ANTHONY J. TRENGA, District Judge.
Currently before the Court are the following Motions:
(1) Defendant Bijan Rafiekian's Motion to Dismiss the Indictment [Doc. No. 190] (the "Motion to Dismiss");
(2) Defendant Bijan Rafiekian's Motion In Limine to Exclude Out-Of-Court Statements by Co-Conspirators [Doc. No. 154] (the "Motion to Exclude Co-Conspirator Statements");
(3) Defendant Bijan Rafiekian's Motion to Dismiss the Indictment and Exclude and Suppress Privileged Information [Doc. No. 163] (the "Motion to Exclude Privileged Information");
(4) the Government's Motions to Establish the Crime-Fraud Exception as to Defendants Rafiekian [Doc. No. 173] and Alptekin [Doc. No. 182] (collectively, the "Motions to Establish Crime-Fraud Exception");
(5) Defendant Bijan Rafiekian's Motion for an Evidentiary Hearing [Doc. No. 186] (the "Motion for Evidentiary Hearing");
(6) Defendant Bijan Rafiekian's Motion In Limine to Preclude the Government From Arguing that Turkey Funded FIG's Work for Inovo [Doc. No. 165] (the "Motion to Preclude Argument on Turkey Funding"); and
(7) Defendant Bijan Rafiekian's Motion for Additional Peremptory Challenges and a Jury Questionnaire [Doc. Nos. 150 and 152] (the "Motion for Additional Peremptory Challenges and Jury Questionnaire").
The Court held hearings on these motions on June 13 and June 28, 2019, following which it took the Motions under advisement. For the reason stated below, the Court rules as follows with respect to the issues raised in these motions:
(1) In order to prove a violation of 18 U.S.C. § 951, an essential element of the offense is that the defendant engaged in conduct that was not an excluded legal commercial transaction. However, the Superseding Indictment sufficiently alleges in substance the essential elements and the Motion to Dismiss [Doc. No. 190] is DENIED.
(2) The United States at this point has not presented or proffered evidence sufficient to establish by a preponderance of the evidence a conspiracy for the purposes of admitting against the Defendant the hearsay statements of alleged co-conspirators pursuant to Fed. R. Evid. 801(d)(2)(E); and the Motion to Exclude Co-Conspirator Statements [Doc. No. 154] is GRANTED to that extent, without prejudice to admitting communications to Rafiekian for the limited purpose of establishing what he was told or knew about a relevant issue, or the proffer of additional evidence at trial with respect to admissibility under Fed. R. Evid. 801(b)(2)(E), and is otherwise DENIED.
(3) Pending further order by the Court, the United States may not argue or state to the jury that Turkey, in fact, funded the work by Flynn Intel Group, Inc. ("FIG") under the contractual arrangement between FIG and Inovo, BV ("Inovo"); and the Motion to Preclude Argument on Turkey Funding is GRANTED, provided, however, the jury may be told in opening statement what the evidence will show concerning what Rafiekian was told about Turkey's involvement.
(4) The Defendant shall have 15 peremptory challenges, and the United States 10 peremptory challenges; and the Motion for Additional Peremptory Challenges and Jury Questionnaire [Doc. Nos. 150 and 152] is GRANTED to that extent and is otherwise DENIED.
(5) With respect to the attorney-client privilege issues presented in the pending motions [Doc. Nos. 163, 173, 182, and 186]:
The Superseding Indictment [Doc. No. 141], returned on May 23, 2019, contains two counts against Rafiekian. Count One charges Rafiekian under 18 U.S.C. § 371 with conspiring with Co-Defendant Kamil Ekim Alptekin
In support of these charges, the Superseding Indictment alleges the following:
The Defendant and others participated in a conspiracy that began in July 2016 and continued through March 2017 pertaining to work relating to Turkey performed by FIG, which was co-founded and co-owned by Rafiekian (FIG's Vice-Chairman, Director, Secretary, and Treasurer) and former National Security Adviser Michael Flynn (FIG's Chairman and Chief Executive Officer). Superseding Indictment ¶ 1. To perform this work, FIG was engaged by, and signed a contract with, Inovo, a company formed by Alptekin in the Netherlands. Id. ¶¶ 2, 22. The engagement was formalized in a written contract between FIG and Inovo on or about September 3, 2016, though FIG had begun work on the project, which was initially known as the Truth Campaign and later became known as Operation/Project Confidence, in late July. See id. ¶ 22. Under the terms of the contract, the parties entered into a 90-day engagement for which FIG was to receive a total of $600,000 broken into three $200,000 payments from Inovo, of which Alptekin received twenty percent for his "advisory support." Id. ¶¶ 17-18, 22.
Pursuant to its contract with Inovo, FIG was expected to "deliver findings and results including but not limited to making criminal referrals" related to Fethullah Gulen, a Turkish imam, writer, and political figure residing in the United States. Id. ¶¶ 3-4, 22. Specifically, the project was supposed to result in "[a] 60 minutes video productions documenting the investigations" into Gulen. GEX 23B. The purpose of this work was to "discredit and delegitimize [Gulen] in the eyes of politicians and the public, and ultimately to secure [his] extradition." Superseding Indictment ¶ 3. This goal is in line with the interests of the Turkish government, which has "accused [Gulen] of plotting to overthrow the Turkish government," of "being behind" certain politically motivated investigations in Turkey, and of "leading an armed terrorist group," and has formally and openly sought his extradition from the United States government, particularly after a failed July 2016 coup d'état attempt in Turkey, which the Turkish government maintained he had orchestrated. Id. ¶¶ 5-7.
Though FIG's contract for this work was with Inovo, which also paid its fees, the Turkish government directed FIG's work through Alptekin and approved the budget for, and received regular updates on, the progress of FIG's work. Id. ¶ 3. In that regard, several emails between Rafiekian, Alptekin, and Flynn prior to FIG's official engagement indicate that FIG and Inovo only entered into a formal engagement after receiving the approval of high-level Turkish government officials. See id. ¶¶ 8-9, 14-16. After FIG had been engaged by Inovo, Rafiekian, Alptekin, Flynn, and other members of the project met with high-level Turkish officials on September 19, 2016, where they discussed the Turkish government's efforts to convince the U.S. government to extradite Gulen to Turkey. Id. ¶ 28. Alptekin had weekly telephone calls with Rafiekian, Flynn, and other FIG team members as to FIG's progress on the project, which he then passed on to Turkish officials, and then relayed their feedback on the project to Rafiekian and Flynn. Id. ¶¶ 39-40.
As part of the project, FIG provided consulting and lobbying services to the Turkish government, id. ¶ 1, which were designed to "influence U.S. politicians and public opinion," id. ¶ 3. Specifically, Rafiekian and others involved in the project "visited with and lobbied a member of Congress, a Congressional staffer, and a state government official in an attempt to depict [Gulen] as a threat who should be returned to Turkey and to persuade them to hold Congressional hearings regarding [Gulen]." Id. ¶ 30. Rafiekian, working with Alptekin and Flynn, also helped draft an op-ed concerning Gulen entitled Our Ally Turkey Is In Crisis and Needs Our Support, and then helped place it for publication in The Hill newspaper, where it was published on November 8, 2016 under Flynn's name. Id. ¶¶ 45-50. Rafiekian sent Alptekin his initial draft of the op-ed immediately after Alptekin complained to him that FIG had not publicized enough negative information about Gulen and asked that they find a "smoking gun." Id. ¶ 44.
In August 2016, Rafiekian contacted, but did not retain, Covington "to provide advice concerning FARA," see Ex. G to Mot. to Exclude Privileged Information, and in September 2016, Rafiekian consulted with Robert Kelley, an attorney who later became FIG's General Counsel, about whether FIG was required to register under FARA, see Ex. B to Opp'n to Mots. to Establish Crime-Fraud Exception. Based on Kelley's advice, FIG registered under the Lobbying Disclosure Act ("LDA") at that time. See id.
On November 8, 2016, the same day as the publication of the op-ed, Donald Trump won the Presidential election, leading to Flynn's appointment as National Security Advisor designate for the incoming administration, and FIG discontinued its operations soon after. [Doc. No. 164] at 9; see also Ex. A to Reply in Support of Mot. to Exclude Privileged Information. Nevertheless, the publication of the op-ed triggered a letter dated November 30, 2016 to Flynn and FIG from the FARA Registration Unit of the U.S. Department of Justice (the "FARA Unit") regarding whether FIG, Flynn, or any other individuals had an obligation to register as an agent of a foreign government under FARA. Superseding Indictment ¶ 51; see also Ex. A to Reply in Support of Mot. to Exclude Privileged Information. In response to the FARA Unit's inquiry, FIG, through Flynn, hired Covington to assist with evaluating whether a FARA filing was required, and Flynn also retained Covington personally. Superseding Indictment ¶ 52; see also Ex. 1 to Opp'n to Mot. to Exclude Privileged Information. Concurrently, both FIG as a corporate entity and Flynn personally were also represented by Kristen Verderame. See [Doc. No. 196] at 3.
By letter dated January 11, 2017, Covington provided a written response to the FARA Unit's November 30, 2016 inquiry. See Ex. A to Reply in Support of Mot. to Exclude Privileged Information. In that letter, Covington advised that "the existence of [the FARA Unit's] letter was not known to General Flynn and FIG until approximately December 24, 2016, because FIG generally suspended its activities in mid-November, including the use of the office to which the letter was sent." Id. Covington further advised:
Id. With respect to the op-ed authored by Flynn and published in The Hill newspaper on November 8, 2016, Covington advised:
Id.
Based on the information that it obtained during its investigation, including from Flynn, Rafiekian, Alptekin, and others, Covington filed a retroactive FARA registration on FIG's behalf on March 7, 2017 (the "FARA filing"). Superseding Indictment ¶ 55. In its cover letter to the FARA Unit with respect to that filing, Covington stated that it was filing under FARA because FIG's work for Inovo "could be construed to have principally benefitted the Republic of Turkey." Ex. D to Mot. to Exclude Privileged Information.
The Superseding Indictment alleges that the FARA filing contains materially false information and that between January and March 2017, Rafiekian and Alptekin "knowingly provided false information to [Covington attorneys] in an effort to hide from the attorneys — and ultimately from the FARA Unit — the involvement of Turkish government officials in the project." Superseding Indictment ¶ 52. Specifically, the Superseding Indictment alleges that Rafiekian made the following false representations to Covington:
Id. ¶ 53.
The Superseding Indictment further alleges that based on the misrepresentations of Rafiekian, Alptekin, and others to Covington, the FARA filing contained the following false statements or omissions:
Although it appears that Flynn and not Rafiekian signed the FARA filing, see Ex. D to Mot. to Exclude Privileged Information at 8, 11, 15, the government alleges that Rafiekian reviewed the FARA filing and provided comments to Covington before it was submitted, but did not request that any of the alleged false statements therein, which he and Alptekin "caused to be made" based on their false representations, be changed, leading to the filing of a materially false FARA registration statement on FIG's behalf, Superseding Indictment ¶ 55.
On December 1, 2017, Flynn, represented in his individual capacity by Covington, which also continued to represent FIG, pled guilty to lying to the FBI about his contacts with Russian officials. See Ex. E to Mot. to Exclude Privileged Information. Though Flynn pled guilty to charges completely unrelated to FIG, the FARA filing, and Rafiekian, Flynn admitted in the Statement of Offense he executed in connection with that resolution that he had made the following materially false statements and omissions in the FARA filing:
Ex. C to Mot. to Exclude Privileged Information.
In connection with his guilty plea, Flynn also entered into a cooperation and plea agreement that mandates his cooperation with the government in its ongoing investigations and prosecutions, including in this prosecution. See Ex. E to Mot. to Exclude Privileged Information. Among his duties of cooperation is his obligation to "turn over to [law enforcement] . . . any and all evidence of crimes about which [he] is aware." Id. at 5. Flynn's former Covington lawyers
As part of his cooperation, Flynn, in his capacity as CEO and Chairman of FIG's Board of Directors, (1) authorized Covington to share with the U.S. Attorney's Office certain information concerning the preparation of the FARA filing; (2) authorized FIG's former in-house General Counsel to be interviewed regarding the legal advice he provided to FIG before Covington's retention regarding FIG's obligation to file under FARA; (3) submitted to interviews by the U.S. Attorney's Office about the FARA submission and the factual information he and others shared or did not share with Covington lawyers who were working on preparing the FARA filing; and (4) authorized Covington to disclose to the U.S. Attorney's Office the factual representations made to them by FIG personnel in connection with the FARA filing; the source of those factual representations; information concerning who reviewed drafts of the FARA filing and their comments, corrections, or questions thereto; and how they received communications from FIG personnel concerning the contents of the FARA filing. See Ex. G to Mot. to Exclude Privileged Information.
Rafiekian was indicted on December 12, 2018, [Doc. No. 1], with a Superseding Indictment issued on May 23, 2019, [Doc. No. 141].
Count One of the Superseding Indictment alleges a conspiracy to violate 18 U.S.C. § 951 and also to cause the filing of a false FARA statement in violation of 22 U.S.C § 618(a)(2). Count Two charges that Rafiekian, in violation of 18 U.S.C. § 951, knowingly acted and caused others to act as agents of the Turkish government without prior notification to the Attorney General. Rafiekian first moves to dismiss Count Two on the grounds that the indictment fails to allege conduct constituting an essential element of Section 951, namely, that Rafiekian engaged in conduct that did not constitute an exempted "legal commercial transaction." He also seeks the dismissal of Count One on the grounds that because the Superseding Indictment fails to adequately charge an offense under Section 951, the conspiracy to violate Section 951 also fails; and the conspiracy to violate Section 618(a)(2) fails to adequately allege an agreement to cause the filing of a false FARA statement.
An indictment must be "a plain, concise and definite written statement of the essential facts constituting the offense charged." Fed. R. Crim. P. 7(c)(1). "[It] must contain the elements of the offense charged, fairly inform a defendant of the charge, and enable the defendant to plead double jeopardy as a defense in a future prosecution for the same offense." United States v. Daniels, 973 F.2d 272, 274 (4th Cir. 1992) (citing Russell v. United States, 369 U.S. 749, 763-64 (1962)). A criminal defendant "may raise by pretrial motion any defense, objection, or request that the court can determine without a trial on the merits," including "a defect in the indictment" such as a "failure to state an offense." Fed. R. Crim. P. 12(b)(1), (3)(B). Pretrial challenges to the sufficiency of the indictment subject the alleged deficiency to a higher standard of review than post-verdict challenges to the sufficiency of the indictment. See United States v. Kingrea, 573 F.3d 186, 191 (4th Cir. 2009); United States v. Hooker, 841 F.2d 1225, 1229 (4th Cir. 1988) (en banc).
To challenge the sufficiency of an indictment, a defendant must "demonstrate that the allegations therein, even if true, would not state an offense." United States v. Thomas, 367 F.3d 194, 197 (4th Cir. 2004). Where, even taking all the allegations in the indictment as true, the government fails to allege all essential elements of an offense, courts have dismissed the indictment and vacated any conviction thereunder. See, e.g., United States v. Spruill, 118 F.3d 221, 227 (4th Cir. 1997) (vacating conviction where count failed to charge essential element of offense); Daniels, 973 F.2d at 275-76 (reversing conviction and remanding with instructions to dismiss count that was "fatally defective because it failed to specifically include every essential element of the charged offense").
18 U.S.C. § 951(a) provides that "[w]hoever, other than a diplomatic or consular officer or attaché, acts in the United States as an agent of a foreign government without prior notification to the Attorney General . . . shall be fined under this title or imprisoned not more than ten years, or both." Subsection (d) defines an "agent of a foreign government" as "an individual who agrees to operate within the United States subject to the direction or control of a foreign government or official, except that such term does not include . . . any person engaged in a legal commercial transaction." 18 U.S.C. § 951(d)(4) (emphasis added). Under applicable Department of Justice regulations, a "legal commercial transaction" for the purposes of 18 U.S.C. § 951(d)(4) is "any exchange, transfer, purchase or sale, of any commodity, service or property of any kind, including information or intellectual property, not prohibited by federal or state legislation or implementing regulations."
Neither the Supreme Court nor the Fourth Circuit has decided whether proof of conduct other than an excluded "legal commercial transaction" is a necessary element of an offense under 18 U.S.C. § 951 and therefore must be alleged and proven by the United States in order to establish a violation of Section 951, or whether the absence of such proof is an affirmative defense, and therefore does not need to be alleged or proven in order to establish a violation of Section 951.
An element of an offense is "one whose specification . . . is necessary to establish the very illegality of the behavior." Hooker, 841 F.2d at 1231 (internal citation and quotation marks omitted). An affirmative defense, on the other hand, "operate[s] to excuse criminal liability"; that is, it "does not negate an element of a crime" but instead "excuses punishment for a crime the elements of which have been established and admitted.'" United States v. Thompson, 554 F.3d 450, 452 n.2 (4th Cir. 2009) (quoting Smart v. Leake, 873 F.2d 1558, 1575 n.22 (4th Cir. 1989)) (internal quotation marks omitted).
In McKelvey v. United States, 260 U.S. 353, 357 (1922), the Supreme Court explained with regard to exceptions in statutory schemes that "it has come to be a settled rule . . . that an indictment or other pleading founded on a general provision defining the elements of an offense, or of a right conferred, need not negative the matter of an exception made by a proviso or other distinct clause, whether in the same section or elsewhere, and that it is incumbent on one who relies on such an exception to set it up and establish it." But the Supreme Court has also acknowledged that there are some cases where
United States v. Cook, 84 U.S. 168, 175 (1872). Under these circumstances, what could, on the face of the statute, look like an exception, and therefore an affirmative defense, rather than an element, may be so embedded and integral to the statutory charge that it is in fact an offense element that must be pled.
Section 951 is such a statute. It imposes criminal liability on "[w]hoever . . . acts . . . as an agent of a foreign government. . . ." 18 U.S.C. § 951(a). In subsection (d), an "agent" is defined as "an individual who agrees to operate within the United States subject to the direction or control of a foreign government of official," but "does not include — any person engaged in a legal commercial transaction." 18 U.S.C. § 951(d)(4). Section 951 therefore defines "agent" so as to exclude an exceptionally broad category of potential defendants — namely, "any person engaged in a legal commercial transaction." Under this statute, a person engaged in a legal commercial transaction cannot be "an agent," and therefore subject to the statute, even if that person has "agree[d] to operate within the United States subject to the direction or control of a foreign government of official." By defining "agent" in this fashion, the statute does not excuse an established criminal act, as an affirmative defense would; instead, it has "render[ed] the underlying conduct noncriminal." See Smith v. United States, 568 U.S. 106, 111-12 (2013). Accordingly, to establish that a person is covered under the statute in the first instance, there must be proof that the person engaged in some conduct other than an excluded legal commercial transaction when acting at the control or direction of a foreign government or official. Such proof is therefore a "specification . . . necessary to establish the very illegality of the behavior." Hooker, 841 F.2d at 1231 (citation and quotation marks omitted). For these reasons, Section 951 is fundamentally different in structure than a statute that imposes liability on any person who agrees to operate subject to the direction or control of a foreign government or official, but nevertheless excuses that liability because the conduct that subjected that person to liability was excluded conduct.
The government argues that McKelvey establishes a mechanical distinction between affirmative defenses "set out in distinct clauses or provisions," versus language set forth in the "general provision defining the elements of an offense," and that because "Section 951(a) defines the offense and sets out the prohibited conduct," and because "[t]he `legal commercial transaction' language relied upon by [Rafiekian] does not appear in Section 951(a)" but is instead set out in subsection (d), it must "be treated as giving rise to an affirmative defense." [Doc. No. 228] at 8, 10. But under the pronouncements in Cook, the distinction between an offense element and an affirmative defense is a substantive distinction, not a mechanistic distinction that turns on the placement of statutory clauses. See also United States v. Prentiss, 256 F.3d 971, 979-80 (10th Cir. 2001) (en banc) ("McKelvey's general provision/proviso dichotomy is only one interpretative aid among several that should be applied in parsing statutes that define offenses"). To get out from under this analysis, the United States relies heavily on United States v. Royal, 731 F.3d 333 (4th Cir. 2013). However, the statute at issue in that case is structured fundamentally differently than Section 951 and the Fourth Circuit's analysis in Royal is easily squared with the principles articulated in Cook.
Royal involved a prosecution under 18 U.S.C. § 922(g), which prohibits certain persons from knowingly possessing "any firearm or ammunition" in interstate commerce. "Ammunition" and "firearm" are defined terms, whose definitions are set out in separate subsections of a different section. See 18 U.S.C. §§ 921(a)(17)(A) (defining ammunition), (a)(3) (defining firearm). In pertinent part, the definition of "ammunition" includes any projectile "designed for use in any firearm." The definition of "firearm" excludes an "antique firearm," which is defined in another subsection, 18 U.S.C. § 921(a)(16). The defendant contended that the government was required to prove as part of its case in chief that the ammunition he possessed was not ammunition that was designed for use only in an antique firearm. The Court rejected that reading of the statutory scheme and held that whether a covered person possessed ammunition that was usable only in an antique firearm was an affirmative defense, not an element of the offense.
In reaching that conclusion, the Fourth Circuit specifically distinguished between an aspect of a statutory scheme, such as the exclusion of an antique firearm from the definition of "firearm," which "stands alone as a separate sentence untethered to the general definition of `firearm,'" and the "designed for use in any firearm" portion of the definition of "ammunition," which it deemed "part and parcel of the definitional sentence." Royal, 731 F.3d at 338-339. "Consequently, it is the government's initial burden to prove as an element of the [Section 922(g)(1)] offense that the rounds were `designed for use in any firearm,'" but it is the defendant's burden to prove as an affirmative defense that the ammunition at issue was usable only in an antique firearm, and therefore not ammunition usable in "any firearm" covered by the statute. See id. at 339. Significant to the Court was that Section 922(g) criminalized a broad range of behavior—a felon's possession of all manner of "firearms"—but in a separate section carved out a narrow exception for "antique firearm[s]," i.e., those manufactured before 1898. 18 U.S.C. § 921(a)(3).
Here, unlike in Royal, the "legal commercial transaction" language of Section 951 is "part and parcel of the definitional sentence" of "agent," just as "designed for use in any firearm" is part and parcel of the definition of "ammunition." Also unlike the narrow antique firearms exception in the statute in Royal, Section 951(d), even in light of the inclusions set forth in 951(e), references conduct so broad as to encompass and exempt virtually all legal commerce from the statute's notice requirement.
The Court's conclusion as to Section 951 is also consistent with the Fourth Circuit's analysis in United States v. Daniel, 3 F.3d 775 (4th Cir. 1993). Daniel involved the prosecution of a medical doctor under 21 U.S.C. § 841, which provides in relevant part that, "[e]xcept as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally — to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance." 21 U.S.C. § 841(a)(1). A separate section, 21 U.S.C. § 822(b), "authorizes distribution and dispensation by registrants," usually medical doctors, "`to the extent authorized by their registration and in conformity with the other provisions of this subchapter.'" Daniel, 3 F.3d at 778 (quoting 21 U.S.C. § 822(b)). The Fourth Circuit read those two sections together, finding that the government was required to allege as an element of the offense that the distribution was done "in a way not authorized by this subchapter," a requirement satisfied by "[t]he indictment's allegations that the attempted distributions or dispensations were not for a legitimate medical purpose." Id. (internal quotation marks and alterations omitted). Similarly, Sections 951(a) and 951(d) can and should be read together to require the government to allege that the person has "act[ed] in the United States as an agent of a foreign government without prior notification to the Attorney General," and that the relevant "acts" are not "legal commercial transaction[s]." 18 U.S.C. § 951(a), (d)(4).
The Court's construction of Section 951 also finds support in the statute's legislative history. After the statute was amended in 1948, it penalized anyone "other than a diplomatic or consular officer or attaché" who "acts in the United States as an agent of a foreign government without prior notification to the Secretary of State," without further qualification. Pub. L. No. 80-772, § 951, 62 Stat. 683, 743 (1948); see United States v. Duran, 596 F.3d 1283, 1295 n.7 (11th Cir. 2010). But at a congressional hearing in 1982, the Department of Justice warned Congress that at least one federal court had expressed concerns as to the vagueness of the statute. See Communist Bloc Intelligence Gathering Activities on Capitol Hill: Hearing on S. 1959 and S. 1963 Before the S. Comm. on Security and Terrorism, 97th Cong. 37 (1982) (statement of Mark Richard, Deputy Assistant Att'y Gen., Criminal Division, Department of Justice) ("[T]he Department does believe that the Congress should define the term `agent of a foreign government' . . . narrowly to avoid the problems presented in [a] recent . . . case in Philadelphia, in which the judge indicated that in the absence of clarifying regulations Section 951 was too vague to adequately warn defendants that their conduct was proscribed."). The State Department agreed and also urged a narrower definition of the term "agent of a foreign government":
Id. at 27-28 (statement of Jeffrey H. Smith, State Department); see also id. at 31 (among individuals who "need not, in our view, register with the Attorney General" are "people engaged in legitimate representation of foreign governments in commercial activities"). Congress added subsection (d) to Section 951 in 1984 in response to these executive and judicial branch constitutional concerns about an overbroad definition of the word "agent." See Pub. L. No. 98-473, § 1209, 98 Stat 1837, 2164 (1984); S. REP. NO. 98-225, at 415 (1983) (stating that the amendment was designed to "limit[] the coverage of the statute by focusing only on those in whom the United States government has a necessary interest" by narrowing the statute's reach to, among other things, no longer "cover those individuals engaged in routine commercial matters"). Requiring that the government prove that the defendant engaged in some conduct other than an excluded legal commercial transaction is therefore in accordance with Congressional intent.
Because the text, structure, and history of Section 951 support the conclusion that the legal commercial transaction provision in subsection (d) establishes an offense element rather than an affirmative defense, the question becomes whether the Superseding Indictment sufficiently alleges that Rafiekian engaged in activity other than an excluded legal commercial transaction. "[W]hen an indictment fails to include an essential element of the offense charged, it thereby fails to charge any federal offense," and the proper recourse is dismissal. United States v. Pupo, 841 F.2d 1235, 1239 (4th Cir. 1988) ("We have uniformly dismissed on objection before verdict indictments for failure to include an essential statutory element despite the inclusion of a citation to the statute itself in the indictment."). Because "[t]he Fifth Amendment requires a grand jury to examine and find sufficient evidence of every element of the offense listed in the indictment," United States v. Darby, 37 F.3d 1059, 1064 n.3 (4th Cir, 1994), "mere reference to the applicable statute does not cure the defect," id. at 1063. For the same reason, "a jury instruction cannot cure the omission from the indictment of an essential element of the offense." Id. at 1064 n.3.
The Superseding Indictment does not specifically allege that Rafiekian engaged in conduct other than an excluded legal commercial transaction. It does, however, allege the specific conduct that subjects Rafiekian to criminal liability. Summarized generally, Rafiekian is alleged to have engaged in a scheme to "covertly and unlawfully . . . influence U.S. politicians and public opinion" about Fethullah Gulen. Superseding Indictment ¶ 3. As part of this scheme, he is alleged to have (1) "visited with and lobbed a member of Congress, a Congressional staffer, and a state government official" in support of Gulen's extradition, id. ¶ 30; (2) helped draft and place for publication an op-ed concerning Gulen under Flynn's name, id. ¶¶ 45-50; and (3) made misrepresentations to Covington regarding Turkey's involvement in the project in connection with FIG's FARA filing, see id. ¶ 53.
Rafiekian's lobbying and op-ed activities fall well within the definition of legal commercial transactions unless "prohibited by federal or state legislation or implementing regulations." 28 C.F.R. § 73.1(f). Although Rafiekian is not charged with a FARA violation under 22 U.S.C. 612(a), these activities would violate FARA, and therefore be illegal, if they are covered activities
Rafiekian also contends that Count One, charging a conspiracy to violate Section 951, must also be dismissed. This contention is based on his claim that the Superseding Indictment fails to adequately allege a violation of Section 951, which the Court has rejected; but regardless of the adequacy of Count Two, the actual commission of a substantive offense is not a required element of a conspiracy to commit that offense, and dismissal of a conspiracy count is therefore not required whenever a substantive count is found to be deficient. See Wong Tai v. United States, 273 U.S. 77, 81 (1927) ("It is well settled that in an indictment for conspiring to commit an offense—in which the conspiracy is the gist of the crime—it is not necessary to allege with technical precision all the elements essential to the commission of the offense which is the object of the conspiracy[.]") (citations and internal quotation marks omitted). To charge a conspiracy, "all that is necessary in the indictment is that the object of the conspiracy be set forth sufficiently to identify the offense which the defendant is charged with conspiring to commit." United States v. Matzkin, 14 F.3d 1014, 1019 (4th Cir. 1994)). The allegations in the Superseding Indictment are sufficient to satisfy this standard.
Finally, Rafiekian contends that the charged conspiracy to violate Section 618(a)(2) in Count One must be dismissed since the Superseding Indictment does not sufficiently allege an agreement to violate that statute by making a materially false FARA filing. At this stage, however, the Superseding Indictment sufficiently alleges that Rafiekian and Alptekin, "together with others known and unknown, knowingly and intentionally conspired" to "willfully" make false statements and omissions of material fact in a FARA filing, in violation of 22 U.S.C. § 618(a)(2). The Superseding Indictment also alleges the timeframe during which the conspiracy took place, the object of the conspiracy, and the offense which Rafiekian is charged with conspiring to commit. See Matzkin, 14 F.3d at 1019 (requiring only that the object of the conspiracy be set forth sufficiently to identify the object of the charged conspiracy).
The Superseding Indictment charges Rafiekian with conspiring with Alptekin and senior Turkish government officials to violate two different criminal statutes: 18 U.S.C. § 951, which prohibits acting as an agent of a foreign government without prior notification to the Attorney General; and 22 USC § 618(a)(2), which prohibits willfully making false or misleading statements in a FARA registration statement. The United States seeks to admit the statements of alleged co-conspirators based on the exception to the hearsay rule set forth in Fed. R. Evid. 801(d)(2)(E), which provides that a statement is not hearsay if it is offered against an opposing party and "was made by the party's coconspirator during and in furtherance of the conspiracy." Rafiekian has moved to exclude these out-of-court co-conspirator statements.
Fed. R. Evid. 801(d)(2)(E) reflects the Supreme Court's holding in Bourjaily v. United States, 483 U.S. 171, 175 (1987) that, in deciding whether otherwise hearsay statements of an alleged co-conspirator are admissible, courts should consider the contents of the statement in determining the existence of the conspiracy, the participation therein of the declarant and the party against whom the statement is offered, and that the statement was made "during the course of and in furtherance of the conspiracy." These preliminary questions are to be considered under Rule 104(a), which provides in relevant part that "[t]he court must decide any preliminary question about whether . . . evidence is admissible" and that "[i]n so deciding, the court is not bound by evidence rules[.]" "[W]hen the preliminary facts relevant to Rule 801(d)(2)(E) are disputed, the offering party must prove them by a preponderance of the evidence." Bourjaily, 483 U.S. at 176. Bourjaily's holding was codified and extended by the 1997 amendments to Rule 801(d)(2)(E), which provide that while the contents of the offered statement must be considered, it cannot by itself establish the existence of a conspiracy or the defendant's and declarant's participation therein. Rather, "[t]he court must consider in addition the circumstances surrounding the statement, such as the identity of the speaker, the context in which the statement was made, or evidence corroborating the contents of the statement in making its determination as to each preliminary question." Fed. R. Evid. 801(d)(2)(E), Comments to 1997 Amendments.
A conspiracy is an agreement between two or more persons to accomplish an unlawful objective or a lawful objective through an unlawful act. For the purposes of Fed. R. Evid. 801(d)(2)(E), the Court is not limited to those conspiracies alleged in the indictment, but may admit, subject to relevancy considerations, any statements of any co-conspirators involved in any conspiracy in which the defendant knowingly participated. Cf. United States v. Frol, 518 F.2d 1134, 1136 (8th Cir. 1975) (citing United States v. Nixon, 418 U.S. 683 (1974)) (finding co-conspirator statements properly admissible against all conspirators, even when no conspiracy was actually charged). For this reason, the Court has considered not only whether the United States has made the requisite showing with respect to the conspiracy alleged in Count One, but also any other conspiracy, whether charged or not.
In its opposition to the Motion to Exclude Co-Conspirator Statements [Doc. No. 198], the United States does not attach any documents as exhibits to the Motion, but instead references the Superseding Indictment and documents attached as exhibits to other pending motions; and in assessing whether the government has presented sufficient evidence of a conspiracy for the purposes of Rule 801(d)(2)(E), the Court has considered all of the documents and information presented in connection with the pending motions, including the Government's Motions to Establish Crime-Fraud Exception [Doc. Nos. 173 and 182].
Based on the evidence presented pertaining to the contents, circumstances, and context of the alleged co-conspirator statements, including subsequent events and other evidence pertaining to the conduct of the Defendant and other alleged co-conspirators, the Court concludes at this point that the government has not established under Rule 104 the existence of a conspiracy in which Rafiekian was a participant by a preponderance of the evidence for the purposes of admitting otherwise hearsay statements pursuant to Rule 801(d)(2)(E).
The proffered evidence reflects discussions between Alptekin and Rafiekian concerning the retention of FIG's and Flynn's consulting services, none of which on their face reflect or suggest any agreement to have Rafiekian operate as an undisclosed Turkish agent or cause the filing of a false FARA statement. The evidence does reflect the interest and involvement of the Turkish government in the project, including discussions between Alptekin and Turkish officials concerning setting a budget for FIG's contemplated work, see GEX 9, 16, and approving Alptekin's/Inovo's retention of FIG and/or Flynn, see GEX 14, 15, and, when viewed in its entirety, it sufficiently establishes under Rule 104 for the purposes of Rule 801(d)(2)(E) that Alptekin/Inovo was acting on behalf of the Turkish government; that the actual contract between Inovo and FIG was entered into by Inovo on behalf of and at the direction of the Turkish government; and that FIG was acting at the direction and under the control of Inovo. But one cannot sufficiently infer from this evidence that Rafiekian was conspiring to act as an undisclosed Turkish agent or to cause the filing of a false FARA statement. There is some mention of "confidentiality" and limiting the number of people privy to the discussions concerning the retention of FIG in communications between Alptekin and Rafiekian, but those references are in the context of Alptekin's then on-going, preliminary, formative business discussions with FIG. See GEX 9. Moreover, any inference of an agreement by Rafiekian to act as an undisclosed Turkish agent is substantially undercut by his contemporaneous conduct, which included seeking out legal advice concerning his FARA disclosure obligations in August 2016 (from Covington) and again in September 2016 (from Kelley), and subsequently filing an LDA disclosure statement pursuant to Kelley's advice.
Similarly, the FARA statement and related filings do not reflect the existence of the alleged conspiracy to act as undisclosed Turkish agents or to cause the filing of a false FARA statement, or Rafiekian's knowing participation in any such conspiracy. The government contends that the FARA statement contains materially false statements, attributable to Rafiekian. But what was disclosed in the FARA statement is not sufficient to allow any inference of the alleged conspiracies. Those disclosures include that (1) Turkey could be viewed as the primary beneficiary of FIG's work; (2) FIG worked at the direction of and under the control of Inovo, a foreign principal; (3) FIG was aware that Alptekin and Inovo consulted with Turkish officials regarding potential work by FIG, and Alptekin introduced FIG officials to Turkish officials at a meeting on September 19, 2016,
The government also relies centrally on the aspect of the consulting agreement between FIG and Inovo that provides for Alptekin to receive twenty percent of the fees paid to FIG from Inovo. Whatever inferences can be reasonably drawn from that arrangement, one cannot reasonably infer an agreement or understanding that Rafiekian would act as an undisclosed Turkish agent or cause the filing of a false FARA statement.
The government also contends, in the alternative, that the emails should be admitted as "adoptive admissions" pursuant to Fed. R. Evid. 801(d)(2)(E). Rule 801(d)(2)(e) provides that a statement is not hearsay if it is offered against an opposing party and "is one the party manifested that it adopted or believed to be true." The Court has examined that contention in light of the applicable considerations, including the substance of the statements and the circumstances under which they were received, and finds that they do not satisfy the requirements for "adoptive admissions."
For the above reasons, Defendant's Motion to Exclude Co-Conspirator Statements is granted to the extent set forth above. This ruling is without prejudice to the government's presenting additional evidence at trial to establish the necessary foundation for the admission of evidence pursuant to Rule 801(d)(2)(E), or with proper foundation and a limiting instruction, the admission of e-mails or other communications to Rafiekian as evidence of what information he was provided concerning Turkish involvement in the project or any other relevant issue.
FIG, acting through Flynn, retained Covington and Verderame for the purposes of determining whether a FARA filing was required and if so, to prepare and file that FARA disclosure. For that purpose, Flynn and Rafiekian provided information to Covington and Verderame in connection with the FARA filing. Covington also obtained information from Flynn and Alptekin through his counsel.
The United States seeks to admit Rafiekian's statements to Covington based on their non-privileged nature, and also, in the alternative, under the crime-fraud exception. Rafiekian seeks to exclude his statements to Covington on the grounds that (1) they were privileged and not made for the purposes of committing any crime; (2) the crime-fraud exception would not extend in any event to opinion work product statements from Covington lawyers concerning their recollection of statements made by Rafiekian; and (3) any relied upon waiver of the attorney-client privilege made by Flynn on behalf of FIG is invalid. These issues present complicated issues of law and fact arising out of whether the communications by Rafiekian to Covington were made by Rafiekian personally, or as a representative of FIG; and whether Covington's opinion work product with respect to those communications is protected. These issues, in turn, raise questions concerning the scope and nature of Covington's representation as to FIG and Rafiekian at any particular point in the representation; and the validity and effect of Flynn's waiver of FIG's privilege in light of FIG's dissolution, the basis upon which it was dissolved, and Flynn's purposes in dissolving FIG and waiving privilege.
Covington's retention was formally between Covington and FIG pertaining to FARA and separately between Covington and Flynn personally. Rafiekian does not appear to have personally retained Covington. Nevertheless, as the Court has previously ruled, under the particular circumstances of this case, and given the nature and structure of FIG, Rafiekian, as a principal officer, shareholder and one of two directors, was, like Flynn, a "client" of Covington for the purpose of access to Covington's files. A separate issue, however, is whether Rafiekian can waive any privilege on behalf of FIG.
Information provided to a lawyer for the purposes of a public filing is not privileged. Martin Marietta, 856 F.2d at 623 ("[I]f a client communicates information to his attorney with the understanding that the information will be revealed to others, that information as well as the details underlying the data which was to be published will not enjoy the [attorney-client] privilege." (internal quotation marks omitted)). While even in those circumstances certain information remains privileged if for purposes other than disclosure in a public filing, the nonprivileged nature of the information provided is not limited to the information actually disclosed in the public filing but includes all information provided for the purpose of determining what should be disclosed. See F.T.C. v. Reckitt Benchiser Pharms., Inc., 2015 WL 1062062, at *4 (E.D. Va. Mar. 10, 2015).
Given that it would appear at this point, without formally ruling, that the statements the government seeks to admit from Rafiekian would likely be nonprivileged statements made to Covington for the purposes of its FARA filing, the Court sees no need at this time to rule on all of these issues and will postpone those rulings that appear unnecessary at this time. For that reason, the Court makes the following limited rulings and pronouncements to guide the parties during the trial.
1. The information FIG, acting through Flynn and Rafiekian, and Alptekin, acting through its counsel, provided to Covington and Verderame for the purposes of the public disclosures in the FARA filing is not privileged attorney-client information; and such information may be disclosed without any waiver of privilege by FIG, Flynn, Rafiekian or Alptekin. To the extent that Rafiekian contends that specific statements from him to Covington or Verderame remain privileged because they are not sufficiently related to the FARA filing and the privilege has not been validly waived, the Court will consider those specific statements as the government proffers them before their admission.
2. Rafiekian's statements to Covington, obtained only after the DOJ inquiry concerning FIG's and Flynn's FARA obligations, were within a context and under circumstances sufficiently associated with an adversarial process and the prospect of litigation that Covington's recollections of those statements, including its memorialization of those statements, constitute opinion work product. In re Grand Jury Subpoena, 870 F.3d 312, 317-18 (4th Cir. 2017). Application of the crime-fraud exception to such work product therefore requires a prima facie showing that the attorneys involved were aware of or knowing participants in the criminal conduct or scheme, In re Grand Jury Proceedings #5 Empaneled Jan. 28, 2004, 401 F.3d 247, 252 (4th Cir. 2005), a contention the government has repeatedly and explicitly rejected in this case, see, e.g., [Doc. No. 173] at 1-2. Accordingly, to the extent that Rafiekian's statements to Covington in connection with the FARA filing were otherwise privileged, the crime-fraud exception, if it applied under the facts of this case, would not extend to that work product.
3. Notwithstanding the near absolute immunity enjoyed by attorney opinion work product, where that work product relates centrally to the actions or conduct of a lawyer at issue in a case, such that consideration of the attorney's opinion work product, including their recollections and impressions, are essential to a just and fair resolution, opinion work product protections otherwise applicable do not apply. See, e.g., In re John Doe, 662 F.2d 1073, 1080 (4th Cir. 1981) (finding no opinion work product protection where attorney's prior representation was a target of the grand jury investigation); Sec. Exch. Comm'n v. Nat'l Student Mktg. Corp., 1974 WL 415, *3-4 (D.D.C. June 25, 1974) (finding no opinion work product protection where at issue was what a law firm did and did not know). Here, while there is no contention that Covington or Verderame committed any crime, what they did and why is central to this case as their actions are claimed to have resulted in a crime attributable to Rafiekian. For these reasons, any opinion work product by Covington or Verderame that pertains to the FARA filing is not protected.
Rafiekian has also moved to preclude the government from (1) claiming in its opening statement that evidence exists that the government of Turkey funded FIG's work for Inovo; and (2) arguing in closing that the government of Turkey funded the project. Upon consideration of the Motion, the Court grants the Motion to the extent that the Government may not state in opening statement, or until such time as the Court rules otherwise, that Turkey funded FIG's work for Inovo. It may, however, in opening statement say what the evidence will show concerning what Rafiekian was told about any funding by Turkey.
Rafiekian requests that instead of the ten peremptory challenges typically granted to a criminal defendant he be granted sixteen. Upon consideration of the Motion, the Court will increase Defendant's peremptory challenges from ten to fifteen and the government's peremptory challenges from six to ten.
Rafiekian also requests that the jury voir dire panel be required to complete a questionnaire on the grounds that the high-profile public nature of this prosecution requires more in-depth information than obtainable through the usual voir dire process. Upon consideration of that Motion, the Court concludes that adequate inquiry can be made during the voir dire process without a separate jury questionnaire, and the Motion will therefore be denied. Pursuant to Local Rule 51, the parties should submit their proposed voir dire questions on or before July 8, 2019.
For the foregoing reasons, it is hereby
ORDERED that Defendant Bijan Rafiekian's Motion to Dismiss the Indictment [Doc. No. 190] be, and the same hereby is, DENIED; and it is further
ORDERED that Defendant Bijan Rafiekian's Motion In Limine to Exclude Out-Of-Court Statements by Co-Conspirators [Doc. No. 154] be, and the same hereby is GRANTED in part and DENIED in part; the Motion is GRANTED to the extent that the proffered co-conspirator statements are excluded on the basis that the United States has not presented sufficient evidence of a conspiracy to establish the co-conspirator statements hearsay exception under Fed. R. Evid. 801(d)(2)(E), without prejudice to the presentation at trial of additional evidence concerning the existence of the alleged conspiracy; and the Motion is otherwise DENIED; and it is further
ORDERED that Defendant Bijan Rafiekian's Motion to Dismiss the Indictment and Exclude and Suppress Privileged Information [Doc. No. 163]; the Government's Motions to Establish the Crime-Fraud Exception as to Defendants Rafiekian [Doc. No. 173] and Alptekin [Doc. No. 182]; and Defendant Bijan Rafiekian's Motion for an Evidentiary Hearing [Doc. No. 186] be, and the same hereby are, DEFERRED, pending the presentation of evidence during trial; and it is further
ORDERED that Defendant Bijan Rafiekian's Motion In Limine to Preclude the Government From Arguing that Turkey Funded FIG's Work for lnovo [Doc. No. 165] be, and the same hereby is GRANTED, pending further order of the Court; and it is further
ORDERED that Defendant Bijan Rafiekian's Motion for Additional Peremptory Challenges and a Jury Questionnaire [Doc. Nos. 150 and 152] be, and the same hereby is GRANTED in part and DENIED in part; the Motion is GRANTED to the extent that the Defendant shall have 15 preemptory challenges and the United States shall have 10 preemptory challenges; and it is otherwise DENIED.
The Clerk is directed to forward copies of this Order to all counsel of record.
GEX 61 at 11.
GEX 58 at 3.
