The defense witness immunity doctrine: the time has come to give it strength to address prosecutorial overreaching.

• Author: Weingarten, Reid H.

1. INTRODUCTION

   A disturbing trend in federal white collar crime prosecutions is the government's manipulation of immunity grants and charging decisions to make exculpatory witnesses unavailable to the defendant at trial. In the typical corporate fraud case, after a comprehensive investigation in which the government interviews many corporate executives, the government builds its case against the Chief Executive Officer or other senior corporate executives who are the ultimate targets of the investigation on the testimony of witnesses it has immunized through plea agreements, informal immunity or non-prosecution agreements, or statutory immunity orders. For those executives who do not implicate the defendant, deny participating in any criminal scheme, or otherwise contradict the government's theory of prosecution, the government refuses to grant immunity or formally decline prosecution and instead designates them unindicted "co-conspirators" or potential targets of prosecution. This threat of future prosecution, however unlikely, inevitably leads these potential exculpatory witnesses to invoke their Fifth Amendment fight against self-incrimination when subpoenaed by the defendant to testify at trial. Under current law, it is difficult for a defendant to obtain immunity for these potentially exculpatory defense witnesses or any other meaningful relief. Thus, through the guise of "prosecutorial discretion" in immunity and charging decisions, the government is able to prevent the defendant from introducing exculpatory evidence.

   Even more troubling is the government's increased use of the co-conspirator exception to the hearsay rule (1) to affirmatively introduce inculpatory statements attributed to the very executives it refused to immunize. By deeming the non-immunized exculpatory witnesses "co-conspirators," the government is able to introduce out-of-court statements supposedly made by the non-immunized executives in furtherance of the alleged conspiracy by eliciting them from its immunized cooperating witnesses. In some cases, the government employs this strategy even though the actual co-conspirator declarants specifically denied making the statements or participating in any conspiracy at all when interviewed by the government during the investigation. Due to the government's threat of future prosecution against these "co-conspirators," however, the defendant cannot elicit this exculpatory evidence or cross-examine the witnesses whose ostensible statements are offered as evidence against him.

   These prosecutorial tactics can lead to profoundly unfair results. For example, in early-2005, we defended Bernie Ebbers, WorldCom's Chief Executive Officer from 1985 through April 2002, in a criminal trial in the U.S. District Court for the Southern District of New York. The government charged Ebbers with securities fraud based on alleged accounting improprieties at WorldCom. WorldCom's Chief Financial Officer, Scott Sullivan, and other employees in the WorldCom accounting department pied guilty and/or received immunity in return for their testimony implicating Ebbers in the fraud. During the investigation, more than two years prior to trial and before Ebbers was even indicted, the government interviewed WorldCom's Chief Operating Officer, the head of SEC Reporting and Financial Disclosures, and the head of Revenue Accounting, each of whom denied participating in any securities fraud, being aware of any "red flags" suggesting fraud at WorldCom or having any conversations with Ebbers that suggested he was aware of any wrongdoing. None of these executives has been charged with any crime.

   Prior to trial, the government identified each of these former-WorldCom executives as unindicted co-conspirators and held out the possibility of future prosecution. When Ebbers subpoenaed the executives, each invoked the Fifth Amendment and declined to testify at trial. Thereafter, the district court denied Ebbers' motion seeking defense witness immunity for these executives.

   At trial, the government elicited from Sullivan and its other cooperating witnesses, pursuant to the co-conspirator exception to the hearsay rule, several inculpatory statements attributed to the three non-immunized WorldCom executives that it used to prove that the executives were part of the securities fraud conspiracy with Ebbers. In their prior interviews with the government, however, each of the executives had denied making the statements or participating in any conspiracy at all. The district court denied Ebbers' request to impeach the co-conspirator statements with the prior inconsistent, exculpatory statements that the executives made to the government. The district court also refused to provide a "missing witness" jury instruction that would have permitted the jury to infer that the testimony of the missing WorldCom executives would have been unfavorable to the government.

   In closing argument, the government prominently featured each of the co-conspirator statements as evidence proving that Ebbers committed securities fraud. However, the district court's prior rulings prohibited us from making any argument in closing about the fact that the three WorldCom executives did not appear in court to corroborate the co-conspirator statements. After eight days of deliberations, the jury convicted Ebbers of the securities fraud charges. The case is currently on appeal.

   In recent years, we have faced this situation in other white collar crime cases, and we continue to see prosecutors engaging in similar tactics in ongoing cases around the country.

   This article addresses the limited tools available to a defense attorney to counter the unfairness of prosecutorial manipulation of immunity and charging decisions, including (1) seeking an order requiring the government to grant immunity to defense witnesses or face dismissal of the indictment, (2) moving, pursuant to Federal Rule of Evidence 806, (2) to impeach co-conspirator statements with evidence of prior inconsistent statements, and (3) requesting a "missing witness" jury instruction that would permit the jury to infer that the testimony of the non-immunized "co-conspirators" would have been unfavorable to the government. Given the current state of the law, however, it is extremely difficult for a defendant to present an effective defense when the government uses its charging and immunity decisions to render potential defense witnesses unavailable. Now that prosecutors are increasingly pushing the boundaries of the applicable standards, it is time for courts to re-examine the defense witness immunity doctrine to ensure defendants are not denied a fair trial by the government manipulating the system to ensure that exculpatory defense witnesses invoke the Fifth Amendment and become "unavailable" to testify for the defendant at trial.

2. THE DEFENSE IMMUNITY DOCTRINE

   Defendants have traditionally faced significant obstacles in obtaining defense witness immunity. The Due Process Clause does not require defense witness immunity to be ordered "whenever it seems fair to grant it." (3) Because immunity is "pre-eminently a function of the Executive Branch," (4) "as a general rule the government may not be required to confer immunity for the benefit of the defense...." (5)

   However, on "rare occasions" courts may "use their coercive powers to force the government to grant immunity." (6) For instance, the Second Circuit has adopted "a three-part test for requiring the government to grant defense witness immunity at the risk of dismissal of the indictment:" (7)

   First, the district court must find that the 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. Second, the witness's testimony must be "material, exculpatory, and not cumulative." Third, the testimony must be unobtainable from any other source. (8) This approach "recognizes the essential unfairness of permitting the Government to manipulate its immunity power to elicit testimony from prosecution witnesses who invoke their right not to testify, while declining to use that power to elicit from recalcitrant defense witnesses testimony" that meets the three-part test. (9) This "carrot-and-stick approach, leav[es] the immunity decision to the executive...