, which is intended as a forum of last resort to punish crimes that shock the conscience.

The American Society of International Law commissioned eight expert papers on the direction that engagement should take, hosting the meeting today at the group’s Washington headquarters (located fittingly enough between the embassies of Greece and Kenya).

A top concern is the issue of aggression. In June, ICC members agreed to add aggression to the short list of crimes prosecuted by the court, which also include genocide, crimes against humanity and war crimes. The ICC delegates defined aggression as a "crime committed by a political or military leader which, by its character, gravity and scale, constituted a manifest violation of the Charter."

The United States is not a member of the court (neither is Russia or China), but attended the Kampala meeting as a non-state party.

In Kampala, the U.S. delegation ”arrived very focused on definitional issues” related to aggression, said David Scheffer, a professor at Northwestern University School of Law who served as Ambassador at Large for War Crimes Issues from 1997 to 2001. The problem was, the definition had “already been set in stone prior to Kampala.”

John Cerone, professor of law and director of the Center for International Law and Policy at New England School of Law in Boston, described the reaction of one delegation to U.S. efforts: “How dare a non-state party come in and try to impose its will on a definition we worked on for a decade?” he said.

Cerone recommended that further U.S. efforts to narrow the definition of aggression should only be done in good faith and to address specific problems.

Still, he said, the United States “could not have done much better” on provisions related to consent to bring charges. Members agreed the court has no jurisdiction to bring aggression charges against nationals from non-ICC member countries, and even member countries have a way to opt-out.

The United States also wanted the U.N. Security Council to have an exclusive role in deciding when to bring aggression charges. The problem, said Scheffer, is that “most governments simply despise the Security Council.”

The Security Council still has the main responsibility for determining if an act of aggression has occurred, but Scheffer noted that some details remain unclear. For example, he said, if the Security Council says yes to aggression charges, “the pathway is fairly clear for the court.” But it’s less clear what the role of the court’s judges would be if the council says no.

“The U.S. was there primarily to talk about aggression,” said David Tolbert, president of the International Center for Transitional Justice, but was “constrained greatly by the fact that the U.S. is a non-state party. If we were [members], we’d have been in a much stronger position.”

Government Contractor Seeks Injunction Against DOD, U.S. Transportation Command

Husch Blackwell is representing a government contractor in a suit that seeks to have a federal judge block the Department of Defense from revealing the details of a contract worth up to $1.5 billion that the company had been awarded, saying that doing so would violate the Trade Secrets Act.

Menlo Worldwide Government Services says in its Nov. 24 complaint that DOD and the U.S. Transportation Command awarded it a contract to provide a program that addresses transportation logistics in August 2007, after a competitive process. According to the complaint, the Defense Transportation Coordination Initiative is designed to “improve the reliability, predictability and efficiency of DOD freight transportation in the continental United States through the increased use of dedicated truck schedules, cross-docking operations, better mode selection and load optimization.”

The initial three-year phase of the contract was worth approximately $525 million and has two one-year option periods worth $543 million and two one-year option periods worth approximately $567 million. If all of the options were awarded, the total value is estimated to be roughly $1.5 billion over seven years. The initial phase expired in October 2010 but U.S. Transportation Command granted the first option, extending the program through October 2011.

On July, 16, the complaint says, U.S. Transportation Command informed Menlo that Baker & Hostetler had filed a Freedom of Information Act request for a copy of Menlo’s proposal for the program. U.S. Transportation Command’s letter asked Menlo to identify portions of the proposal that should be exempt from public disclosure.

On Aug. 16, Menlo responded with a letter, arguing that the entire proposal should fall under FOIA exemptions because it includes a number of details that could be used by competitors to achieve a competitive advantage. Among those, the complaint says, are the identity of key subcontractors, information about business strategies and pricing information.

Two months later, U.S. Transportation Command released another letter, informing Menlo that it had decided to release the proposal in full, redacting only the identities of Menlo’s suppliers and employees. Among the reasons cited for reaching that decision was that Menlo had failed to state the percentage of business it receives from government contracts.

“The DCTI contract is valued at approximately $1.5 billion over seven years. That amount would be a substantial part of any company’s business, no matter how large the company is or how much revenue it derives from government contracts,” writes Brian Waagner, a Husch Blackwell partner, in the complaint. The complaint goes on to say that the DCTI contract represents approximately 97% of Menlo’s business.

The complaint asks that Judge Henry Kennedy of the U.S. District Court for the District of Columbia declare the decision to release Menlo’s proposal arbitrary and to issue a permanent injunction that would bar DOD and U.S. Transportation Command from releasing those documents.

No attorneys have entered an appearance on behalf of DOD and U.S. Transportation Command.

Cobell, Pigford Settlements Get Final Approval From Congress

The U.S. House of Representatives voted 256-152 today to approve two multibillion-dollar settlement agreements that have been winding their way through Congress and that would benefit minority groups with claims against the federal government.

Legislation authorizing the settlements now heads to President Barack Obama, who is expected to sign it. As The National Law Journal reported today, administration officials made a last-minute push to see that the settlements won final approval from lawmakers.

Under debate rules pushed through by Democrats, the House made no changes to the legislation that senators approved Nov. 19. The legislation authorizes a $3.4 billion settlement with American Indians, including lead plaintiff Elouise Cobell, who say the U.S. Interior Department mismanaged trust accounts for natural resource royalties. It also authorizes $1.15 billion, in a case named for plaintiff Timothy Pigford, for black farmers who say they were discriminated against by the U.S. Department of Agriculture.

Debate among House members this afternoon was heated and partisan.

“We did the wrong thing, and all of us acknowledge it is never too late to do the right thing,” said House Majority Leader Steny Hoyer (D-Md.), speaking in favor of the settlements.

Rep. Steve King (R-Iowa) spoke against money for the Pigford plaintiffs. He called the settlement “modern-day reparations” for slavery, and he said the standards for filing a claim to be part of the settlement were too loose. “It’s gotta be fraud,” he said.

In a statement after the vote, Attorney General Eric Holder Jr. called the settlements “truly historic” and said they “offer a new relationship between many deserving Americans and the federal agencies that play an important role in their lives.”

Updated at 5:32 p.m. with Holder's statement.

Former MPD Officers File $10M Suit Against District

Two former Metropolitan Police Department officers have filed a $10 million suit against the District of Columbia, MPD Police Chief Cathy Lanier and retiring D.C. Attorney General Peter Nickles, alleging that they were improperly fired and have yet to be reinstated despite winning favorable rulings from an arbiter and the Public Employees Relations Board.

Toledo Kelley and Anthony Conrad allege in their Nov. 23 complaint that they were fired by the police department in 2004. Kelley was accused of violating department policy by taking disability leave in order to work another job. Conrad was accused of altering a document pertaining to his disability leave. The lawyer handling the lawsuit against the District, Gregory Lattimer, a Washington-based solo practitioner, said both of those allegations were untrue.

Kelley and Conrad both had their terminations overturned by the Public Employees Relations Board, which determined that MPD had failed to meet timetables for internal affairs cases. The District’s personnel rules allow police officers to request a hearing before a police trial board. Once a hearing is requested, the department has 55 days to issue a final decision.

After winning before the board, MPD challenged the decision in Kelley’s case in D.C. Superior Court but ultimately lost. Judge Ronna Lee Beck determined that "PERB’s decision was supported by substantial evidence in the record as a whole and that it was not clearly erroneous as a matter of law.” MPD opted not to challenge the decision in Conrad’s case, according to the complaint which was filed by Lattimer in the U.S. District Court for the District of Columbia on Nov. 23.

According to the complaint, Nickles sent a letter to Lanier on May 23, 2008, urging her to tell the U.S. Attorney’s Office that Kelley and Conrad should be deemed “inefficient” because with their allegedly spotted employment history, they would not be considered reliable witnesses in future criminal cases brought by the District in which they might be asked to testify.

The U.S. Attorney’s Office responded, the complaint says, by saying that if what Lanier and Nickles told them were true, Kelley, Conrad, and several other officers in similar positions might be considered inefficient. Kelley and Conrad were subsequently fired again.

“The sole basis for upholding this bogus charge against the plaintiffs was a directive handed down by the defendants that the sham trial board hearings conducted were to conclude with an adverse determination consistent with the Nickles letters of May and August 2008,” Lattimer writes in the complaint. The complaint accuses Nickles and Lanier, who are named in both their professional and personal capacities, and the District of depriving Kelley and Conrad of their civil rights and of conspiring to deprive them of their civil rights.

Kelley and Conrad are in arbitration attempting to return to the police force, Lattimer said.

Lattimer said that his clients’ case stems from an ongoing problem at the MPD, where officers accused of sanctionable infractions of department policy have their cases pass the 55-day threshold before they are given a final decision on the sanctions. That issue was the subject of a 2008 Washington Post report, which found that the department had to rehire 17 officers it had fired because of missed deadlines.

“This is the kind of situation that make you just shake your head. They missed the 55-day deadline, so now Nickles and Lanier are dragging this case out even longer,” Lattimer said.

MPD referred all comment to the D.C. Attorney General’s Office. Nickles did not return calls to his office or cell phone.

SEC Charges ex-Deloitte Partner with Insider Trading

The Securities and Exchange Commission today charged a former Deloitte Tax LLP partner and his wife with insider trading, alleging that the pair leaked confidential information about pending mergers and acquisitions to relatives in England.

According to the SEC, Arnold McClellan and his wife, Annabel, who live in San Francisco, provided advance notice of at least seven confidential acquisitions planned by Deloitte's clients to Annabel's sister and brother-in-law. The brother-in–law, who co-owns a London-based trading firm, then took financial positions in the companies, reaping about $3 million in profits, to be split 50/50 with Annabel.

The U.K. Financial Services Authority announced charges against the two relatives — James and Miranda Sanders of London. The FSA also charged colleagues of James Sanders with acting on illegal tips. Sanders's tippees and clients allegedly made approximately $20 million by trading on the inside information.

Confidential deals allegedly revealed by McClellan between 2006 and 2008 include:

• Kronos Inc., a Massachusetts-based data collection and payroll software company acquired by a private equity firm in 2007.

• aQuantive Inc., a Seattle-based digital advertising and marketing company acquired by Microsoft in 2007.

• Getty Images Inc., a Seattle-based licenser of photographs and other visual content acquired by a private equity firm in 2008.

In a complaint filed in U.S. District Court for the Northern District of California, the McClellans are charged with violating the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctive relief, disgorgement of illicit profits with prejudgment interest, and financial penalties. Additional criminal charges may follow.

Arnold McClellan is represented by Keker & Van Nest partners Elliot Peters and Christopher Kearney. Peters did not immediately return a call seeking comment. Annabel McClellan is represented by Nanci Clarence of Clarence & Dyer, who also could not be reached for comment.

SEC lawyers Marc Fagel, Michael Dicke, Robert Tashjian, Lloyd Farnham, Victor Hong and Alice Jensen are representing the agency.

"The McClellans might have thought that they could conceal their illegal scheme by having close relatives make illegal trades offshore. They were wrong," said Robert Khuzami, director of the SEC's Division of Enforcement in a written statement. "In this day and age, whether it's across oceans or across markets, the SEC and its domestic and foreign law enforcement partners are committed to identifying and prosecuting illegal insider trading."

One More Party for Larry Barcella, Distinguished Trial Lawyer

Larry Barcella wanted a party, and his closest friends made sure that request was fulfilled last night.

Hundreds of friends, former colleagues and admirers attended a memorial ceremony Monday evening in Washington’s federal district trial court, where Barcella, the outgoing, storytelling litigator made a name as a terrorism prosecutor in the 1970s and 1980s and then later as a white-collar defense lawyer.

Barcella, a former litigation partner in Washington at Paul, Hastings, Janofsky & Walker, was in private practice from 1986 until his death earlier this month from cancer. The Washington native was 65.

Yesterday evening, Judge Paul Friedman of the U.S. District Court for the District of Columbia presided, at Barcella's request, over his memorial ceremony, which was held in the ceremonial courtroom of the E. Barrett Prettyman U.S. Courthouse in downtown. Washington’s legal elite crowded the room.

Speakers included one of Barcella’s longtime friends, Martin Gale, who said he feared there are no cute, clean stories from their days at Dartmouth College. Gale noted Barcella’s attention to detail—using his ability to memorize a Budweiser bottle label to highlight the point.

Paul Hastings chairman Seth Zachary praised Barcella’s sense of humor. And his legal mind. “His legal excellence was widely respected, relied upon and treasured,” said Zachary, a partner in the firm’s tax practice in New York.

Zachary said Paul Hastings is planning to partner with the American Bar Association to establish a fund in Barcella’s name to foster collegiality among prosecutors and defense lawyers. Barcella believed vitriol between prosecutors and defense lawyers was unnecessary and counterproductive, Zachary said.

DLA Piper partner Earl Silbert, a former U.S. attorney for the District of Columbia, spoke of the “twinkle” in Barcella’s eyes, how he lived life not as an observer but as a participant. Silbert was one of a group of lawyers who regularly attended a winter ski trip with Barcella.

Silbert described Barcella as a “one-man anti-terrorist force.” Barcella was a prosecutor in proceedings that arose from the assassination of Chilean diplomat Orlando Letelier, the alleged illegal sales of explosives to Libya by former CIA agent Edwin Wilson and the 1983 bombings of the American embassies in Beirut and Kuwait. The pursuit of Wilson was the subject of Peter Maas’ 1986 book, “Manhunt.”

Attorney General Eric Holder Jr. called Barcella’s death a great loss, praising him as an “example of integrity and achievement.”

After nearly an hour yesterday, Friedman adjourned court in the honor of E. Lawrence Barcella Jr. Then, it was time to party. The reception was held at the Old Ebbitt Grill.

Defense Lawyers Ask Congress for FCPA Changes

U.S. companies are spending too many resources worrying they might unintentionally run afoul of the law that prohibits bribes to foreign officials, two defense lawyers said today.

Mayer Brown partner Michael Volkov and Jenner & Block partner Andrew Weissmann told lawmakers that they should consider amending the Foreign Corrupt Practices Act. Testifying before the Senate Judiciary Committee, they said companies get too little credit for making good-faith efforts to comply with the law.

The Justice Department has greatly increased prosecutions under the FCPA in recent years, winning fines and, in some cases, criminal convictions of individuals found to have bribed government employees abroad or committed other corrupt acts.

Some senators signaled they are open to changes, either in the language of the law or in how prosecutors use it. Sen. Amy Klobuchar (D-Minn.) noted that the 1977 law was passed when U.S. companies did relatively little business in China and other countries. “My major concern is if we have a level playing field that hurts American businesses,” Klobuchar said.

Weissmann, who is co-chairman of Jenner & Block’s white collar defense practice, said Congress should create a defense under the FCPA for companies whose employees violate established anticorruption policies. “An organization that has an ideal compliance program has done nothing wrong, as a company, when an employee nevertheless flouts that program and pays a bribe,” he said.

Volkov disagreed with that proposal, saying the defense wouldn’t prevent a company from being indicted. But he suggested other changes, such as more guidance about what a company would gain from voluntarily disclosing a potential FCPA violation.

“In the absence of clarity and transparency, companies may not adequately balance the risks and benefits of voluntary disclosure. Hence, the sleepless nights of company officials,” said Volkov, a former assistant U.S. attorney in the District of Columbia.

Greg Andres, an acting deputy assistant attorney general in the Justice Department’s Criminal Division, disputed some of the criticism. Testifying separately, he said that self-disclosure and cooperation are two of nine factors that the department considers when deciding how to proceed with a case. He spoke against granting immunity for self-disclosure.

“We don’t believe that immunity is appropriate, just as we believe immunity is not appropriate for a bank robber who discloses that he robbed a bank,” Andres said.

The Morning Wrap

WikiLeaks Facing Espionage Charges? Federal authorities are investigating whether WikiLeaks founder Julian Assange violated criminal laws when he and his Web site released a cache of government documents, The Washington Post reports. Among the charges being considered are possible violations of the Espionage Act. Attorney General Eric H. Holder Jr. said the Justice Department and Pentagon are conducting "an active, ongoing criminal investigation.''

U.S. Balks at North Korea Talks: The United States, South Korea and Japan are all balking at China’s request for emergency talks with North Korea over the crisis on the Korean Peninsula, The New York Times reports. According to the Times, Obama administration officials said that a return to the table with North Korea, as China sought this weekend, would be rewarding the North for provocative behavior over the past week.

Study: Most Troops Don't Care Whether They Serve With Gays: The Associated Press reports that officials familiar with the Pentagon's 10-month study of the federal Don't Ask, Don't Tell Policy say that a clear majority of respondents don't care if gays serve openly, with 70 percent predicting that lifting the ban would have positive, mixed or no results. Those result are expected to reignite the debate over DADT.

School Gunman Shoots Self: A 15-year-old gunman eventually shot himself as police stormed the Wisconsin classroom where he had held 23 classmates hostage for nearly seven hours. None of the hostages were harmed. Authorities also said they did not know what might have motivated the boy who made no demands or requests during the standoff, The AP reports.

In Dispute Over $5,000 Fine, D.C. Judge Reverses Himself

District of Columbia Superior Court Judge Brian Holeman may have felt teamed up on in a dispute over the return of a man's $5,000 fine in a criminal contempt case.

Federal prosecutors and lawyers for the District said this month in court papers that Holeman has the authority to order a refund of a man's fine since it was attached to a criminal conviction that an appeals court vacated. Holeman wasn't convinced.

Responding to a demand from the D.C. Court of Appeals to justify why the money should not be returned, Holeman said this month the fine is beyond his control. The former defendant, W. Stuart Battle, already cut a check. The money, the judge said, belongs to either the United States or the District of Columbia.

Battle’s lawyers at Cozen O’Connor in Washington have fought for the return of the fine for more than a year. Simple argument: the conviction was dismissed, so the money should be returned. An attorney for Battle, Cozen partner Bernard Grimm, petitioned the D.C. Court of Appeals in October, urging the court to order Holeman to refund the money.

With the appeals court weighing the rare dispute—and the potential for the court to publicly rebuke Holeman for failing to return the money sooner—the trial judge last week abruptly reversed himself. Holeman didn’t wait for an appellate court ruling.

In a nine-page order Nov. 23, Holeman told court officials to refund $5,000 to Battle, a doctor who was held in criminal contempt for skipping out on a medical malpractice trial appearance. More on the underlying case here.

“It’s unfortunate our client had to wait this long to get his money returned in a case where everyone agreed that it should be returned,” Grimm said.

Holeman based his decision in the interest of justice. Still, he took a parting shot at the federal prosecutors and District lawyers who earlier sided against him. Holeman’s Nov. 23 ruling is here.

The applicable District statute says all paid fines “immediately” become the property of the United States or the District of Columbia. Holeman said the DOJ attorneys and District lawyers failed to address the application of this statute and “seem simply to disregard it.”

Holeman said there is no appellate explanation of the judicial or administrative “mechanics” for the return of a defendant’s money and there is no reported case that the judge says gives him authority to order the return of the money.

In his ruling last week, the judge noted that other jurisdictions, including Maryland and New Jersey, have established procedures to handle the return of a defendant’s fine.

Fox Rothschild Opens D.C. Outpost

With the addition of three lawyers from Philadelphia-based Dilworth Paxson, Fox Rothschild has launched an office in the nation’s capital after flirting with the possibility for more than a decade.

Fox Rothschild has brought on Margaret Gatti, who joins as a partner, Louis Rothberg, a counsel, and Mark Sullivan, an associate. Gatti and Rothberg will work in the firm’s newly opened office at One Franklin Square at 1301 K Street N.W. and Sullivan will work from the firm’s Philadelphia office.

Gatti represents domestic and foreign clients on international law issues, with a focus on export control and customs law, embargoed country regulations, international tax and trade law and Foreign Corrupt Practices Act matters. She also handles government contracts issues.

Rothberg advises U.S. and foreign entities on national security matters, including foreign ownership, control and influence; and Committee on Foreign Investment in the United States matters.

Mark Silow, administrative partner of Fox Rothschild (pictured above), said that the firm has been working to open an office in Washington for more than 10 years, but “hasn’t been able to find the right mix of people and practices to get one going.” Now that the firm has a foothold in the District, he said he would like to see the office grow to have between 20 and 30 lawyers.

“Synergy is an overused word, but we have seen an ability to self-generate work when you have an office of that size,” Silow said. He added that the firm is looking to add laterals to the Washington office whose practices focus on Food and Drug Administration compliance, communications, intellectual property and government contracts.

“We’re not looking to grow for growth’s sake. But we are looking to add top-flight practitioners with good books of portable business,” Silow said.

Photo courtesy of Carmen Natale.