Category: Speech or Debate

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Two lobbyists and a congressional staffer walk into a strip club called Privilege

This is surely the start of an awesome joke. Email me when you come up with the rest.

Ok, I could have entitled this “D.C. Circuit issues mildly interesting decision on the Speech or Debate Privilege,” but then you wouldn’t be reading it, would you?

Anyway, the court just issued this decision upholding the conviction of Frasier Verrusio, the hapless former policy director for the House Committee on Transportation and Infrastructure, who somehow managed to parlay a night of boring Washington-style debauchery into three felony counts of receiving illegal gratuities.

Basically, there were two lobbyists, Todd Boulanger and James Hirni, who were scheming to get some language inserted into the federal highway bill at the last minute on behalf of a client called United Rentals. They sought assistance from Verrusio and a Senate staffer named Trevor Blackann for this so-called “airmail strategy.” Then the client representative, Todd Ehrlich, snagged some tickets to the first game of the 2003 World Series, and the rest was history:

Hirni invited Blackann and Verrusio to the World Series game and made clear that United Rentals would cover the costs. Both men accepted the invitation. Hirni and Blackann flew to New York together and met Ehrlich there. Over drinks, Blackann described the airmail strategy that he, Verrusio, and the two lobbyists had agreed was “the best course of action.” Shortly thereafter, Verrusio joined them for dinner. According to Hirni, the four men “talked a lot about United Rentals” and “got into a conversation about concepts and ideas United Rentals had for federal legislation.” Verrusio was “the senior guy at the table,” Blackann testified, and was “leading the conversation.” Verrusio “walked them through” the airmail strategy, indicating that it had “the best chance for ultimate success.” Ehrlich paid for the dinner and drinks.

On the way to Yankee Stadium, the chauffeured car carrying the four men stopped at a convenience store, where Hirni bought several small bottles of liquor for the group. The men then went on to the game. On their way out of the stadium, Verrusio signaled to Hirni that he and Blackann wanted souvenir jerseys. Hirni paid for them with his corporate credit card.

After leaving the stadium, the group went to a strip club called Privilege. Hirni paid the cover charge and the cost of drinks, while Ehrlich paid for several lap dances. Hirni also bought Verrusio and Blackann t-shirts from the club. When the group left, they stopped for pizza before returning to their hotel. The next morning, Hirni paid the hotel expenses, and Verrusio, Blackann, and Hirni took a car to the airport and flew to Washington, D.C.

Slip op. at 5-6 (citations omitted).

None of that is particularly important, but I wanted you to know that I didn’t make up the part about the strip club.

So on to the Speech or Debate issue.

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Who is Responsible for the Employer Mandate Delay?

There were a couple of things missing from the testimony regarding the legal merits of the employer mandate delay at Wednesday’s Rules Committee hearing. The first was any reference to the legal authority claimed by the administration when it announced the initial delay of the employer mandate under the Affordable Care Act. This is surprising because Mark Mazur, Assistant Secretary of the Treasury for Tax Policy, was very specific in explaining the legal basis claimed for the administration’s action.

Mazur’s letter of July 9, 2013 to the Honorable Fred Upton, Chairman of the House Energy and Commerce Committee, explains the decision “to provide transition relief with respect to three provisions of the ACA: reporting by certain employers under section 6056 of the Internal Revenue Code (“the Code”); reporting by insurance companies, self-insuring employers, and other entities that provide health coverage under section 6055 of the Code; and the employer shared responsibility provisions under section 4980H of the Code.” This “transition relief” meant “no employer shared responsibility payments will be assessed for 2014,” although employers were “encouraged” to “maintain or expand health coverage for 2014.” IRS Notice 2013-45. In effect, the Treasury Department waived the legal obligation of the employer mandate, which under the ACA was to take effect January 1, 2014, for a one-year period.

Mazur’s letter is succinct with regard to the legal authority for this action: “The Notice is an exercise of the Treasury Department’s longstanding administrative authority to grant transition relief when implementing new legislation like the ACA. Administrative authority is granted by section 7805(a) of the Internal Revenue Code.”

That’s it. That’s the entire claimed legal justification for the employer mandate delay: section 7805(a) of the Internal Revenue Code. But I did not hear that code section mentioned once during all of the Wednesday’s testimony. Instead, there was a good deal of discussion, much of it in fairly vague terms, about general principles of administrative law that recognize some agency discretion to adjust statutory deadlines in a “reasonable” fashion. Whatever the merits of that legal position, it was not the justification offered by the Obama administration to Congress.

Section 7805(a) provides, in its entirety, as follows:

Except where such authority is expressly given by this title to any person other than an officer or employee of the Treasury Department, the Secretary shall prescribe all needful rules and regulations for the enforcement of this title, including all rules and regulations as may be necessary by reason of any alteration of law in relation to internal revenue.

The one thing that is very clear from this language is the identity of the person empowered to prescribe the regulations referred to by the section. It is the Secretary of the Treasury. Not the President. Not the Assistant Secretary for Tax Policy. Not anyone the Secretary might care to designate. Indeed, one might plausibly read the section as not providing substantive regulatory authority at all, but simply as identifying the Secretary as the default authority for issuing all rules and regulations not expressly delegated to another official.

Yet during the entire Rules Committee hearing, I do not believe I heard a single reference to the Secretary, either by name or title. In contrast, there were many, many statements from both the majority and minority side ascribing the relevant decisions to the President.  See, e.g., Written Statement of Simon Lazarus (“[T]he President has authorized a minor temporary course correction regarding individual ACA provisions, necessary in his Administration’s judgment to faithfully execute the overall statute, other related laws, and the purposes of the ACA’s framers. As a legal as well as a practical matter, that’s well within his job description.”).

This is very peculiar. Whatever the scope of the authority provided by Section 7805(a), that authority clearly falls within the Secretary’s job description, not the President’s. Constitutional scholars, of course, have long argued the extent to which department heads and other executive officials can be given legal duties and authorities insulated from presidential oversight (the “unitary executive” debate), but that is a far cry from treating the Secretary of the Treasury as if he were the Charlie McCarthy to the President’s Edgar Bergen (yeah, I know, I’m old).  Hamilton must be turning in his grave.

Moreover, there is no indication in Mazur’s letter to Chairman Upton that President Obama had anything to do with the decision to extend the employer mandate. The letter is rather sketchy on the details of the decision-making process, but it clearly indicates that the impetus for the decision were “concerns about complying with the reporting requirements and the time needed to implement them effectively.” The Treasury Department evidently felt that there was not enough time to implement the reporting obligations of the law in a way that would avoid imposing burdensome or impractical requirements on the business community.  Moreover, Mazur makes it clear that the decision to extend the employer mandate was simply a necessary result of delaying the reporting requirements. See 7-7-13 Letter at 2 (“We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014.”).

If Mazur’s explanation is even close to being true, it is apparent that President Obama could not have played a prominent role in making the decision to extend the employer mandate. Surely no one thinks that Obama was involved in drafting or evaluating the reporting requirements for employers and insurance companies, any more than he was writing code for healthcare.gov. The idea of extending the reporting deadlines, and as a consequence the employer mandate, would have had to originate with the Treasury officials directly responsible for these aspects of the law, and those officials presumably conducted a policy and legal analysis of this alternative among others for consideration by the Secretary of the Treasury. No doubt, given the policy and political importance of the issue, the Secretary presented his decision or proposed decision to the White House for approval, but this should have occurred well after the Treasury Department had thoroughly vetted the issue.

From this it should be apparent that the official accountable to Congress, at least in the first instance, for the decision to delay the employer mandate is Jacob Lew, the Secretary of the Treasury. Any analysis of the House’s remedies with regard to this decision must begin with that understanding.

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The Legislator-Lobbyist Privilege?

We all know that there are certain confidential and intimate relationships that the law deems worthy of special protection. These include the clerical privilege (also known as priest-penitent), the attorney-client privilege, the doctor-patient privilege and of course the spousal privilege. The House of Representatives would like to expand that list to include the legislator-lobbyist relationship, which involves the kind of “pillow talk” that DC considers most precious.

OK, I exaggerate, but not by that much. In its opposition to the SEC subpoena enforcement action, the House argues all the information sought by the SEC, including information about conversations between members or staff of the Ways & Means Committee and private lobbyists, is protected by the Speech or Debate Clause. See House Brief at 30, 34-37.

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SEC v. Ways and Means

As reported by the Wall Street Journal, the Securities and Exchange Commission has filed suit against the House Committee on Ways and Means to enforce subpoenas seeking documents as well as the testimony of Brian Sutter, the committee’s staff director. The subpoenas were issued in the course of the SEC’s “investigating whether material nonpublic information concerning the April 1, 2013 announcement by the U.S. Centers for Medicare and Medicaid Services of 2014 reimbursement rates for the Medicare Advantage program was leaked improperly to certain members of the public in advance of CMS’s announcement, and whether such action resulted in insider trading in violation of the federal securities laws.” Apparently the SEC believes that Sutter may have been one source of information relied on by a Greenberg Traurig lobbyist (presumably Mark Hayes, although he is not named in the complaint) who provided advance notice of the rate announcement to a securities firm.

This has the potential to be a really big deal, both from a legal perspective (the House is resisting the subpoenas on Speech or Debate grounds, among other things) and as a political headache for the House and its leadership. For now, I will just post a copy of the complaint, which is pretty interesting.

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Judge Bates Dismisses Rangel’s Lawsuit

Last week, as expected, Judge Bates dismissed Representative Rangel’s lawsuit against the Speaker, the Clerk and various former members and staff of the Ethics Committee. As the court notes in conclusion, “everything on Rangel’s wish list implicates insurmountable separation-of-powers barriers to the Court’s exercise of authority,” with the “most problematic [being] Rangel’s unprecedented view that this Court may order the House to, in effect, un-censure him.”

This is certainly correct, and I think the court’s 49-page opinion gives Rangel’s arguments rather more attention than they deserve. Dismissal was more than justified by the following points made in the opinion:

  1. Rangel sued the wrong party. The court points out that “Rangel’s reputational harm was not caused by any of the defendants but by the House as an independent body- and it is not a party to this action.” (slip op. at 11)
  2. An order against these defendants would not have redressed Rangel’s alleged injuries because the defendants have no power to alter the House’s Journal (the relief requested by Rangel) on their own. (slip op. at 35)
  3. Even if the House had been a party, the court lacks the power to order the House to take any action that would redress Rangel’s alleged injuries. “This Court has the same ability to order the House to edit its own Journal as it does to order the House to discipline one of its Members or to promulgate a particular Rule- none.” (slip op. at 35-36)
  4. All of the defendants were in any event immune under the Speech or Debate Clause. (slip op. at 36-44)

Unfortunately, Judge Bates was not content to rest his opinion on these points but also engaged in an extensive, unnecessary and rather confusing discussion of the political question doctrine. He concludes that Rangel’s claims are barred by the political question doctrine, but only because Rangel failed to state a viable constitutional claim in the first place. The political question doctrine, however, is designed to identify situations in which a non-judicial body has the final say on a constitutional issue. If it applies only because the court finds no constitutional issue to resolve, invoking the doctrine seems pointless. The court seems to think that directly reviewing Rangel’s claims on the merits, rather than as part of the political question analysis, would evince a “lack of disrespect” (I think it means lack of respect) for the House, but the price of this politeness is to make the political question doctrine even murkier than it is already.

On balance, though, this opinion should stand as a caution against challenging House disciplinary proceedings in court, and that’s a good thing. One final note—someone should bring to the court’s attention that Nixon v. United States, 506 U.S. 224 (1993) involved Judge Nixon, not former President Nixon. See slip op. at 33 (referring to “an ex-President challenging his impeachment in the courts.”).

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Speech or Debate in Congressional Employment Litigation

In June a panel of the D.C. Circuit decided Howard v. Office of the CAO, in which a former congressional employee argued the Speech or Debate Clause did not bar her lawsuit challenging adverse employment action under the Congressional Accountability Act. If it stands, the case resolves a question left open by Fields v. Office of Eddie Bernice Johnson, 459 F.3d 1 (D.C. Cir. 2006) (en banc), appeal dismissed and cert. den. sub nom., Office of Senator Mark Dayton v. Hanson, 550 U.S. 511 (2007). However, the Chief Administrative Officer of the House has petitioned for rehearing en banc, and the D.C. Circuit has ordered Howard to file a response, so it is possible the Howard case will be reheard by the full court.

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Congressional Release of Classified Information and the Disciplinary Power

In reference to my last post, it has been suggested by one of the more faithful commenters at Balkinization, Shag from Brookline, that the Speech or Debate Clause might bar a house of Congress from taking disciplinary action against a member who unilaterally releases classified information without authorization. Shag asks: “Can action by Congress trump the specific Speech and Debate [sic] clause? Is such Speech and Debate permitted to be questioned in a house of Congress with such action but not in any other Place? Does the First Amendment speech clause enhance or detract from the right (privilege) of a member of Congress under the Speech and Debate [sic] clause?” Shag goes on to ask how the original understanding of and historical practice under the Speech or Debate Clause might be applied in the context of “the fairly recently evolved national security state.”

As legal questions go, the ones Shag asks with regard to the Speech or Debate Clause have very straightforward answers. The text of the Clause is clear that it applies only in “any other Place,” i.e., outside the legislative branch. See, e.g., Howard v. Office of the Chief of Administrative Officer, No. 12-5119 (D.C. Cir. June 28, 2013) (“because the Office of Compliance process occurs within the Legislative Branch, not in a ‘other Place,’ the Speech or Debate Clause does not pose an issue in those cases”) (Kavanaugh, J., dissenting); see also United States v. Brewster, 408 U.S. 501, 517-21 (1972) (discussing the fact that misconduct protected by the Speech or Debate Clause may nonetheless be punished by either house under its disciplinary power). As far as I know, no member has ever asserted the Speech or Debate Clause, either as a defense or as a protection against inquiry, in the course of a congressional disciplinary proceeding. Nor has any scholar, court or anyone else with expertise on the Clause suggested that it could apply in a congressional proceeding. Put simply, a member who faces disciplinary action as the result of disclosing classified information can take no solace in the Speech or Debate Clause.

The question with regard to the First Amendment is slightly more complicated. We recently discussed, in the context of the Rangel case, the question of whether and to what extent constitutional protections apply in congressional disciplinary proceedings. As Outside Counsel’s report indicates, even if such protections apply, they cannot be applied in a rigid manner that ignores the unique nature, purpose and history of congressional disciplinary proceedings. Thus, while one can imagine a plausible First Amendment defense in a congressional disciplinary proceeding (say, for example, if the House or Senate sought to punish members who give interviews to a disfavored press outlet), it is unthinkable that the First Amendment would prevent the House and Senate from enforcing rules that are broadly consistent with traditional limitations on member speech. For example, members cannot claim a First Amendment right to violate rules of decorum and debate, by say interrupting another member who has the floor, using foul language in congressional proceedings, or insulting the President.

Is there a colorable argument that disclosure of classified information by a member deserves First Amendment protection from congressional discipline, perhaps because of the importance of such disclosure in checking “the fairly recently evolved national security state”? Put me in the deeply skeptical camp on that one. Both the House and Senate have had specific prohibitions against unauthorized disclosure of classified information for decades. Punishing members for unauthorized disclosure of secret information goes back even further. On December 31, 1810, it is reported: “The Senator from Massachusetts (Mr. Pickering) was censured for reading from confidential documents in the Senate in open session before the injunction of secrecy had been removed.” Riddick’s Senate Procedure 270 n.1. It is hard to imagine the House and Senate intelligence and ethics committees agreeing that individual members have a constitutional right to violate congressional secrecy rules just because they believe the public interest requires it.

Whatever the merits of such a constitutional argument, however, it will be weaker if a member makes it without first attempting to use the established congressional procedures for releasing classified information. This was my original point, and if Professor Ackerman or anyone else disagrees, they should explain why.

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Congressional Release of Classified Information and the Speech or Debate Clause

At Foreign Policy, Professor Bruce Ackerman asks “should members of Congress use their special constitutional powers of free speech to force the facts about the [NSA surveillance program] out into the open?” Ackerman notes that under the Speech or Debate Clause, members of Congress “cannot be prosecuted for reading classified material into the public record– and it is up to them, and them alone, to decide what is worth talking about.” He therefore proposes that individual members of Congress who  oppose the surveillance program, such as Senator Ron Wyden, a member of the Senate Select Committee on Intelligence, disclose such classified information regarding the surveillance program as they believe the public needs to know. Ackerman dramatically concludes “[t]he moment of truth is now.”

Ackerman is certainly correct that the Speech or Debate Clause immunizes members of Congress from prosecution for disclosing classified information on the floor or in committee hearings. See Gravel v. U.S., 408 U.S. 606 (1972). As he also recognizes, however, members are not protected against congressional discipline, up to and including expulsion, for revealing classified information without permission.

What Ackerman overlooks is that both the House and Senate have established procedures for releasing classified information. Wyden, for example, could ask SSCI to disclose information regarding the NSA surveillance program under section 8 of S. Res. 400, which provides that SSCI “may, subject to the provisions of this section, disclose publicly any information in the possession of such committee after a determination by such committee that the public interest would be served by such disclosure.” If SSCI votes for public disclosure, it must then notify and consult with the Senate Majority and Minority Leaders prior to notifying the President of the vote. Once the President has been notified and five days have elapsed, SSCI may release the information to the public unless “the President, personally in writing, notifies the committee that he objects to the disclosure of such information, provides his reasons therefore, and certifies that the threat to the national interest of the United States posed by such disclosure is of such gravity that it outweighs any public interest in the disclosure.” In that case, the Senate itself must vote before disclosure may be made.

Ackerman seems to be suggesting that Wyden or other members circumvent this procedure and unilaterally release classified information to the public. This is a bad idea. If the Senate or House allows one member to do this with impunity, nothing would prevent other members from making classified disclosures on the same or other topics. Eventually someone will release information that damages national security and/or provokes a public backlash, thereby giving the executive branch a justification for restricting congressional access to classified information.

Although the congressional procedures for releasing classified information have rarely (if ever) been used, there is nothing preventing Wyden or a like-minded member from seeking to use them now. Certainly such an attempt must be made before there could be any justification for a unilateral disclosure. If there is a moment for unilateral disclosure, in other words, it is not now.

It should be noted, however that SSCI’s draconian interpretation of its secrecy rules might deter Wyden (or others) from publicly disclosing even the fact of an attempt to invoke section 8 of S. Res. 400. This could prevent him from building needed public support for his efforts. Ackerman and others concerned with excessive government secrecy might more profitably focus on that issue rather than advocate for unilateral disclosure that could undermine the entire congressional system for handling classified information.

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“We are pleased that the jury acquitted Mr. Renzi on 15 counts”

Former Congressman Rick Renzi’s attorney, who is responsible for the quote above, is obviously a glass-half-full type of person. As it happens, Renzi was also convicted on the other 17 of the 32 counts against him (so the glass was not quite half full). You can read the verdict form here.

The linked Washington Post story indicates that Renzi intends to appeal. I am sure that there will be Speech or Debate issues presented on appeal, although some of Renzi’s potential arguments may be foreclosed or made more difficult by the prior Ninth Circuit ruling in his case. It should also be noted that some of the counts on which he was convicted (e.g., Counts 28-30) involve insurance fraud/false statements that appear to be unrelated to his legislative activities or official duties. Therefore, Renzi will not be able to argue for a complete reversal of the verdict based on Speech or Debate alone.

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Dueling Speech or Debate Privileges in the Renzi Case

National Journal had an article last week regarding the Speech or Debate waiver issue in the Renzi case (hat tip: Rick Hasen), which we discussed awhile back.

Another interesting Speech or Debate issue is raised in this motion by the House General Counsel on behalf of Kevin Messner, a non-party witness. Messner served at different times as a staffer for then-Congressman Renzi and for Jim Kolbe, another (now former) congressman from Arizona. Messner has potentially relevant knowledge from his service for both of the former members. This is because both Renzi and Kolbe were interested and involved in the land exchange legislation that is at the heart of the charges against Renzi, and Messner worked on the legislation in the course of his service for each of them.

Both the prosecution and the defense expressed an interest in questioning Messner about his knowledge and activities regarding the land exchange legislation. The House Counsel, however, sought and obtained a protective order barring the parties “from questioning Kevin Messner at trial concerning the legislative activities of former U.S. Representative James Kolbe.”

Because Kolbe declined to waive his Speech or Debate privilege, he was entitled to object to questioning of Messner with respect to certain matters. I am not sure, though, that it is quite right to say that Kolbe has the right to object to any questioning of Messner regarding Kolbe’s legislative activities. Messner may have knowledge of Kolbe’s legislative activities during the time that Messner worked for Renzi. I don’t think Kolbe would have the right to object to Messner’s testifying about that.

Kolbe’s right to assert Speech or Debate cannot be based solely on the fact that Messner is being questioned about Kolbe’s legislative activities. If Messner had worked only for Renzi, Kolbe would have had no privilege to assert.  Kolbe’s right to assert privilege derives from the fact that the law views Messner as Kolbe’s “alter ego” with regard to the period when Messner worked for him. See Gravel v. United States, 408 U.S. 606, 616-17 (1972). Thus, Kolbe may assert the privilege when Messner is questioned about matters within the “legislative sphere” only if they occurred during Messner’s service in Kolbe’s office (because the law deems this the equivalent of questioning Kolbe himself).

Renzi is in a different position. He can object to questioning Messner regarding his service in Renzi’s office on the same alter ego theory, but, as the defendant, he can also object to introduction of evidence regarding legislative acts regardless of the source. Thus, Renzi could object to Messner’s testimony about Renzi’s legislative acts even if that testimony related solely to Messner’s service as a Kolbe staffer. I think (although I am not sure this has ever been litigated) Renzi could even object to Messner’s testimony if it related solely to Kolbe’s legislative acts, and arose solely from Messner’s work for Kolbe.

If this is correct, there should be no question Messner could be asked to which Kolbe alone would have the right to object. However, as House Counsel points out, Kolbe has an independent right to assert the Speech or Debate privilege, including to questions that Renzi might want to ask of Messner.

To protect Kolbe’s privilege, House Counsel not only obtained a protective order, but secured permission from the judge to sit in the well of the court during Messner’s testimony and raise any Speech or Debate objections on a question-by-question basis. This is a fairly novel procedure that, in my experience, many judges would be loath to permit. Theoretically, if the House Counsel objected to a question which the judge did not believe was covered by the privilege, House Counsel (on behalf of Kolbe) could take an immediate appeal from the judge’s ruling, potentially causing a delay in the trial.

I suspect that House Counsel would take such a step only in extraordinary circumstances. For one thing, it would make it less likely that judges would be willing to allow this procedure in the future.