Premature Articulation to the Media Comes Back to Haunt Defendant in SDNY Case

Guest Contributor Lynn Goodman, Esq., writes:

In June 2006, reporter Charles Forelle of The Wall Street Journal wrote an article questioning the options award practices of executives at Monster Worldwide, Inc., the operator of the web site Monster.com.  It earned him a Pulitzer, and now, a seat in the witness box of a criminal trial.  In his piece, Forelle had included several quotes from James Treacy, a former Monster executive, who had apparently benefited from the company’s options timing practices.  Two years later, Treacy was indicted in the SDNY for securities fraud in the backdating of options – in part because of the Journal’s investigative reporting on the issue.  The government subpoenaed Forelle to testify about the questions posed to defendant Treacy and his responses in the preparation of the Journal article.  The Journal moved to quash.  In another notable decision on the grey area separating the interests of a free press and those of law enforcement, United States v. Treacy, 2009 WL 738848 (S.D.N.Y. March 23, 2009), SDNY Judge Rakoff – in his third decision on this topic in the space of a month, see here – denied the newspaper’s request.  The case underlines the risks of defendants or potential defendants talking to the media (if such an elementary point needs underlining). 

The Court’s Decision

Judge Rakoff begins by pointing out that a reporter’s First Amendment privilege to protect information obtained in the newsgathering process is limited by the countervailing public interest in the administration of justice.  In the Second Circuit, the reporter’s privilege can be overcome by a showing that the information sought is critical to the maintenance of the claim and not obtainable from other available sources. The privilege is more narrowly circumscribed when nonconfidential information is sought, such as in the instant case, in which a journalist is called upon to confirm the accuracy of statements published in a media story.  In such a case, Judge Rakoff notes, federal courts routinely permit the testimony of journalists to confirm that statements published in a news article were, in fact, made by the defendant and accurately reported.  Since a defendant has a right not to testify at his own trial, such out-of-court statements may be the only source of information indicating the defendant’s state of mind and other elements of the claim.  The court said it would limit the Government’s questions to those which were necessary to confirm the context and veracity of the defendant’s statements.

Comment

Even the most seemingly innocuous statements made to the media may come back to haunt a defendant years later. The Wall Street Journal article in question contains just a few quotes from defendant Treacy, but the government argued that these statements were evidence of the defendant’s role in the alleged conspiracy and consciousness of guilt, and the court found the claim plausible.  This is not a new problem.  In a 1990 case out of the Northern District of New York, statements made to the media were included in an indictment as overt acts in furtherance of a conspiracy to incite violence (United States v. Markiewicz, 732 F. Supp. 316 (N.D.N.Y. 1990).  And given the ubiquity of the Internet now, attorneys and clients should be aware that statements made to the media or in public fora are fair game as proof in criminal proceedings.  
 
Lawyers: David Fragale, Evan Barr, Sandra Cavazos, Steptoe & Johnson LLP (defendant); AUSAs Deirdre McEvoy, Joshua Goldberg.