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U.S. v. Hubbard : prosecuting false statements to Congress : hearing before the Subcommittee on Crime of the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, first session, June 30, 1995 online

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U.S. v. HUBBARD: PROSECUTING FALSE
STATEMENTS TO CONGRESS



Y 4. J 89/1:104/41

U.S. U. Hubbard: Prosecuting False.



HEARING

BEFORE THE

SUBCOMMITTEE ON CRIME

OF THE

COMMITTEE ON THE JUDICIARY
HOUSE OP REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS

FIRST SESSION



JUNE 30, 1995



Serial No. 4f Cfti,




fegftfte









Printed for the use of the Committee on the Judiciary



U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1996



For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052467-9



^



fc



U.S. v. HUBBARD: PROSECUTING FALSE
STATEMENTS TO CONGRESS



Y 4. J 89/1:104/41

U.S. U. Hubbard: Prosecuting False...

HEARING

BEFORE THE

SUBCOMMITTEE ON CRIME

OF THE

COMMITTEE ON THE JUDICIAKY
HOUSE OP REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
FIRST SESSION



JUNE 30, 1995



Serial No. 41' trj„










Printed for the use of the Committee on the Judiciary



U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1996



For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052467-9



COMMITTEE ON THE JUDICIARY



HENRY J. HYDE, Illinois, Chairman



CARLOS J. MOORHEAD, California
F. JAMES SENSENBRENNER, Jr.,

Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
STEVEN SCHIFF, New Mexico
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB INGLIS, South Carolina
BOB GOODLATTE, Virginia
STEPHEN E. BUYER, Indiana
MARTIN R. HOKE, Ohio
SONNY BONO, California
FRED HEINEMAN, North Carolina
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
MICHAEL PATRICK FLANAGAN, Illinois
BOB BARR, Georgia



JOHN CONYERS, JR., Michigan
PATRICIA SCHROEDER, Colorado
BARNEY FRANK, Massachusetts
CHARLES E. SCHUMER, New York
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JOHN BRYANT, Texas
JACK REED, Rhode Island
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
XAVIER BECERRA, California
JOSE E. SERRANO, New York
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas



ALAN F. COFFEY, Jr., General Counsel /Staff Director
Julian Epstein, Minority Staff Director



Subcommittee on Crime

BILL McCOLLUM, Florida, Chairman

STEVEN SCHIFF, New Mexico CHARLES E. SCHUMER, New York

STEPHEN E. BUYER, Indiana ROBERT C. SCOTT, Virginia

HOWARD COBLE, North Carolina ZOE LOFGREN, California

FRED HEINEMAN, North Carolina SHEILA JACKSON LEE, Texas

ED BRYANT, Tennessee MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio
BOB BARR, Georgia



PAUL J. McNULTY, Chief Counsel

GLENN R. Schmitt, Counsel

DANIEL J. BRYANT, Assistant Counsel

TOM DIAZ, Minority Counsel



(ID



CONTENTS



HEARING DATE



Page

June 30, 1995 1

OPENING STATEMENT

McCollum, Hon. Bill, a Representative in Congress from the State of Florida,

and chairman, Subcommittee on Crime 1

WITNESSES

Flanigan, Timothy F., counsel, Jones, Day, Reavis & Pogue 21

Goldstein, Gerald H., president, National Association of Criminal Defense

Lawyers 26

Martini, Hon. William J., a Representative in Congress from the State of

New Jersey 2

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Flanigan, Timothy F., counsel, Jones, Day, Reavis & Pogue: Prepared state-
ment 24

Goldstein, Gerald H., president, National Association of Criminal Defense

Lawyers: Prepared statement 28

Martini, Hon. William J., a Representative in Congress from the State of
New Jersey: Prepared statement 7



(III)



U.S. v. HUBBARD: PROSECUTING FALSE
STATEMENTS TO CONGRESS



FRIDAY, JUNE 30, 1995

House of Representatives,

Subcommittee on Crime,
Committee on the Judiciary,

Washington, DC.
The subcommittee met, pursuant to notice, at 9:37 a.m., in room
2237, Rayburn House Office Building, Hon. Bill McCollum (chair-
man of the subcommittee) presiding.

Present: Representatives Bill McCollum, Steven Schiff, Howard
Coble, Fred Heineman, Ed Bryant of Tennessee, Steve Chabot, Bob
Barr, Charles E. Schumer, Robert C. Scott, Zoe Lofgren, Sheila
Jackson Lee, and Melvin L. Watt.

Also present: Paul J. McNulty, chief counsel; Glenn R. Schmitt,
counsel; Daniel J. Bryant, assistant counsel; Aerin D. Dunkle, re-
search assistant; Audrey Clement, secretary; and Tom Diaz, minor-
ity counsel.

OPENING STATEMENT OF CHAIRMAN McCOLLUM

Mr. McCollum. The subcommittee will come to order. Good
morning.

This morning we're going to look at a special section of the law
that for decades has been a powerful tool in the hands of prosecu-
tors seeking to address the willful misleading of the executive, judi-
cial, and legislative branches. That is section 1001 of title 18 of the
U.S. Code.

It has been a long-haul statute. It has been around quite a long
time. Over the years section 1001 has been used to prosecute a
wide variety of misconduct. Notable prosecutions under section
1001 include those of Lieutenant Colonel North and Admiral
Poindexter, and more recently the case against former Congress-
man Rostenkowski.

On May 15, 1995, the U.S. Supreme Court dramatically changed
criminal law dealing with the offense of willfully misleading a
branch of the Government. In the case of Hubbard v. United
States, the Supreme Court limited the application of section 1001
to only the executive branch, leaving the offenses of lying to Con-
gress in the courts outside its scope.

As a consequence, Congress is faced with a decision. Do we want
to amend 1001 so as to return to the state of the law before the
Hubbard decision? And if so, how? Whatever our decision, we must
proceed with care. Certain legislative fixes may be unintentionally
problematic over the long run.

(l)



In amending section 1001, we must guard against criminalizing
behavior which was not criminal before the Hubbard decision. For
example, do we want an amended section 1001 which makes a lob-
byist's statement to a congressional aide a criminal act if it is later
shown that that statement was false?

Moreover, we must take seriously the concern raised by the
Court regarding the effect of this statute on our adversarial system
of justice. Statutes which deter quality representation of criminal
defendants must be avoided.

Everyone should want to ensure that law enforcement has the
ability to punish those who willfully mislead Congress, but that
ability must be weighed against our commitment to free speech, a
balanced adversarial system of justice, and a genuine separation of
power between the three branches of government.

My friend from New Jersey, Bill Martini, is to be commended for
his prompt response to the Hubbard decision. The bill that he in-
troduced, H.R. 1678, the Government Accountability Act, is an ex-
cellent starting point for this subcommittee as it begins to take ac-
tion.

I would like to thank all the witnesses for coming today. I look
forward particularly to the testimony of Congressman Martini and
those who follow after him. I am at this point in time going to in-
troduce my good friend.

I'd like to welcome our guest in the first panel who is Congress-
man Martini. He was elected to the House of Representatives from
the Eighth Congressional District of New Jersey in November
1994. He serves on the Committee on Transportation and Infra-
structure as well as the Committee on Government Reform and
Oversight.

In addition, Congressman Martini is a member of the Congres-
sional Crime Task Force and the Congressional Immigration Task
Force. He has been a prominent New Jersey attorney for many
years. He's a former Federal and county prosecutor. He relin-
quished his Cedar Grove law practice upon taking office as a U.S.
Representative.

Bill Martini is a graduate of Villanova University and received
his law degree from Rutgers University Law School in 1972. Mr.
Martini is active in many civic and charitable organizations, serv-
ing as a trustee of the United Way of Passaic County, the Center
for Italian-American Culture, and the Passaic Valley Council of the
Boy Scouts of America.

I'm sure I mispronounced your county. You can correct me for
that. But welcome, Bill. We're happy to have you here today, par-
ticularly because you have been able to craft this piece of legisla-
tion, to initiate our effort to take a reexamination of section 1001.

STATEMENT OF HON. WILLIAM J. MARTINI, A REPRESENTA-
TIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. Martini. Well, thank you, Mr. Chairman. It's a pleasure to
be here before you and the other members of the subcommittee. I
thank you for providing me the opportunity to testify before you
today.

I think, as you so ably put it already, my intent is to present this
legislation as a beginning point for a dialogue which — and certainly



it's my intent to work with this committee and to finalize and for-
mulate a final product — we can bring to the floor.

I would like to start, I think it's probably most appropriate to
start by simply reciting section 1001 of title 18 of U.S. Code. That
statute reads as follows: "Whoever, in any matter within the juris-
diction of any department or agency of the United States knowingly
and willfully falsifies, conceals, or covers up by any trick, scheme
or device a material fact, or makes any false, fictitious or fraudu-
lent statements or representations, or makes or uses any false writ-
ing or document knowing the same to contain any false, fictitious
or fraudulent statement or entry, shall be fined $250,000 or
$500,000 for an organization, or imprisoned not more than 5 years
or both."

The question before us today is whether or not individuals who
knowingly and intentionally issue a fraudulent or false statement
to the legislative or judicial branch of the Federal Government
should be subject to criminal prosecution under title 18 of section
1001. The legislation I am proposing, the Government Accountabil-
ity Act, H.R. 1678, is intended to amend section 1001 in such a
manner as to make its application consistent with the legal prece-
dents established prior to the recent Supreme Court decision in
Hubbard v. United States.

Under the Hubbard decision, section 1001 is now only applicable
to individuals who knowingly issue a false statement to the execu-
tive branch of the Federal Government or a department or agency
thereof. The Court has ruled that false statements made by indi-
viduals to the legislative or judicial branch of government can no
longer be prosecuted under section 1001. This is based on their in-
terpretation of the plain meaning of the language of the statute
and their interpretation that the language or words, department,
or agency of the United States, does not apply to the courts, and
by inference does not apply to the Congress.

This holding was contrary to 40 years of legal precedent estab-
lished by a 1955 Supreme Court ruling in Bramblett v. United
States. In that case, Bramblett, the defendant, was a former Con-
gressman who was convicted of orchestrating a ghost employee
scheme. The Court held that Bramblett, "Falsely and fraudulently
represented to the disbursing office of the House of Representatives
that a named woman was entitled to compensation as his official
clerk."

In Bramblett, a lower court found that the false statement stat-
ute was meant to describe the executive, legislative and judicial
branches of the Government. Thus, persons who made false state-
ments to the legislative branch could be and were after Bramblett,
prosecuted under section 1001.

In Hubbard, the Supreme Court this year held that, "A court is
neither a department nor an agency within the meaning of section
1001." They did that based upon their understanding and reading
of the plain language of the statute. This clearly implies that Con-
gress is certainly not an agency or department of the executive
branch. In fact, a lower court has recently used Hubbard to over-
turn the conviction of a former HUD official who lied to Congress.

In an effort to clarify the existing law, I have introduced the Gov-
ernment Accountability Act, H.R. 1678. By amending section 1001



of title 18 to include the proposed language, by striking "any de-
partment or agency" of the United States, and inserting the lan-
guage, "The executive, legislative or judicial branch or any depart-
ment or agency thereof." This would, in my opinion, make title 18,
section 1001, of title 18 applicable to false statements made to any
three branches of the Federal Government. Individuals who know-
ingly and intentionally deceive or issue fraudulent statements in
dealings with any branch of the Federal Government should in my
opinion be prosecuted to the fullest extent of the law.

As a former Federal prosecutor in Newark, NJ, I know firsthand
the importance of section 1001 of title 18. In my opinion, this is a
critical provision of law which protects the Federal Government
from potential waste, fraud, and abuse.

Mr. Chairman, last November we were elected to serve the
American people and not ourselves. Without the protections of sec-
tion 1001, we have subjected the legislative and judicial branches
of the Federal Government to a Pandora's box of potential abuse.
For this reason, I applaud this subcommittee for taking swift action
on this important matter.

My legislation, if enacted, would restore section 1001 of title 18
to the status quo prior to the Hubbard decision. Members of Con-
gress, congressional staff, and those who conduct business with the
legislative and judicial branch of government must be held respon-
sible for their actions. I am concerned that without a viable Federal
false statement statute, Government officials and others will be
able to engage in acts of fraud and misconduct against the legisla-
tive and judicial branches of government, without fear of retribu-
tion.

Much of the attention surrounding the Hubbard decision has fo-
cused on the applicability of section 1001 to Members of Congress.
Section 1001 in the past has been used to prosecute Members of
Congress who lie on their financial disclosure forms, initiate ghost
employee schemes, knowingly submit false vouchers, and purchase
personal goods and services with taxpayer dollars. Without a viable
false statement statute, as H.R. 1678 would maintain, these crimes
may very well go unpunished.

I would now like to address an application of section 1001 that
may concern some members of this committee and others else-
where. In United States v. Poindexter, the Court held that section
1001 was not only applicable to false claims by Members of Con-
gress, but also to false testimony by executive branch officials to
Congress. As a member of the Government Reform and Oversight
Committee, this application of section 1001 is of critical importance
to me.

One of the primary responsibilities of Congress is the oversight
of the various functions of the Federal Government. Congress often
makes legislative decisions based in part on testimony or informa-
tion received from the executive branch and nongovernmental wit-
nesses. We generally operate, and rightfully so, on the assumption
that the testimony we receive from various Government officials is
accurate and truthful. Many would suggest that it's the enforce-
ment mechanism provided by section 1001 of title 18 that ulti-
mately protects the legislative branch from false statements. It is,
I believe, for this reason that both Chairman Bill dinger of the



Government Reform and Oversight Committee and Chairman
Floyd Spence of the National Security Committee have cosponsored
H.R. 1678.

Nevertheless, I do want to make it clear this morning that the
intent of my legislation is not to create a tidal wave of special pros-
ecutor and independent counsel investigations into this administra-
tion or any other administration. Rather, the Government Account-
ability Act is meant to restore and clarify the Federal false state-
ment statute to its pre-Hubbard application.

At the same time, I firmly believe that a representative of the
executive branch who knowingly and intentionally issues a false or
deceptive statement to Congress, that this individual should be
charged with an appropriate crime, regardless of his or her political
affiliation. I would like to work with this committee in an effort to
ensure that this provision of my legislation is not abused by an
overzealous U.S. attorney or a partisan committee chairman. I cer-
tainly believe that we can reach a resolution on this issue as we
proceed through this legislative process.

Some of you may suggest that a law simply criminalizing the fal-
sification of a Member s financial disclosure form would be enough
to fill the gap created by the Hubbard decision. Some would argue
that other criminal statutes, such as perjury, obstruction of justice,
and contempt of Congress can protect this institution from unscru-
pulous administration officials and private citizens. Mr. Chairman,
in my opinion, the truth of the matter is that the above provisions
are inadequate.

While perjury is often an accompanying charge in false state-
ment cases, it is a much more difficult charge to gain conviction.
I am sure that anyone who has had to deal with those statutes
knows the difficulty in proving and establishing the elements of a
perjury case. A perjury conviction invokes the two-witness rule and
demands that the testimony be supported with corroborative evi-
dence. Furthermore, an executive branch official or private citizen
must be under oath while issuing a false statement in order to be
charged with perjury. Often administration officials are afforded
the courtesy of testifying without being sworn in, thus nullifying
the use of a perjury charge.

Contempt of Congress is certainly a viable charge for those who
mislead the legislative branch. However, contempt is only a mis-
demeanor crime which carries a maximum penalty of up to a 1
year prison term. I, for one, do not believe that exposure to a mis-
demeanor prosecution alone provides Congress witn adequate pro-
tection from criminally false statements.

Finally, the obstruction of justice statute was essentially negated
in the Poindexter decision. The Court held that section 1505 of U.S.
Code was not applicable to false or misleading statements to Con-

fress. I would, however, like to note that in Poindexter the Court
id affirm that section 1001 is the correct statute to provide this
protection. The false statement statute has also been used to suc-
cessfully prosecute private citizens and Presidential appointees
who have intentionally lied before congressional panels.

Before I conclude, I would also like to address some of the con-
cerns that may be raised, and I note this morning we have two
other witnesses and I'm sure they will raise these concerns, and I



6

share their concerns, raised by the Criminal Defense Lawyers As-
sociation later on in this hearing. I practiced criminal defense work
for over 14 years, so I am very sensitive to their concerns and agree
in large part with what their concerns are.

While the Government Accountability Act does apply section
1001 to the judicial as well as the legislative branch, it is not in-
tended to be directly applicable to formal courtroom proceedings.
Rather, I think certainly I would be open-minded to perfecting lan-
guage that will address where it would be concerned in the judicial
branch of the Government. I think it would be consistent with
some of the language that was developed in case law prior to the
Hubbard decision which pretty much carved out a judicial exemp-
tion so that it would not apply to defense lawyers in the process
of litigation in courtroom proceedings.

In fact, Federal case law stemming from Morgan v. United States
and United States v. Mayer has clearly demonstrated that courts
have waived the application of section 1001 in matters pertaining
to the courtroom. The idea that a criminal defense lawyer would
be exposed to indictment for simply defending an unscrupulous cli-
ent who is advancing a false or fraudulent defense is not the intent
of this legislation.

As a former criminal defense lawyer and an assistant U.S. attor-
ney, my goal in applying 1001 to the judicial branch is to provide
a penalty for individuals who intentionally and knowingly lie or
issue false statements in the context of the administrative duties
of the judiciary branch, not its litigation proceedings. I believe
these would be appropriate uses of 1001 in the judicial setting.

The American people have demanded a Federal Government that
is not above the law. Without section 1001, we will seriously jeop-
ardize the ability of this institution to protect itself from both inter-
nal and external fraud. Mr. Chairman, the challenge before this
committee is to address this important issue quickly and respon-
sibly. As it stands now, there is a significant change in the law be-
tween the pre-Hubbard decision and the post-Hubbard decision.
Again I repeat, the intent of my legislation is to simply amend title
18 in a manner in which the Federal false statement statute would
be applied consistent with the precedence established prior to the
Hubbard decision.

To the extent that some may still be concerned that this legisla-
tion would create a potential floodgate of special prosecutor and
independent counsel investigations into the executive branch, I cer-
tainly would work with this panel to ensure that abuse in this area
is prevented.

In closing, I look forward to working with the committee as the
Government Accountability Act moves through the legislative proc-
ess. I again thank the committee for providing me with this oppor-
tunity and hope that we can reach a successful resolution that will
fill the gap that has been created by the Hubbard decision.

Thank you very much, Mr. Chairman, distinguished members.

[The prepared statement of Mr. Martini follows:]



Prepared Statement of Hon. William J. Martini, a Representative in
Congress From the State of New Jersey

Before I begin, I want to thank Chairman McCollum as well as the other Mem-
bers of the Subcommittee for providing me with the opportunity to testify before you
today.

I would like to start by simply reciting Section 1001 of 18 U.S. code.

"Whoever, in any matter within the jurisdiction of any department or agency of
the United States knowingly and willfully falsifies, conceals or covers up by any
trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent
statements or representations, or makes or uses any false writing or document
knowing the same to contain any false, fictitious or fraudulent statement or entry,
shall be fined $250,000 ($500,000 for organizations) or imprisoned not more than
five years or both."

The question before us today, is whether or not individuals who knowingly and
intentionally issue a fraudulent or false statement to the Legislative or Judicial
Branch of the Federal Government should be subject to criminal prosecution under
Title 18 Section 1001 of U.S. Code.

The legislation I am proposing, the Government Accountability Act (H.R. 1678),
is intended to amend Section 1001 in such a manner as to make its application con-
sistent with the legal precedents established prior to the recent Supreme Court deci-
sion in Hubbard v. United States.

Under the Hubbard decision, Section 1001 of 18 U.S. Code is now only applicable
to individuals who knowingly issue a false statement to the Executive Branch of the
Federal Government.

The Court has ruled that false statements made by individuals to the Legislative
or Judicial branch of government can no longer be prosecuted under Section 1001.

This holding was contrary to forty years of legal precedent established by a 1955
ruling in Bramblett v. United States.

Bramblett was a former Congressman who was convicted of orchestrating a ghost
employee scheme. In this case, the Court held that Bramblett had, "falsely and
fraudulently represented to the Disbursing Office of the House of Representatives
that a named women was entitled to compensation as his official clerk."

In Bramblett, a lower court found that the false statement statute, "was meant
to describe the executive, legislative, and judicial branches of the Government."
Thus, persons who made false statements to the Legislative Branch could be pros-
ecuted under Section 1001.

In Hubbard, the Supreme Court held that, "a court is neither a 'department' nor
an agency within the meaning of Section 1001." This clearly infers that Congress
is certainly not an agency or department of the Executive Branch. In fact, a lower


1 3 4 5 6 7

Online LibraryUnited States. Congress. House. Committee on the JU.S. v. Hubbard : prosecuting false statements to Congress : hearing before the Subcommittee on Crime of the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, first session, June 30, 1995 → online text (page 1 of 7)