Readers of this blog know its commitment to publishing the most reliable, up-to-the-minute data on corruption, and it is in this spirit I urge a revision to the famous line Shakespeare has Dick the Butcher speak in Henry VI, part 2: “First thing we do, let’s kill all the lawyers.” New research shows not all lawyers are, as Shakespeare and his audience supposed, venal, greedy, and unethical. When lawyers in 13 New York law firms were approached to help an African official squirrel away funds that screamed “we are the proceeds of corruption,” two passed up the chance to earn the fat fee dangled before them, one on the spot and one after thinking things through. Advanced econometric analysis thus reveals that only 85 percent (11/13) of those queried were willing to consider assisting an obviously corrupt African politician. So if the same percentage of Elizabethan-era lawyers were as upright as today’s New York attorneys, Dick would not have needed to off all lawyers to reach the utopia envisioned in Act IV, Scene II. Just 85 percent.
The details of the new research are by now well-known. An operative working for the international NGO Global Witness, posing as an agent of the minister of mines of an unnamed West African country, visited 13 New York City law firms with a request. Would they be willing to devise a way the minister could buy a Manhattan home, a yacht, and a jet plane anonymously? The operative, who surreptitiously taped the meetings, captures the lawyers’ drooling at the chance for the minister’s business. He gives various dodgy explanations for where the money, tens of millions of dollars, came from, suggesting to some it was “earned” from “facilitation payments” that non-U.S. companies paid him for his help in securing mining licenses in his country.
As I read GW’s report on its research and watched the videos themselves, it was hard to know what was worse: the rampant display of unseemly conduct by the 85 percent or their ignorance of, or willful blindness to, the patently illegal conduct the operative describes.
Start with what is illegal about the hypothetical minister’s conduct. The GW operative says to several of the lawyers approached that the minister’s millions came from “facilitation payments.” This explanation seemed to help former American Bar Association President James Silkenat overcome his qualms about the origins of the money. From watching the tape of the meeting he and a partner had with the GW operative, it appears he thinks that it may be okay to help hide the minister’s money because it originated from facilitation payments. He is correct that under the U.S. Foreign Corrupt Practices Act facilitation payments are not bribes: bribery, the act provides, does not include “any . . . payment . . . the purpose of which is to expedite or to secure the performance of a routine governmental action by a foreign official.” So if the operative called the money the minister received for helping companies get mining licenses “facilitation payments,” everything is alright. Right?
Not quite. Perhaps in the heat of the moment, the former chairman of the world’s largest lawyer trade association assumed that handing out a mining license was a “routine governmental action” similar to issuing a visa. Perhaps that same heat of the moment caused the former ABA president to forget that the FCPA expressly states that actions like issuing a mining license are not routine governmental actions. “The term ‘routine government action,’” section 103(a) of the act proclaims, “does not include any decision . . . whether, or on what terms, to award new business to or to continue business with a particular party. . . .”
But of course the FCPA does not apply to all corporations, only those which must register their securities under section 12 of the Securities and Exchange Act of 1934 or file reports with the Securities and Exchange Commission under section 15(d) of the Act. Although GW’s operative never said the facilitation payments were from FCPA “non-issuers” and “non-reporters,” perhaps the lawyers listening to his spiel interpreted his reference to “non-U.S. companies” to mean just that. So no problem, right? Whatever one might call the payments, and whether they actually were bribes or not, since they did not come from a company subject to the FCPA, they were not illegal. Right?
Again, not quite. The laws of all West African states make the minister’s receipt of millions of dollars for facilitating the issuance of a mining license an illegal bribe, even those of Guinea, a country with a long history of corruption in the mining sector. No matter how haphazardly enforced, these laws mean the funds the minister wants to hide in New York are the proceeds of a crime. Under the U.S. Money Laundering Control Act of 1986 they are, therefore, the proceeds of a “specified unlawful activity,” the bribery of a foreign public official. Which means helping to conceal the ownership of those criminal proceeds would likely qualify as a felony punishable by a prison term of up to 20 years. (So maybe all a contemporary Dick the Butcher would need do to deal with the 85 percent is become Dick the Whistleblower.)
To be fair to the GW 85 percent, not all of them may have had the arcane details of the U.S. statutes discussed above on the tip of their tongues. And to be sure, on the GW tapes, after offering free advice on how the minister could hide his money, many said they would have to further check before taking the imaginary minster’s coin.
But the 85 percent didn’t need to conduct in-depth research on the laws of bribery, either those of the U.S. or of other countries. All they had to know was what Jeffrey M. Herrmann, the lawyer who refused to offer any advice on how the minister might hide the money and showed the GW operative the door, knew. What was that?
The short, simple provision of the American Bar Association’s model lawyers’ ethics code which appears below and which was incorporated verbatim into New York’s Rules of Professional Conduct for lawyers —
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent. . . .
Note the last word — “fraudulent.” It’s not just, as some of the GW 85 percent suggest when talking with the GW operative, that a lawyer can’t advise a client on how to break the law. The code also bars lawyers from giving advice about, or helping a client with, conduct “the lawyer knows is . . . fraudulent.” As the 85 percent would have learned during their first year of law school, “fraudulent” conduct involves far more than criminal acts. It covers, as the U.S. Supreme Court reminded long ago, actions that involve some type of “trick” or some form of “deceit.” I don’t know how anyone, lawyer or not, could have listened to the GW operative’s spiel about how the minister came by the money he wanted to hide in the United States and not see “trickery’ or “deceit” written all over it. Isn’t hiding something a form of “deceit”? And surely anyone would see trickery involved when a minister accepts third party payments to do the job he was hired to do.
The most damning part of the whole sorry affair, though, may be the response of former ABA head Silkenat and his partner when confronted about their session with the operative. They promptly produced a letter from a leading authority on American legal ethics saying the two had “acted appropriately” in their meeting with the GW operative. The discussions about how the minister might hide the money was entirely ethical wrote New York University Law School Professor Stephen Gillers. If Professor Gillers is right, then, as noted pundit (and Harvard Law School graduate) Michael Kinsley once observed, “the scandal isn’t what’s illegal, the scandal is what’s legal.”
It may be that Silkenat, his partner, and their ethics counsel believe the conversation with the operative was “appropriate” because they think the ethics code is limited to counseling clients about actions that are criminal or fraudulent under American law. From Mr. Silkenat’s comments on the GW tape he seems to be implicitly reading into the text “under the law of the United States” or words to similar effect. That is, he read a lawyer’s ethical obligation as “not to counsel . . . or assist a client . . . in conduct the lawyer knows . . . is fraudulent under the law of the United States. . . .” But I could find nothing in the commentary on the ABA code or the codes issued by state bar associations that limits the terms “criminal” and “fraudulent.” Nor did I find an opinion by a state ethics committee that tells American lawyers it is entirely ethical to help a client break the law of another country or defraud someone or some entity so long as the person or entity isn’t an American. (An absence explainable, surely, because of the profession’s commitment to the laudatory goal of promoting the rule of law around the world.)
But since there may be some doubt whether the ethical ban on counseling clients about crime and fraud is limited to what is chargeable as a crime or a fraud under American law, why not clear up any confusion? Why not amend the rule on the limits of lawyer counseling to read —
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent under the laws of any nation. . . .
The amendment could be put to a vote at the next meeting of American Bar Association. Would 85 percent of the member vote against it? Perhaps not if a high-profile member of the association moved the amendment. Say a distinguished former president? One who has written eloquently on the importance of spreading the rule of law to the four corners of the globe? Mr. Silkenat, are you available?