Maneuvering for an Immunity Deal

The New York Times on March 29, 2012 released the following:


When a witness has valuable information and may be implicated in a violation, there are delicate maneuvers between prosecutors and defense lawyers. That is playing out behind the scenes for Edith O’Brien, an assistant treasurer at MF Global, who could have crucial information about how millions of dollars of customer money went missing in the firm’s final days.

Ms. O’Brien asserted her Fifth Amendment privilege against self-incrimination at a House subcommittee investigating MF Global’s collapse, but The Wall Street Journal reports that her lawyers are discussing with prosecutors her possible cooperation in the investigation. Until an agreement is reached with the Justice Department, however, she will maintain her silence.

Prosecutors can grant immunity in exchange for cooperation, or reach a plea bargain for a reduced sentence. Before that can happen, prosecutors need to know what the witness will say and how credible that testimony is. There is nothing worse than making a deal before knowing what you are getting in return.

In order to make a deal, prosecutors and defense lawyers engage in what is known as a “proffer” session, in which the witness is interviewed and the information being offered is gauged for its usefulness. Once someone talks with the government, however, the Fifth Amendment privilege is usually lost.

To deal with that issue, the Justice Department usually enters into an informal letter immunity agreement — sometimes called “Queen for a Day” immunity after the 1960s television game show. Such immunity is only good for the particular proffer session and ends as soon as the two sides are finished.

Under the letter agreement, the witness provides complete information to the government without waiving the protections of the Fifth Amendment.

Unlike immunity granted under the federal statute 18 U.S.C. § 6002, this is a more informal arrangement that is governed by the terms of the agreement worked out by the parties. Like any contract, it is subject to negotiation, and the leverage one party has will affect how much protection is afforded if there is not a resolution.

Prosecutors typically seek to use the statement to develop new leads and introduce new evidence gathered as a result of the information provided. This is not permissible when full statutory immunity is granted to a witness.

Another provision often sought by the government allows prosecutors to introduce the statements to impeach a defendant if the case proceeds to trial and the person testifies in a way that is contradicted by the statements made in the proffer session. This is included as a way to deter a witness from giving one story when seeking to resolve a case, and then saying something different at trial to avoid a conviction.

The federal evidence rules usually do not permit the introduction of statements made during negotiations related to a potential settlement of a case. The letter immunity is intended to get around that by having the witness waive the protection so that the statements can be used at a trial.

Some agreements go even further and allow the government to use the statements if the defendant takes any position that is inconsistent with what was said during the proffer session. That means the government could introduce the statement as direct evidence against the defendant, even if the person does not testify at trial. The United States Court of Appeals for the Seventh Circuit, in United States v. Krilich, upheld this type of provision.

The danger for a defense lawyer agreeing to letter immunity is that if the two parties cannot reach an agreement and the government files charges, the defendant is boxed in by the statements given during the proffer session. It is more difficult to testify because of the potential that the defendant will say something that contradicts a previous statement, opening up the defendant to cross-examination.

Thus, there is a powerful incentive to reach a resolution of the case after a proffer is made, giving the government significant leverage once the defense lawyer agrees to letter immunity.

The type of agreement an individual can negotiate will depend on how strong the government’s evidence is, and how much it needs the information to push its investigation forward.

At this point, Ms. O’Brien has not made a proffer to the government, which makes this the crucial point in the process. She may be the one person who can explain how customer money was transferred out of MF Global, and what directions were given by the firm’s senior management on the issue. That gives her significant leverage to work out an agreement that will not involve any criminal charges, either through a grant of immunity or informal assurances that she will not be prosecuted.

For the government, the key is whether it has enough evidence to credibly threaten Ms. O’Brien with criminal prosecution. If prosecutors do not, then the Justice Department may have to grant her immunity to get her to make a proffer.

By asserting her Fifth Amendment privilege before the subcommittee, Ms. O’Brien has maintained the ability to work out a deal with prosecutors. So the ball is now in the Justice Department’s court to negotiate the terms of letter immunity and get the information it needs to determine the future direction of its MF Global investigation.”


Douglas McNabb – McNabb Associates, P.C.’s
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