Protorae Law
Mike Holm | LeClairRyan | UBP Team

Unfair Business Practices



This blog focuses on unfair business and trade practices such as business conspiracy, breach of fiduciary duty, misappropriation of trade secrets and other proprietary information, fraud, tortious interference with contracts and other unfair business practices that are not neatly defined. Since we are located in Tysons Corner, Virginia, many of the cases discussed will come from Virginia, Maryland and the District of Columbia courts. We hope the reader finds this blog instructive.

Monday, March 24, 2008

Court Denies Congressman Jefferson's Motion to Dismiss His Indictment

This is an unfair business practices blog: not one that focuses on criminal matters. But, sometimes the intersection of unfair business practices and criminal conduct is so pronounced that criminal cases warrant mention. Such was the case in our prior blog entry discussing the criminal prosecution of a spammer. See
http://unfairbusinesspractices.blogspot.com/2008/03/spammer-to-slammer-unfair-business-of.html#links.

To read our view of what constitutes an unfair business practice see http://unfairbusinesspractices.blogspot.com/2007/12/what-is-unfair-business-practice_31.html#links.

So too is the relevance of the criminal prosecution of Congressman William J. Jefferson (D-LA) integral to this blog's purpose. The attached opinion analyzes the Congressman's argument that the indictment alleging his participation in several bribery schemes was invalid because the Grand Jury proceeding offended the U.S. Constitution's Speech and Debate Clause, protecting the Congressman's legislative activities. See http://www.williamsmullen.com/files/upload/20March2008_Clayton_vaed_uscourts_govp.pdf.

"The indictment alleges that beginning in or about January 2001, [Congressman Jefferson] used his office to advance the business interests of various individuals and corporations in return for money and other things of value paid either directly to defendant or via 'nominee companies,' that is, companies ostensibly controlled by one of defendant’s family members but in fact controlled by defendant himself. More specifically, the indictment alleges seven bribery schemes . . . ."

For example, "the indictment alleges that defendant solicited bribes from Vernon Jackson, president of iGate, Incorporated (iGate), a Louisville, Kentucky-based telecommunications firm, to promote iGate's telecommunications technology in certain African countries. In return for payments of money and iGate shares to the ANJ Group, L.L.C. (ANJ), a Louisiana limited liability company ostensibly controlled and managed by defendant's spouse, Andrea Jefferson, defendant allegedly sent letters on official letterhead, conducted official travel, and met with foreign government officials to promote the use of iGate’s technology."

For another of the bribery schemes, the "indictment alleges that defendant solicited bribes from Netlink Digital Television (Netlink), a Nigerian corporation that was pursuing a telecommunications venture in Nigeria and elsewhere in Africa. In return for a share of revenue, stocks, and fees from Netlink, defendant allegedly performed various official acts including meeting with Nigerian government officials to promote Netlink's business."

It is important to emphasis that Congressman Jefferson has only been accused of the crimes – not convicted. He has defended himself, in part, by claiming that the indictment should be dismissed because the "indictment was returned on the basis of information privileged by the Speech or Debate Clause, U.S. Const. Art I, § 6, cl. 1."

As the Court explained: "The Constitution's Speech or Debate Clause has a distinguished pedigree, and the principle it embodies has roots that long predate the Constitution. It states, with elegant simplicity, that:

'[F]or any Speech or Debate in either House, [Members of Congress] shall not
be questioned in any other Place.'

By its plain terms, the Clause confers absolute immunity on Members of Congress for their legislative activities. The importance of this immunity is manifest. As Justice Joseph Story recognized in his famous Commentaries on the Constitution, this is a 'great and vital privilege . . . without which all other [congressional] privileges would be comparatively unimportant, or ineffectual.' Similarly, the Supreme Court later noted that the purpose of the Speech or Debate Clause, and of similar clauses that then appeared in every state’s constitution, is 'to support the rights of the people, by enabling their representatives to execute the functions of their office without fear of prosecutions, civil or criminal.'"

Moreover, "It is also worth nothing that the Speech or Debate Clause protects Members of Congress 'not only from the consequences of litigation's results but also from the burden of defending themselves' regarding their legislative activities."

But, "the privilege applies only to those activities integral to a Member's legislative function, i.e. activities that are integral to the Member's participation in the drafting, consideration, debate, and passage or defeat of legislation. And because the scope of the Speech or Debate Clause is limited to legislative activities, it follows that the privilege does not extend to a Member's nonlegislative actions."

"Because the Clause's protection does not extend beyond the legislative sphere, it follows that the Clause does not confer immunity on a Member for the Member's criminal conduct, including conspiracy, solicitation of bribes, wire fraud, violations of the Foreign Corrupt Practices Act, money laundering, obstruction of justice, or racketeering."

After reviewing the transcript of the Grand Jury proceedings, the Court concluded that the proceeding did not violate the Speech and Debate Clause and a dismissal of the indictment was not required.

In Washington, D.C., the forces of big money and powerful politics constantly intersect. And, it is important that these cross-currents are legally navigated by business persons and politicians alike.

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