Today, we have yet another development of interest. It is reported that David Pecker, chair and CEO of American Media, the publisher of such publications as the National Enquirer. (See his Wikipedia page here.) Pecker used his publication power in support of Trump both in the press and outside the press and before his campaign for President and during his campaign for President. The prominent instance of such support in the current news was his "purchase" of the rights to one of Trump's extra-marital sex partners' story about her liaisons with Trump (is he really big or as good as he claims?). The purchase was to help Trump by getting the rights to the story and then burying it -- called "catch and kill."
Readers will recall that Trump's long-time personal attorney who was active in paying to suppress such stories pled guilty to campaign finance crimes. See The Michael Cohen Information and Plea - Some Comments (Federal Tax Crimes Blog 8/21/18), here; and The Tax View of the Hush Money Payments and Cohen's Reimbursements and Bonus (Federal Tax Crimes Blog 8/21/18), here. One of the suppressions related to the one that Pecker had National Enquirer "catch and kill." As reported in the news, apparently, Pecker was doing Trump's bidding in that activity. The news now reports that Pecker has obtained immunity from the prosecutors, presumably the prosecutors on the Cohen prosecution in USAO SDNY, rather than the Special Counsel. Jim Rutenberg and Rebecca R. Ruiz, David Pecker, Chief of National Enquirer’s Publisher, Is Said to Get Immunity in Trump Inquiry (NYT 8/23/18), here.
This offers an opportunity to talk about immunity in white collar crime cases such as we have under the Trump penumbra. There are various shades of immunity, and I will get into that below in summary and a cut and paste from my Federal Tax Crimes book. At this point, let me preface the discussion of immunity by noting that obtaining an immunity agreement is a contractual negotiation, not dissimilar to a plea negotiation. The issue is how strong a party's perception of the other party's hand is. Prosecutors will not agree to a strong form of immunity unless, by giving that strong form of immunity, the immunized party will give information that the prosecutors need, usually to nail a bigger fish. With that spare introduction, let's talk about the forms of immunity. At the end of this blog, in addition to offering links to other blog entries on immunity, I will offer a cut and paste of the discussion of immunity in the working draft my Federal Tax Crimes Book (if I ever publish it again). But, here is the thumbnail summary.
The types of immunity in the federal criminal universe are (I usually present these from the strongest to the weakest, and will us that ordering here):
1. Transactional immunity. Transactional immunity can be either blanket (extremely rare) or, for crimes within the scope of the testimony the witness will give (rare). In the federal criminal universe, transactional immunity, either general or specific is rarely given. Transactional immunity is not granted by federal statute. So, it has to be stated in the "contract." A subset of this would be a nonprosecution agreement that has been the topic of many blog entries here. But, there is no indication that Pecker was given a nonprosecution agreement by that name.
2. Use and Derivative Use Immunity. This immunity which can be granted via the statute (a judge grants this immunity) or by agreement with the prosecutor assures the witness that the testimony he gives and any leads that might be derived from the testimony will not be used by the prosecutor to prosecute him for a crime. This type of immunity is also not common, but one would say not rare (except in the SDNY which, in my experience and understanding through the white collar grapevine) seems to have a visceral answer of no to requests for this type of immunity). This type of immunity still permits prosecution for the crime, but the prosecutor will have to establish in what is called a Kastigar hearing that the prosecution is not based directly or indirectly from the immunized testimony or the fruits of the immunized testimony. That is usually so difficult that, as a practical matter, use and derivative use immunity is virtually transactional immunity for the crimes within the scope of the investigation.
3. Use Immunity. This type of immunity prevents the use of the immunized testimony, but permits the use of any evidence that the prosecutor learned from leads based on the immunized testimony. This is a weak form of immunity. This is the type of immunity usually offered, if at all, by USAO SDNY. Of course, if someone has something major to offer the prosecutors, I am sure a stronger form of immunity can be negotiated. (I have never been in a position to offer something major to prosecutors in my limited contact with USAO SDNY.) This type of immunity is contractual and the terms of the contract may vary. The USAO SDNY has a standard "contract" which offers the witness very limited, if any immunity. But, since it does offer some immunity, the "contract" is often called a Queen for a Day agreement. Use immunity, or Queen for a Day, agreements are used in connection with proffer sessions whereby the witness who may be a subject or target is interview for up to a day (sometimes more than one day) by the prosecutors. Sol Wisenberg has a good discussion in his posting, Queen For A Day: The Dangerous Game of Proffers, Proffer Agreements and Proffer Letters, here.
It is not clear from the articles I have read which type of immunity Pecker received. It is at least suggested in the news stories that he has a plethora of information damaging to Trump. E.g. Jeff Horwitz, AP: National Enquirer’s safe held damaging Trump stories (WAPO 8/23/18), here. If that is true, he had some bargaining strength in the immunity negotiations. If his testimony was needed to only put maximum pressure on Cohen for Cohen's plea, then it may have been Use and Derivative Use Immunity. If, in addition, he offered up very damaging information on Trump that the prosecutors did not think they could get otherwise (or could not get otherwise without expending more resources than appropriate), perhaps he received some type of transactional immunity (either general or specific). I just don't know.
Now, for those of you wanting a deeper dive into the nuances of immunity, I offer a cut and paste from the most recent working draft version of my Federal Tax Crimes book. The most recent version (with footnotes) is here. This is from a working draft that I revise periodically from the last published edition. The last published edition is here; Townsend, John A., Federal Tax Crimes, 2013 (February 5, 2013). Available at SSRN: https://ssrn.com/abstract=2212771 (See discussion beginning on p. 590, although readers should note subsequent revisions, indicated by redline, in the working draft linked above)
(1) Types of Immunity.
(a) Transactional Immunity.
Transactional immunity is complete immunity with respect to the transaction or offense to which the statements relate. There is no statutory basis for transactional immunity; hence, it must be obtained by agreement or not at all. This is the best form of immunity, and is rarely obtained in the federal system (except sometimes through prosecutor error). Here, the terms of the contract are critical.
To use an example, let’s say that the witness is a taxpayer who, along with others, had a common plan (conspiracy) to evade their taxes and that the prosecution against the taxpayer could be brought in at least two districts and, depending upon the facts, perhaps in more districts. Nevertheless, the investigation is centered in one of the districts, and the prosecutor thinks that he needs the witness’ testimony to nail the others who he feels are more culpable in the scheme. The witness’ lawyer’s opening position is that the witness must have transactional immunity as to stated crimes and all crimes that may be derived from his client’s information. The prosecutor will resist, insisting that he has no authority to grant that form of immunity. He will say, for example, that his U.S. Attorney does not allow it, so that it is a non-starter. Let’s assume that, due to the unique facts of the case, the prosecutor then determines that the witness’ testimony is indeed critical to the prosecution he desires to make and therefore is willing to grant transactional immunity. (This is a critical assumption because the facts would have to be unusual indeed for the prosecutor to grant the broader immunity when he can force more limited statutory immunity discussed below.) In that event, so long as the witness performs his obligations under the contract, the witness will have the transactional immunity conferred by agreement. But at least think about how to make that agreement binding on other U.S. Attorneys than the district in which the prosecutor acts as an AUSA.
(b) Derivative Use Immunity.
This is the mid-way point, and, as we see from the Kastigar discussion later in this section, is conceptualized as co-extensive with the Fifth Amendment privilege. The Fifth Amendment privilege may, as noted above, be asserted as to testimony that is not only itself incriminating but that might lead to incriminating information. This type of immunity prevents the prosecutor from (i) directly using the testimony given and (ii) indirectly using the testimony to develop evidence that can be used. In the order presented, therefore, the immunity is (i) direct use immunity and (ii) indirect or derivative use immunity.
At the risk of redundancy and for clarity in my presentation, I will adopt conventions for referring to these types of immunity. Direct use immunity, which I discuss below, means only prohibiting the prosecutor from directly using the statements given pursuant to immunity. Derivative use immunity means prohibiting the prosecutor from using leads developed from the testimony. As interpreted and applied, derivative use immunity will always include use immunity. The reverse is not true. Direct use immunity (as defined) can stand alone without derivative use immunity. Hence, when I refer to derivative use immunity, I mean the combination of use and derivative use immunity. (For this reason, the concept is sometimes referred to as use and derivative use immunity.) I do caution readers, however, that this convention is not mainstream. References to use immunity often include derivative use immunity. So, I caution readers to be careful in this area.
(c) Direct Use Immunity.
From the defendant’s perspective, this is the worst form of immunity and, correspondingly, from the prosecutor’s perspective, the best if immunity has to be given at all. This form of immunity prohibits direct use of the testimony given . It does not prohibit indirect – or “derivative” – use of leads derived from the testimony. Because of significant prosecutorial limitations on derivative use immunity, if the prosecutor is inclined to offer immunity at all, it will usually be direct use immunity. Statutory immunity is derivative use immunity, so direct use immunity is available only by agreement with the prosecutor. Please review at this point discussion of negotiating plea agreements and proffers at p. 400. In those materials, you will see that FRE Rule 410(3) grants a type of direct use immunity but the example proffer letter from the United States Attorney for the Southern District of New York limits by contract even those benefits.
DOJ Tax confers by policy statement a type of direct use immunity for “vicarious admissions” made by an attorney for a person under consideration for tax indictment. In order to encourage effective conferences and free-flowing dialog in the DOJ Tax consideration of recommendations for tax indictments, DOJ Tax commits to attorneys representing targets that it will not use admissions by the attorney against the client.
(2) Statutory Immunity.
(a) Statutory Immunity - Government Option.
18 U.S.C. §§ 6002 and 6003 provide a method for the prosecutor to obtain a court or administrative agency order conferring derivative use immunity that forces a witness to testify. The Fifth Amendment privilege against self incrimination issue is avoided by conferring immunity that assures “no testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order.” This “statutory immunity” is derivative use immunity.
In court proceedings, this statute is invoked upon application of the U.S. Attorney for the district to the district court which “shall issue” an immunity order; in agency proceedings, the Attorney General must approve an immunity order issued by the agency. In each case, the application must certify that the information thus immunized “necessary to the public interest” and that the person has refused or is likely to refuse to testify based on the Fifth Amendment privilege.
The following provision of the U.S.A.M. gives prosecutors’ very general guidance on when to seek statutory immunity for a witness:
9-23.210 Decision to Request Immunity—The Public InterestThese factors are not intended to be all-inclusive or to require a particular decision in a particular case. They are, however, representative of the kinds of factors that should be considered when deciding whether to seek immunity.
Section 6003(b) of Title 18, United States Code, authorizes a United States Attorney to request immunity when, in his/her judgment, the testimony or other information that is expected to be obtained from the witness "may be necessary to the public interest." Some of the factors that should be weighed in making this judgment include:
A. The importance of the investigation or prosecution to effective enforcement of the criminal laws;
B. The value of the person's testimony or information to the investigation or prosecution;
C. The likelihood of prompt and full compliance with a compulsion order, and the effectiveness of available sanctions if there is no such compliance;
D. The person's relative culpability in connection with the offense or offenses being investigated or prosecuted, and his or her criminal history;
E. The possibility of successfully prosecuting the person prior to compelling his or her testimony;
F. The likelihood of adverse collateral consequences to the person if he or she testifies under a compulsion order.
I don’t dwell further here on statutory immunity because it is only rarely used and pretty much outside the control of the lawyer for the witness. Although I don’t deal with statutory immunity in greater detail, I do note that key cases in the Fifth Amendment analysis – most importantly Hubbell – arose in the context of grants of statutory immunity and the derivative use limitation of the prosecutors’ use of the compelled testimony as a result of grant of statutory immunity.
(b) Statutory Immunity - Defense Request.
The foregoing deals with situations where the prosecutors need the confer immunity to obtain testimony. Normally, we would expect that the prosecutors would exercise it discretion to seek immunity wisely and in the interests of justice. It should be at least conceivable that the interests of justice might be served if the recalcitrant witness has testimony that could help the defendant. Will the prosecutors then confer immunity to offer the defense this important tool? Or, to state it another way, would the prosecutors refuse a request to immunize the testimony of a third party witness in order to gain a tactical advantage in its quest to convict the defendant?
The prosecutors' refusal to grant statutory immunity to a potential witness favorable to the defense could tilt what might otherwise be a relatively level playing field – dare I say fair playing field – in favor of the prosecutors. The conventional wisdom, discussed below, is that the prosecutors cannot be compelled to confer statutory immunity.
There is a potential attack on prosecutors’ intransigence. The defense could move the court to order the Government to confer statutory immunity under 18 USC Section 6003, on the ground that its refusal to do so is, under the circumstances, improper, rising to the level of a due process violation or even exercise an inherent due process inspired authority to itself enter the immunity order without the request of the prosecutor. In the leading case, the Third Circuit reasoned:
Grant of judicial immunity impact most directly on the government's decision to prosecute and on the manner of its prosecution. Frequently, the government will have a legitimate interest in prosecuting the very witness whom the defendant seeks to immunize. But this does not mean that no accommodation can be reached between the government's interest as prosecutor and the defendant's constitutional right to present an effective and entire case. In many instances, use immunity, which was all that was sought here and is all that is constitutionally required, Kastigar v. United States, 406 U.S. 441 (1972), is virtually costless to the government. For example, the government may have already assembled all the evidence necessary to prosecute the witness independent of the witness' testimony. Or the government may be able to "sterilize" the testimony of the immunized witness and so isolate it from any future testimony of the witness that it would not trench upon any of the witness' constitutional rights if he were subsequently to be prosecuted. See Kastigar v. United States, supra. Finally, the government may seek a postponement of the defendant's trial so that it may complete its investigation of the defense witness who is the subject of an immunity application. While these options are not intended to be all inclusive, if any of these options are available to the government, then it would appear to us that the government would have no significant interests which countervail the defendant's due process rights. Any interest the government may have in withholding immunity in such a situation would be purely formal, possibly suspect and should not, without close scrutiny, impede a judicial grant of immunity.
On the other hand, where the government either rebuts the defendant's showing or establishes that the public interest would be disserved by a grant of immunity to a defense witness or that such a grant would entail significant costs to it, it would be appropriate for the immunity application to be denied. In either event, whether it grants or denies the application, the district court should be careful to explain the basis of its ruling. We hold that, in cases where the government can present no strong countervailing interest, a court has inherent authority to immunize a witness capable of providing clearly exculpatory evidence on behalf of a defendant who has met our stated conditions.Although the Third Circuit approved this limited right, courts are quite reluctant to grant such immunity in the absence of a voluntary request by the prosecutors. As the Second Circuit recently reiterated, “The situations in which the United States is required to grant statutory immunity to a defense witness are few and exceptional.” Indeed, continued the Second Circuit, “[s]o few and exceptional are they that, in the nearly thirty years since establishing a test for when immunity must be granted, we have yet to reverse a failure to immunize.” And, continued the Second Circuit, the right to this extraordinary benefit to the defense requires three findings which the defense must establish:
(1) "[T]he government has engaged in discriminatory use of immunity to gain a tactical advantage or, through its own overreaching, has forced the witness to invoke the Fifth Amendment";In Ferguson, the Second Circuit found in the fact circumstances that the district court had not abused its discretion.
(2) "[T]he witness' testimony will be material, exculpatory and not cumulative"; and
(3) The testimony "is not obtainable from any other source."
In a factually unusual case, the Ninth Circuit posited that compelled immunity might be required in the following circumstances:
We now hold that for a defendant to compel use immunity the defendant must show that: (1) the defense witness's testimony was relevant; and (2) either (a) the prosecution intentionally caused the defense witness to invoke the Fifth Amendment right against self-incrimination with the purpose of distorting the fact-finding process; or (b) the prosecution granted immunity to a government witness in order to obtain that witness's testimony, but denied immunity to a defense witness whose testimony would have directly contradicted that of the government witness, with the effect of so distorting the fact-finding process that the defendant was denied his due process right to a fundamentally fair trial.Despite the near knee jerk reaction to deny such defense requests, trial courts do occasionally grant and appellate courts do affirm such requests. If granted in the march to trial or during the trial, the prosecutors may have limited opportunity to overcome the order, because, if reviewed at all, it will be reviewed under the same abuse of discretion standard that forecloses relief in most cases when defendants appeal a trial court denial of the defense request for an immunity order.
Given that there is a split in approaches among the Circuits, there is some possibility that the Supreme Court may address the issue and at least bring some cohesion to the subject.
Finally, there is a further nuance. The issue was presented on petition for certiorari whether a witness’ testimony given after the trial when he refused to give it for trial constitutes newly discovered evidence under FRCrP Rule 33.
(3) Non-Statutory Immunity by Contract.
Non-statutory immunity is obtained by agreement rather than by the statute. The agreement is effectively a contract between the compelled witness and the prosecutor. Non-statutory immunity is by far the more commonly used form of immunity. The negotiation for non-statutory immunity is simply a contract negotiation. Given the stakes, of course, the negotiation requires the most careful attention by practitioners. The IRS cannot use the non-statutory immunity, although it might be estopped by the conduct of its agents if the facts indicated that assurances rising to the level were given albeit without authority.
Non-statutory immunity involves the interplay between the Government’s need for information and the witness’s Fifth Amendment right not to provide incriminating information. The drill is a negotiation to determine what the Government is willing to “pay” for the information. The negotiation becomes a prototypical free-market negotiation – what does the witness have (or what does the Government think the witness has) that the Government is willing to pay for? The Government’s currency in this negotiation is its power to negotiate limitations upon its right or ability to prosecute the witness. That negotiation, if successful, results in immunity. As I hope you sense, that negotiation is a contract negotiation, although there is a form of enforced immunity contract that the Government can get from a court.
The negotiations usually go like this (or some variation thereof): There will be some preliminary posturing between the parties in which the witness’s lawyer insists that his client has information (of uncertain precise content) that the Government needs badly (hence willing to pay more), and the prosecutor insists that the witness’s information is important (otherwise they wouldn’t be talking) but not critical (hence, the Government’s negotiating position is that it is willing to pay less). The witness’ lawyer may tantalize the prosecutor with certain portions of the information in an off the record way to lead the prosecutor into thinking the Government’s need is greater (hence willing to pay more than initially offered). The negotiations then either fail, in which case the Government can then either retreat to forced statutory immunity or forget information from that witness, or an agreement is reached.
The terms of the contract are critical. The witness’s lawyer will want the broadest scope possible (unequivocal transactional immunity) or, failing that (as is likely), the best possible use immunity (preferably derivative use) and, if he is lucky, some loose language in the agreement that could support an argument that even broader immunity was given. In any event, the writing, usually in the form of a letter from the prosecutor acknowledged by the witness and his or her lawyer, sets the terms of the contract. My experience is that, when an AUSA is willing to talk immunity, his or her opening (and usually ending) offer is direct use immunity and then the negotiation is how limited that direct use immunity really is, often specifically reserving the right to use the testimony for impeachment of a defense the witness might raise. Still in appropriate cases, derivative use immunity can be negotiated. And, if there is doubt in the “contract” as to whether direct use or derivative use immunity was conferred, derivative use immunity will be presumed.
Whatever the scope of the immunity granted, the prosecutor, usually not knowing precisely what the witness has to offer, will want some out in the event the witness does not have the information upon which the negotiations were predicated or does not cooperate or, worse still, lies or misleads. That will usually be an explicit term of the contract, and should be negotiated if the strength of the witness’s position permits. Often, as in the case of proffers at an early stage of the investigation, the prosecutor is unlikely to offer anything more than a very strict and limited form of direct use immunity.
An additional overlay to the immunity drill is that, usually in the federal system, the negotiation takes place in a particular district with an AUSA who has no authority to bind the entire federal system. Accordingly, the prosecutor’s starting negotiation is likely to be for immunity, in whatever form, only for prosecutions in that particular district. This may not be very comforting to a witness whose potential criminal activity has touched more than that particular district. He or she is not going to feel comforted without some assurance regarding the other districts. But, here again, it becomes a negotiating issue – how strong is the information the witness has (or the Government thinks he has) and how many hoops is the Government willing to jump through to get the information. Assurances from US Attorneys in other districts may be obtained and, sometimes, even assurances from the various criminal sections of DOJ having the practical effect of providing immunity throughout the country.
Just as contracts generally are not required to be in writing to be enforceable, so immunity contracts may conceivably not be in writing. My anecdotal experience is that they are always – let me repeat that – always in writing. While there may be some opportunity to prove and exploit an unwritten agreement, my experience is that (1) the prosecutor almost invariably will initiate the written agreement (often by a standard proffer letter) and (2) rather than being able to anticipate some benefit from uncertainty as to the scope of the agreement, it is better to get it in writing ab initio so that everyone understands and is committed to the scope of the agreement in a way that is readily provable.
Because the prosecutor usually confers this type of immunity via a letter (such as the proffer letter referred to above), this type of immunity is often referred to as “letter immunity.” Other terms used to describe this immunity are “informal immunity” and “hip pocket immunity.” All of this is meant to distinguish it from statutory immunity. My experience is that, almost invariably, the immunity granted by this type of letter agreement is some variation of direct use immunity rather than the derivative immunity granted by the statute. But, again, it depends upon the negotiating leverage – what does the person have to offer that might encourage the prosecutor to “pay” more.
As discussed earlier, for pre-existing documents, the Fifth Amendment privilege is limited to the testimonial aspects of the act of production. The witness will usually be keenly interested in asserting the act of production doctrine when the underlying documents (as to the contents of which there is no Fifth Amendment privilege) are incriminating. Nevertheless, in those rare cases where the witness is only keenly interested in protecting against the use of testimony inherent in the act of production, counsel for the witness might request immunity as to the testimonial aspects of the act of production. The Government might be more willing to grant that limited scope immunity.
Finally, I have assumed in this discussion that the negotiations are between the prosecutor and the counsel for the witness. It is not conceivable that, from the Government side, a Government agent other than a prosecutor might be involved in negotiations offering the benefit of immunity. The question is whether the counsel for the witness can rely upon any such deal. It is one thing to rely upon the prosecutor, who may not have any statutory authority to grant immunity, but is close enough to the charging process that a court would enforce the immunity granted. Reliance on others elsewhere in the Government criminal enforcement apparatus is dicey indeed. No reasonable defense counsel would rely upon an “immunity” deal he or she might strike with the IRS CI Special Agent in a criminal investigation. That Special Agent may do something that otherwise might cause a subsequent indictment to be dismissed, but it won’t be because he or she had the authority to grant immunity or because the defense counsel reasonably believed he or she had such authority.
(4) Non-Prosecution Agreement.
The strongest form of immunity agreement is the nonprosecution agreement, commonly referred to as “NPA,” where, in return for the witness’s cooperation and testimony, the Government agrees not to prosecute at all (or at all within the scope of the NPA). The other forms of immunity (other than transactional immunity) allow some risk of prosecution if the Kastigar burdens (discussed in the next section) can be cleared by the prosecutor. The non-prosecution agreement precludes this risk within the scope of the agreement. The considerations that go into whether the prosecutors will grant an NPA are similar to those as to whether to seek statutory immunity or grant informal immunity. Obviously, in bargaining parlance, the value of the witness’s testimony will have to be higher to the NPA rather than immunity.
(5) Securing the Benefit of Immunity - Kastigar.
However the witness obtained immunity, the witness will want the benefit of the immunity. Obviously, if the witness has transactional immunity (obtainable only by agreement), a breach of the agreement can be easily spotted and policed. And, after granting direct use immunity (either alone or as a component of derivative use immunity), if direct use is attempted, a defendant can easily spot and police the attempt. It is more difficult to spot breaches of derivative use immunity. What does the witness do if the Government prosecutes the witness on the basis of evidence that the witness believes violates the immunity granted? In conjunction with a bill of particulars, the taxpayer may want to invoke a pretrial hearing process called a Kastigar hearing (named for the case upon which it is based, Kastigar v. United States,).
In Kastigar, the Supreme Court considered whether the United States Government may compel testimony from an unwilling witness given direct use and derivative use immunity under the immunity statute or, on the other hand, may be compelled only by conferring transactional immunity. The Court reasoned:
The constitutional inquiry, rooted in logic and history, as well as in the decisions of this Court, is whether the immunity granted under this statute is coextensive with the scope of the privilege. If so, petitioners’ refusals to answer based on the privilege were unjustified, and the judgments of contempt were proper, for the grant of immunity has removed the dangers against which the privilege protects. * * * * If, on the other hand, the immunity granted is not as comprehensive as the protection afforded by the privilege, petitioners were justified in refusing to answer, and the judgments of contempt must be vacated. * * * *.
Petitioners draw a distinction between statutes that provide transactional immunity and those that provide, as does the statute before us, immunity from use and derivative use. They contend that a statute must at a minimum grant full transactional immunity in order to be coextensive with the scope of the privilege. In support of this contention, they rely on Counselman v. Hitchcock, 142 U.S. 547 (1892), the first case in which this Court considered a constitutional challenge to an immunity statute. * * * *.
[I omit the Court’s discussion of Congressional enactment of transactional immunity statute in reaction to Counselman.]
This transactional immunity statute became the basic form for the numerous federal immunity statutes until 1970, when, after re-examining applicable constitutional principles and the adequacy of existing law, Congress enacted the statute here under consideration. The new statute, which does not “afford [the] absolute immunity against future prosecution” referred to in Counselman, was drafted to meet what Congress judged to be the conceptual basis of Counselman, as elaborated in subsequent decisions of the Court, namely, that immunity from the use of compelled testimony and evidence derived therefrom is coextensive with the scope of the privilege.
The statute’s explicit proscription of the use in any criminal case of “testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information)” is consonant with Fifth Amendment standards. We hold that such immunity from use and derivative use is coextensive with the scope of the privilege against self-incrimination, and therefore is sufficient to compel testimony over a claim of the privilege. While a grant of immunity must afford protection commensurate with that afforded by the privilege, it need not be broader. Transactional immunity, which accords full immunity from prosecution for the offense to which the compelled testimony relates, affords the witness considerably broader protection than does the Fifth Amendment privilege. The privilege has never been construed to mean that one who invokes it cannot subsequently be prosecuted. Its sole concern is to afford protection against being “forced to give testimony leading to the infliction of ‘penalties affixed to . . . criminal acts.’” Immunity from the use of compelled testimony, as well as evidence derived directly and indirectly therefrom, affords this protection. It prohibits the prosecutorial authorities from using the compelled testimony in any respect, and it therefore insures that the testimony cannot lead to the infliction of criminal penalties on the witness.
Our holding is consistent with the conceptual basis of Counselman. The Counselman statute, as construed by the Court, was plainly deficient in its failure to prohibit the use against the immunized witness of evidence derived from his compelled testimony. [Support from Counselman opinion omitted]The basis of the Court’s decision was recognized in Ullmann v. United States, 350 U.S. 422 (1956), in which the Court reiterated that the Counselman statute was insufficient:
“because the immunity granted was incomplete, in that it merely forbade the use of the testimony given and failed to protect a witness from future prosecution based on knowledge and sources of information obtained from the compelled testimony.” Id., at 437. (Emphasis supplied.)
* * * *. The broad language in Counselman relied upon by petitioners was unnecessary to the Court’s decision, and cannot be considered binding authority.
* * * *.
In Murphy v. Waterfront Comm’n, 378 U.S. 52 (1964), the Court carefully considered immunity from use of compelled testimony and evidence derived therefrom. The Murphy petitioners were subpoenaed to testify at a hearing conducted by the Waterfront Commission of New York Harbor. After refusing to answer certain questions on the ground that the answers might tend to incriminate them, petitioners were granted immunity from prosecution under the laws of New Jersey and New York. They continued to refuse to testify, however, on the ground that their answers might tend to incriminate them under federal law, to which the immunity did not purport to extend. They were adjudged in civil contempt, and that judgment was affirmed by the New Jersey Supreme Court.
The issue before the Court in Murphy was whether New Jersey and New York could compel the witnesses, whom these States had immunized from prosecution under their laws, to give testimony that might then be used to convict them of a federal crime. Since New Jersey and New York had not purported to confer immunity from federal prosecution, the Court was faced with the question what limitations the Fifth Amendment privilege imposed on the prosecutorial powers of the Federal Government, a nonimmunizing sovereign. After undertaking an examination of the policies and purposes of the privilege, the Court overturned the rule that one jurisdiction within our federal structure may compel a witness to give testimony which could be used to convict him of a crime in another jurisdiction. The Court held that the privilege protects state witnesses against incrimination under federal as well as state law, and federal witnesses against incrimination under state as well as federal law. Applying this principle to the state immunity legislation before it, the Court held the constitutional rule to be that:
“[A] state witness may not be compelled to give testimony which may be incriminating under federal law unless the compelled testimony and its fruits cannot be used in any manner by federal officials in connection with a criminal prosecution against him. We conclude, moreover, that in order to implement this constitutional rule and accommodate the interests of the State and Federal Governments in investigating and prosecuting crime, the Federal Government must be prohibited from making any such use of compelled testimony and its fruits.” n43 378 U.S., at 79.
n43 At this point the Court added the following note: “Once a defendant demonstrates that he has testified, under a state grant of immunity, to matters related to the federal prosecution, the federal authorities have the burden of showing that their evidence is not tainted by establishing that they had an independent, legitimate source for the disputed evidence.” Id., at 79 n. 18. If transactional immunity had been deemed to be the “constitutional rule” there could be no federal prosecution.
The Court emphasized that this rule left the state witness and the Federal Government, against which the witness had immunity only from the use of the compelled testimony and evidence derived therefrom, “in substantially the same position as if the witness had claimed his privilege in the absence of a state grant of immunity.” Ibid.
* * * *
[B]oth the reasoning of the Court in Murphy and the result reached compel the conclusion that use and derivative-use immunity is constitutionally sufficient to compel testimony over a claim of the privilege. Since the privilege is fully applicable and its scope is the same whether invoked in a state or in a federal jurisdiction, the Murphy conclusion that a prohibition on use and derivative use secures a witness’ Fifth Amendment privilege against infringement by the Federal Government demonstrates that immunity from use and derivative use is coextensive with the scope of the privilege. As the Murphy Court noted, immunity from use and derivative use “leaves the witness and the Federal Government in substantially the same position as if the witness had claimed his privilege” in the absence of a grant of immunity. The Murphy Court was concerned solely with the danger of incrimination under federal law, and held that immunity from use and derivative use was sufficient to displace the danger. This protection coextensive with the privilege is the degree of protection that the Constitution requires, and is all that the Constitution requires even against the jurisdiction compelling testimony by granting immunity.
* * * *
Petitioners argue that use and derivative-use immunity will not adequately protect a witness from various possible incriminating uses of the compelled testimony: for example, the prosecutor or other law enforcement officials may obtain leads, names of witnesses, or other information not otherwise available that might result in a prosecution. It will be difficult and perhaps impossible, the argument goes, to identify, by testimony or cross-examination, the subtle ways in which the compelled testimony may disadvantage a witness, especially in the jurisdiction granting the immunity.
This argument presupposes that the statute’s prohibition will prove impossible to enforce. The statute provides a sweeping proscription of any use, direct or indirect, of the compelled testimony and any information derived therefrom:
“No testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case . . . .” 18 U. S. C. § 6002.
This total prohibition on use provides a comprehensive safeguard, barring the use of compelled testimony as an “investigatory lead,” and also barring the use of any evidence obtained by focusing investigation on a witness as a result of his compelled disclosures.
A person accorded this immunity under 18 U. S. C. § 6002, and subsequently prosecuted, is not dependent for the preservation of his rights upon the integrity and good faith of the prosecuting authorities. As stated in Murphy:
“Once a defendant demonstrates that he has testified, under a state grant of immunity, to matters related to the federal prosecution, the federal authorities have the burden of showing that their evidence is not tainted by establishing that they had an independent, legitimate source for the disputed evidence.” 378 U.S., at 79 n. 18.
This burden of proof, which we reaffirm as appropriate, is not limited to a negation of taint; rather, it imposes on the prosecution the affirmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony.This is very substantial protection, commensurate with that resulting from invoking the privilege itself. The privilege assures that a citizen is not compelled to incriminate himself by his own testimony. It usually operates to allow a citizen to remain silent when asked a question requiring an incriminatory answer. This statute, which operates after a witness has given incriminatory testimony, affords the same protection by assuring that the compelled testimony can in no way lead to the infliction of criminal penalties. The statute, like the Fifth Amendment, grants neither pardon nor amnesty. Both the statute and the Fifth Amendment allow the government to prosecute using evidence from legitimate independent sources.
The statutory proscription is analogous to the Fifth Amendment requirement in cases of coerced confessions. A coerced confession, as revealing of leads as testimony given in exchange for immunity, is inadmissible in a criminal trial, but it does not bar prosecution. Moreover, a defendant against whom incriminating evidence has been obtained through a grant of immunity may be in a stronger position at trial than a defendant who asserts a Fifth Amendment coerced-confession claim. One raising a claim under this statute need only show that he testified under a grant of immunity in order to shift to the government the heavy burden of proving that all of the evidence it proposes to use was derived from legitimate independent sources. On the other hand, a defendant raising a coerced-confession claim under the Fifth Amendment must first prevail in a voluntariness hearing before his confession and evidence derived from it become inadmissible.
There can be no justification in reason or policy for holding that the Constitution requires an amnesty grant where, acting pursuant to statute and accompanying safeguards, testimony is compelled in exchange for immunity from use and derivative use when no such amnesty is required where the government, acting without colorable right, coerces a defendant into incriminating himself. We conclude that the immunity provided by 18 U. S. C. § 6002 leaves the witness and the prosecutorial authorities in substantially the same position as if the witness had claimed the Fifth Amendment privilege. The immunity therefore is coextensive with the privilege and suffices to supplant it. The judgment of the Court of Appeals for the Ninth Circuit accordingly is affirmed.
Note on Kastigar
Kastigar approved a process whereby if a Government desires to prosecute a witness who has been compelled to testify under derivative use immunity, the Government must, upon the witness’s request, demonstrate that it has made no direct or indirect use of the immunized testimony. The process is described as follows:
When the government proceeds to prosecute a previously immunized witness, it has “the heavy burden of proving that all of the evidence it proposes to use was derived from legitimate independent sources.” Kastigar, 406 U.S. at 461-62. The Court characterized the government's affirmative burden as "heavy." Most courts following Kastigar have imposed a “preponderance of the evidence” evidentiary burden on the government. The Court analogized the statutory restrictions on use immunity to restrictions on the use of coerced confessions, which are inadmissible as evidence but which do not prohibit prosecution. Kastigar, 406 U.S. at 461. The Court pointed out, however, that the “use immunity” defendant may “be in a stronger position at trial” than the “coerced confession” defendant because of the different allocations of burden of proof. Id.
A trial court must normally hold a hearing (a “Kastigar hearing”) for the purpose of allowing the government to demonstrate that it obtained all of the evidence it proposes to use from sources independent of the compelled testimony. As this Court pointed out in United States v. De Diego, 167 U.S. App. D.C. 252, 511 F.2d 818, 823-24 (D.C. Cir. 1975), a trial court may hold a Kastigar hearing pre-trial, post-trial, mid-trial (as evidence is offered), or it may employ some combination of these methods. A pre-trial hearing is the most common choice.
Whenever the hearing is held, the failure of the government to meet its burden can have most drastic consequences. One commentator has stated that “if the tainted evidence was presented to the grand jury, the indictment will be dismissed; when tainted evidence is introduced at trial, the defendant is entitled to a new trial. [Defendants] are afforded similar protections against nonevidentiary uses of immunized testimony.” Immunity at 1179 (footnotes omitted).
Dismissal of the indictment or vacation of the conviction is not necessary where the use is found to be harmless beyond a reasonable doubt.
A district court holding a Kastigar hearing “must make specific findings on the independent nature of this proposed [allegedly tainted] evidence.” Because the burden is upon the government, the appellate court "may not infer findings favorable to it on these questions.” A district court's determination that the government has carried its burden of showing independent sources is a factual finding that is subject to review under the “clearly erroneous” standard.
As the Kastigar Court noted, the ability to make the Government prove that it has lived up to the bargain is a substantial protection, for the Government often cannot establish that it did not improperly rely upon the immunized testimony. Indeed, some have noted that derivative use immunity may have the practical effect of transactional immunity. The substantial burden will often discourage the Government from even seeking an indictment and, if it does obtain an indictment, the Court may shut the Government out in a Kastigar hearing.
The problems inherent in the Kastigar hearing are the principal reason that federal prosecutors resist conferring derivative use immunity by agreement and are loath to seek statutory immunity. Still, if the witness’ bargaining position is strong, the obtaining of derivative use immunity can effectively prevent the Government from attempting a prosecution where it anticipates that it will have significant Kastigar problems. A practitioner who stands his or her ground and obtains derivative use immunity may thus have insulated the witness from prosecution.
Finally, because of this practical effect of immunity, the USAM provides the following procedures for prosecutors who think there is some realistic possibility that the immunized witness – whether immunized by immunity order or by letter immunity – should be prosecuted. These steps are designed to meet Kastigar’s requirement that the prosecution be based on information that was not derived from the immunized testimony:
1. Before the witness testifies, prepare for the file a signed and dated memorandum summarizing the existing evidence against the witness and the date(s) and source(s) of such evidence;
2. Ensure that the witness's immunized testimony is recorded verbatim and thereafter maintained in a secure location to which access is documented; and
3. Maintain a record of the date(s) and source(s) of any evidence relating to the witness obtained after the witness has testified pursuant to the immunity order.
(6) Is Kastigar Limited to Compelled Testimony?
The question has arisen whether the Kastigar protections are available for other types of privileged information the prosecutors may possess and be tempted to use. For example, the prosecutors may have obtained by search warrant documents (including emails) that are subject to the attorney-client privilege or the patient-doctor privilege. Where that happens, can a charged defendant put the prosecutors to a Kastigar-like hearing were they must prove that their case is untainted by the privileged information in their possession? Only two courts of appeals appear to have spoken on this issue and their answer is no. Those courts are persuaded that the Fifth Amendment constitution protection for compelled testimony sets such testimony apart from ordinary testimonial or evidentiary privileges. (Although the Kastigar protections are not available for nonconstitutional privileged documents in the Government’s possession, a defendant confronting the possible misuse of such privileged information may still object at trial or, if concerned enough, may file a motion in limine to flesh out the issue prior to trial; in either of these situations, of course, the prosecutors will not bear the more onerous Kastigar burdens.)
d. Prosecution Selective Grant of Immunity.
A problem with the prosecutors’ control over immunity grants is that the prosecutors may use the power selectively to obtain testimony in the criminal trial that supports the prosecution but refuse to give it to witnesses who might be willing to testify favorably to the defense but decline to do so without a grant of immunity. The Second Circuit recently addressed this issue as follows (United States v. Ebbers, 458 F.3d 110, 118-119 (2d Cir. 2006)):
The government is under no general obligation to grant use immunity to witnesses the defense designates as potentially helpful to its cause but who will invoke the Fifth Amendment if not immunized.
A grant of use immunity may well hamper the government in a future prosecution of a witness. In such a prosecution, the government would have to show that the immunized testimony was not the source of any evidence it presents, Kastigar v. United States, 406 U.S. 441, 460 (1972), and that the testimony of government witnesses was not tainted by their knowledge of the immunized testimony. Although the government may gain protection in completed investigations by establishing a record of the evidence collected before the immunized testimony is given, it may have difficulty shielding all its potential witnesses from that testimony.
However, the ability to give immunity to one witness but not another is a potentially powerful tool for a prosecutor, particularly in light of the prosecutor's ability to create incentives for witnesses to invoke the privilege against self-incrimination. There are, therefore, limits on the government's use of immunity.
In an extreme case, a court might hold that the absence of the non-immunized witness caused the government's evidence to fall short of proof beyond a reasonable doubt. In addition, a court may order the prosecution to choose between forgoing the testimony of an immunized government witness or granting use immunity to potential defense witnesses. To obtain such an order, a defendant must make a two-pronged showing.
First, the defendant must show that the government has used immunity in a discriminatory way, has forced a potential witness to invoke the Fifth Amendment through “overreaching,” or has deliberately denied “immunity for the purpose of withholding exculpatory evidence and gaining a tactical advantage through such manipulation.”
We have said that a discriminatory grant of immunity arguably may be no more than “a decision . . . to confer immunity on some witnesses and not on others.” However, it may also be the case that the immunity decisions in question are so obviously based on legitimate law enforcement concerns -- e.g., granting immunity to a witness who has pleaded guilty and has been sentenced to substantial jail time while denying it to a principal target of the ongoing criminal investigation -- that it is clear that a court cannot intervene without substantially hampering the administration of justice.
Prosecutorial “overreaching” can be shown through the use of “threats, harassment, or other forms of intimidation [which have] effectively forced the witness to invoke the Fifth Amendment.” The “manipulation” standard overlaps to a degree with the discrimination test but involves an express finding of a tactical purpose on the government's part.
Second, the defendant must show that the evidence to be given by an immunized witness “will be material, exculpatory and not cumulative and is not obtainable from any other source.” In that regard, exculpatory evidence is material when it “tends to show that the accused is not guilty.” The bottom line at all times is whether the non-immunized witness's testimony would materially alter the total mix of evidence before the jury.
The showing is particularly hard to make as the further discussion in Ebbers shows.
This issue can also arise in a civil tax proceeding where, since the taxpayer’s liberty is not at stake, the problem is less exacerbated. Where I have seen this issue arise in my practice is in the abusive tax shelter context where the Government has prosecuted some enablers of major tax shelter offerings but did not prosecute all. If the taxpayer in a civil proceeding regarding its tax liability feels that the testimony of either a prosecuted enabler or an unindicted enabler is necessary or helpful, the enabler may assert the Fifth Amendment to avoid giving testimony. The Tax Court has held by order (rather than Tax Court decision) that, although the Government could not be required to grant immunity, the Tax Court was not powerless to remedy some of the imbalance created by the unavailability of the evidence from the enabler. The Court ordered that the IRS would bear the burden of proof. Another possible remedy might be to stay the civil proceeding until the enabler was no longer at criminal jeopardy because of the expiration of the statute of limitations, but courts are generally reluctant to indefinitely postpone resolution of cases on a docket and, as noted elsewhere in this book with respect to statutes of limitations, precisely when they close and what keeps them open may be uncertain.
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