White-Collar Crime

Weed And White-Collar Crime

Prosecutorial discretion swings both ways and that can be a problem.

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As a law student I found the idea that the Supreme Court makes decisions based on concerns about institutional legitimacy — as well as about what the statutes or prior cases say — unacceptably shocking. Why bother having law at all if we’re just going to let public sentiment decide what happens?

Yet it’s hard to argue that it happens (e.g., the rejection of Lochner, Obamacare, etc.) — and it’s hard to argue that it’s bad that it happens (if it happens rarely enough). The Supreme Court can’t let itself get too far left or too far right of the country.

Our government is, like fiat currency and Santa Claus, only legitimate as long as we believe.

The Supreme Court isn’t the only entity that bends based on concerns about institutional legitimacy. Prosecutors do too — even those who aren’t elected.

Unlike a Supreme Court responding to public opinion, when DOJ does it, it can be good or really dangerous. The door to prison should only swing one way.

We’re seeing a change in how DOJ responds to its prosecution decision on two fronts.

First, on a happy note, marijuana is legalizing.

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In three states marijuana is legal to sell, own and grow; in two others it’s legal to own and grow (assuming DC is a state, which it isn’t) and in more than 20 it’s legal for medical or “medical” uses. And in the next few years you’ll see Washington, Colorado, or Oregon style legal markets for marijuana coming to other states like California.

Right now, 58% of the population thinks marijuana should be legal.

Yet even if it’s legal under state law, the federal law hasn’t changed — the Controlled Substances Act is still a problem.

So, in response to these changes in state law and public opinion, the Department of Justice has announced policies where it declines to get too far into the business of going after weed businesses under state law. And regulations have been issued to make banking possible for a marijuana business, though it’s still harder than running a cat grooming business.

If DOJ were less sensitive to changes in state law and public opinion, this loosening wouldn’t come. It’s clearly good that it is.

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The trouble is that sometimes the door swings the other way. Right now, we see the Department of Justice getting more aggressive on financial cases. What happened with insider trading is illustrative; public opinion swung against folks who do anything related to Wall Street after the financial meltdown.

The U.S. Attorney’s Office in New York swung into action — they took an aggressive reading of their authority to prosecute insider trading, which was slapped back by the Second Circuit in Newman (which cert was recently denied on).

If the public wants to go broadly after financial crimes, that’s fine. But pushing a new read of an old statute rather than just pushing a new statute (which would have ex post facto controls) disturbs well-settled expectations about what conduct is going to land someone in prison.

If we, as a society, decide that we want to stop prosecuting people, that’s great — we should. There’s no point in the federal government going after low level weed smokers in Colorado if no one thinks that should be illegal there anyway. Restraint is good.

But bringing cases because of a change in polling is different. Especially when the law is so broad and so vague, if polling drives what our government does, really, how are we different than a very large and well-organized mob?

Matt Kaiser is a white-collar defense attorney at Kaiser, LeGrand & Dillon PLLC. He’s represented stockbrokers, tax preparers, doctors, drug dealers, and political appointees in federal investigations and indicted cases. Most of his clients come to the government’s attention because of some kind of misunderstanding. Matt writes the Federal Criminal Appeals Blog and has put together a webpage that’s meant to be the WebMD of federal criminal defense. His twitter handle is @mattkaiser. His email is mkaiser@kaiserlegrand.com He’d love to hear from you if you’re inclined to say something nice.

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