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Tuesday, April 1, 2014

Secret police bonuses for informants

Prosecutors in Durham, North Carolina, say they were unaware of a ten-year program under which police paid informants extra money to testify in drug cases. Story here: Durham Police bonus payments to informants could violate defendants' rights. Since prosecutors are responsible for providing discovery to defendants, these payments were not disclosed as required.

Law review article on informant bounties

As the informant model spreads from traditional criminal law to administrative enforcement agencies like the IRS and the SEC, some have questioned its efficacy: do bounties work? are they a good idea in the white collar context? See for example this article from Forbes on the use of cash bounties, and this post: IRS expands use of informants.
This article--Bounties for Bad Behavior: Rewarding Culpable Whistleblowers under Dodd-Frank and the Internal Revenue Code--explores the use of the criminal snitch model in the white collar context. Here's the abstract:
In 2012, Bradley Birkenfeld received a $104 million reward or "bounty" from the Internal Revenue Service ("IRS") for blowing the whistle on his employer, UBS, which facilitated a major offshore tax fraud scheme by assisting thousands of U.S. taxpayers to hide their assets in Switzerland. Birkenfeld does not fit the mold of the public's common perception of a whistleblower. He was himself complicit in this crime and even served time in prison for his involvement. Despite his conviction, Birkenfeld was still eligible for a sizable whistleblower bounty under the IRS Whistleblower Program, which allows rewards for whistleblowers who are convicted conspirators, excluding only those convicted of "planning and initiating" the underlying action. In contrast, the whistleblower program of the Securities and Exchange Commission ("SEC") under the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), which was modeled after the IRS program, precludes rewards for any whistleblower convicted of a criminal violation that is "related to" a securities enforcement proceeding. Therefore, because of his conviction, Birkenfeld would not have been granted a bounty under Dodd-Frank had he blown the whistle on a violation of the federal securities laws, rather than tax evasion. This Article will explore an area that has been void of much scholarly attention -- the rationale behind providing bounties to whistleblowers who have unclean hands and the differences between federal whistleblower programs in this regard. After analyzing the history and structure of the IRS and SEC programs and the public policy concerns associated with rewarding culpable whistleblowers, this Article will conclude with various observations justifying and supporting the SEC model. This Article will critique the IRS's practice of including the criminally convicted among those who are eligible for bounty awards by suggesting that the existence of alternative whistleblower incentive structures, such as leniency and immunity, are more appropriate for a potential whistleblower facing a criminal conviction. In addition, the IRS model diverges from the legal structure upon which it is based, the False Claims Act, which does not allow convicted whistleblowers to receive a bounty. In response to potential counterarguments that tax fraud reporting may not be analogous to securities fraud reporting, this Article will also explore the SEC's recent trend of acting increasingly as a "punisher" akin to a criminal, rather than a civil, enforcement entity like the IRS. In conclusion, this Article will suggest that the SEC's approach represents a reasonable middle ground that reconciles the conflict between allowing wrongdoers to benefit from their own misconduct and incentivizing culpable insiders to come forward, as such persons often possess the most crucial information in bringing violations of the law to light.

New evidence in Willingham case highlights role of informant

Cameron Todd Willingham was wrongfully executed for the arson deaths of his three children based on shoddy forensic expertise and the testimony of a single jailhouse snitch. See this New Yorker article. Now the Innocence Project has uncovered further evidence that the prosecutor in the case--now a judge--lied about the informant's deal. Here's the story: New Evidence Suggests Cameron Todd Willingham Prosecutor Deceived Board of Pardons and Paroles About Informant Testimony in Opposition to Stay of Execution.

Orange County jailhouse snitch operation

The District Attorney's Office in Orange County is accused of running an unconstitutional jailhouse snitch program, much like the infamous one in Los Angeles that ended twenty years ago. See these stories from the L.A. Times , the Voice of OC, and and Orange County Register. From the Register:
[Defense attorneys] say sheriff's deputies, including one who worked as a "handler" for jailed informants, arranged for informants to be placed next to selected inmates and lure them into making incriminating statements. Deputies and prosecutors then conspired to hide the fact the men were informants from defense attorneys and pretended their encounters were coincidental, despite the longstanding legal requirement that prosecutors turn over information that could help the defense.

Air Force academy pressures cadets into snitching

The Colorado Springs Gazette ran this extensive story about "a secretive Air Force program [that] recruits academy students to inform on fellow cadets and disavows them afterward." Story here: Honor and Deception, and also Fox News story here. The program--which pressures cadets, especially those of color, into violating Academy rules under pressure of expulsion--appears to exhibit the classic corrosive costs of informant culture. From the Gazette report:
For one former academy student, becoming a covert government operative meant not only betraying the values he vowed to uphold, it meant being thrown out of the academy as punishment for doing the things the Air Force secretly told him to do....Eric Thomas, 24, was a confidential informant for the Office of Special Investigations, or OSI -- a law enforcement branch of the Air Force. OSI ordered Thomas to infiltrate academy cliques, wearing recorders, setting up drug buys, tailing suspected rapists and feeding information back to OSI. In pursuit of cases, he was regularly directed by agents to break academy rules....Through it all, he thought OSI would have his back. But when an operation went wrong, he said, his handlers cut communication and disavowed knowledge of his actions, and watched as he was kicked out of the academy....The Air Force's top commander and key members of the academy's civilian oversight board claim they have no knowledge of the OSI program. The Gazette confirmed the program, which has not been reported in the media through interviews with multiple informants, phone and text records, former OSI agents, court filings and documents obtained through the Freedom of Information Act. The records show OSI uses FBI-style tactics to create informants. Agents interrogate cadets for hours without offering access to a lawyer, threaten them with prosecution, then coerce them into helping OSI in exchange for promises of leniency they don’t always keep. OSI then uses informants to infiltrate insular cadet groups, sometimes encouraging them to break rules to do so. When finished with informants, OSI takes steps to hide their existence, directing cadets to delete emails and messages, misleading Air Force commanders and Congress, and withholding documents they are required to release under the Freedom of Information Act. The program also appears to rely disproportionately on minority cadets like Thomas.