Conference Tackles Federal Criminal Code Inadequacies, Overcriminalization

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By Jessica DaSilva

May 27 — Overcriminalization and a lack of mens rea reform place the tallest hurdles before American businesses and entrepreneurs, according to lawmakers and other speakers at a May 26 conference.

Two U.S. legislators book-ended the conference, with Rep. Bob Goodlatte (R-Va.) emphasizing the need to reduce federal crimes and Sen. Orrin Hatch (R-Utah) highlighting the need for a default intent standard in federal laws.

The conference—a joint partnership between the U.S. Chamber of Commerce's Institute for Legal Reform and the National Association for Criminal Defense Lawyers—coincided with the release of two associated studies: “ Enforcement Gone Amok: The Many Faces of Over-Enforcement in the United States,” which details case studies of over-enforcement against U.S. businesses, and “ DOJ's New Threshold for ‘Cooperation': Challenges Posed by the Yates Memo and USAM Revisions ,” which delivered opposition to the Justice Department's shift in policy for cooperation credits.

What is Illegal?

Goodlatte set the tone for the morning's panels when he admitted that Congress and federal agencies overreached over the course of decades in passing laws and regulations with severe criminal penalties and vague standards for how prosecutors should properly enforce them.

That is how the federal criminal code wound up with 5,000 federal crimes and an estimated 300,000 regulations that likely contain criminal penalties, he explained.

“[Americans] can't possibly be expected to read and understand what is illegal,” Goodlatte said. “‘Ignorance of the law is no excuse' has become a burden.”

That sentiment was echoed by speakers on two panels, who discussed the rise of overcriminalization in the federal criminal code and how it fed into the overzealous prosecution of businesses and their employees.

Kate Comerford Todd, senior vice president and chief counsel for the U.S. Chamber Litigation Center, said during the first panel that her first encounter with overcriminalization was as a child. Todd said her friend's father, a fireman, faced criminal penalties for allegedly misusing a Smokey Bear symbol.

She compared the incident to her work, saying that U.S. businesses want to know what the rules are so they can legally engage in innovation and growth. The sheer number of statutes makes that a difficult task, she said.

The federal criminal code is “a maze with shifting walls and landmines in it,” Todd said.

‘Someone to Blame.'

John F. Lauro— a principal at the Lauro Law Firm, with offices in Tampa, Fla., and New York—agreed, explaining that his clients are often blindsided when they are accused of a crime.

“Most business leaders don't think about it because they're not criminals,” Lauro said. “They don't think about criminal law until criminal law comes knocking on their door.”

Kurt Mix, a former engineer for BP Plc who first responded to the 2010 oil spill in the Gulf of Mexico, described a four-year-long investigation and court battle to fight criminal charges for deleting text messages on his personal mobile phone that were sent during his search for a solution to stop the spill, but focused on personal conversations with a friend unrelated to the spill.

Although he was eventually acquitted of his charges and pled to a low-level misdemeanor for not seeking permission to delete the text messages, Mix said his experience resulted from a governmental task force that was not focused on justice.

“When you have a disaster, we owe the public an explanation and a fair investigation,” Mix said. “They deserve to know and they want to be assured that we learned from the mistake and it won't happen again. There should definitely be investigations, but searching for the truth and not for someone to blame.”

‘Lazy' Prosecutors

In the afternoon, another panel of speakers addressed the DOJ policy change in awarding businesses cooperation credits.

The DOJ announced a heightened standard for companies to receive cooperation credit in a September 2015 memorandum written by Deputy Attorney General Sally Quillian Yates (97 CrL 698, 9/16/15). The Yates memorandum now requires companies to turn over “all relevant facts” stemming from individual employees’ misconduct in companies’ alleged white collar crimes.

Attorneys on the panel discussed the chilling effect on corporate relationships and threat to attorney-client privilege resulting from the Yates memorandum.

Professor Ellen S. Podgor, of the Stetson University College of Law in Gulfport, Fla., said the initiative fell in line with behaviors from “millennial prosecutors, who are basically lazy.”

Those prosecutors want the alleged criminals to do the work for them, said Podgor, who teaches in the areas of white collar crime and domestic and international criminal law.

Podgor, a former deputy prosecutor and criminal defense attorney, said that same laziness drives millennial prosecutors to charge people with obstruction of justice or perjury, rather than real crimes because they're easier to prove.

Moderator Barry Boss, co-chair of criminal defense and internal investigations at Cozen O'Connor in Washington, pushed back and asked Podgor about prosecutors' heavy workloads.

“They're charging a lot of things they shouldn't be charging,” she responded. “Maybe they need to focus on some of the real crimes going on out there.”

A Chilling Effect

Speaker Lisa A. Mathewson, a white collar criminal defense attorney based in Philadelphia, said the Yates memorandum wasn't a dramatic change. It was merely a codification of an unwritten and common policy at the DOJ to get corporations to comply with investigations by turning over individual employees.

Because companies are now expected to turn over any information on the individual allegedly engaging in illegal conduct, Mathewson said the experience boils down to one question: “Would you rather get fired or get indicted?”

Matthew S. Miner—a partner at Morgan, Lewis & Bockius LLP in Washington—agreed, saying companies are at a loss in explaining the policy to employees. If they bring in attorneys to explain that businesses are required to turn over information on individuals, he said it will likely create a chilling effect on workers who might have previously felt comfortable telling the company's lawyer about suspicious conduct.

However, Mathewson said the Yates memorandum provided one benefit to her practice

Mathewson said the Yates memorandum gave her proof of that policy to show her individual clients, who are usually shocked at the beginning of an investigation.

“It is world rocking at an essential level to be told that you are potentially in the government's sights,” she said. “For me to sit down and say your company is likely going to turn on you, they may not get their heads around that. Now I have a piece of paper I can show them saying they are required to do it.”

Mens Rea Reform

The final panel and closing remarks all focused on the need for a default intent standard in the federal criminal code.

In his closing remarks, Hatch said while media attention tends to focus on the criminal sentencing reform bill making its way through Congress, the reform measure is inadequate without addressing mens rea reform.

Lecturers on a public policy panel supported that sentiment earlier in the day.

Based on research conducted with The Heritage Foundation on the 109th Congress, Shana-Tara O'Toole, white collar crime policy director for the National Association of Criminal Defense Lawyers, Washington, said that as many as 65 percent of the studied federal crimes enacted by that Congress lacked an adequate intent element.

Christopher Bates, counsel to Hatch on the Senate Judiciary Committee, said the one benefit resulting from the debate about a default intent standard is awareness.

Since working for Hatch on the judiciary committee for the past year and a half, Bates said he has received an increase in phone calls from other legislators' offices to ask whether proposed laws that feature criminal penalties also include a sufficient mens rea standard.

Bates further explained that a default mens rea provision wouldn't prevent Congress from amending laws to include higher or lower intent elements.

It would merely act as a safeguard to ensure vague laws aren't used to prosecute innocent conduct—a comment Hatch included in his keynote address.

“Default mens rea won’t by itself reduce the number of federal crimes,” Hatch said. “It reduces the chance of Congress turning innocent actions into federal crimes.”

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To contact the editor responsible for this story: C. Reilly Larson at