Law and the Environment

What Does the Libby Conviction Have to Do with Corporate Environmental, Health, and Safety?

In reading the news about the Scooter Libby prosecution, I wondered if professionals in the corporate environmental, health, and safety field were thinking about the conviction's relevance.  What is relevant to the EHS professionals is that federal governmental agencies are using more and more the federal Criminal Code provisions and other federal statutes that contain criminal provisions for making false statements to governmental prosecutors and obstructing justice as a weapon against those they believe are violating federal substantive statutes.  (See Little Known Provision in the Federal Criminal Code Creates Trap for Those Communicating with Government Agencies post in this blog.)

Companies and their employees communicating with governmental agencies with environmental and safety jurisdiction should take care in making statements and providing documents to these agences.  They should attempt to avoid claims that any false statements were made or any obstruction of the investigative process occurred.

Little Known Provision in the Federal Criminal Code Creates Trap for Those Communicating with Government Agencies

 

      Most people involved in corporate environmental compliance are unaware of the potential impact of a provision of the federal Criminal Code that was created apparently mainly to address false statements in the context of securities investigations, but was drafted broadly to encompass potentially a broad range of governmental investigations or proceedings.  Section  1001 of the Criminal provides the following short, but potentially threatening language:

Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative or judicial branch of the Government of the United States, knowingly and willfully--(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;

(2) makes any materially false, fictitious, or fraudulent statement or representation; or

(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title or, imprisoned not more than 5 years, ... or both.

          What relevance does this have for companies and their employees?  The answers is that government agencies and US attorneys have been using Section 1001, as they refer to it, to threaten or to actually prosecute companies or their employees for allegedly making false statements in the context of investigations of potential violations of federal environmental statutes.  The government has been taking the position that this provision is very broad and extends not only to actual and direct false statements, but to creating a false impression or failing to divulge fully facts in a discussion, writing, or statement to the investigating official. 

            While some of the federal environmental statutes contained provisions for prosecution for false statements, Section 1001 may be considered to be advantageous by government officials or attorneys because it may be broader than those found in environmental statutes.

            The government’s knowledge and use of this provision raises concerns for corporate environmental staff and individual business people when they are contacted  by government officials or investigators.  They should exercise caution in how they respond to these inquiries.  Thus, the adage that the cover up may be worse than the crime, certainly may apply.

            In our experience, the governmental investigators appear very knowledgeable of this provision and use it quite aggressively, accusing parties during the investigation before any decision about prosecution has been made.  Investigators may threaten prosecution under this provision, if they believe that a corporate representative is not telling the truth or failing to tell "the whole story"--thereby, in their mind, conveying a false impression. Care should be taken in what is said and what is left unsaid, and any potentially misleading statements.

            Training staff and obtaining the assistance an environmental attorney when a federal environmental investigation begins may be wise to avoid potential claims of false statements and prosecution under Section 1001.   Advising relevant employees, such as environmental staff, plant managers, and certain operational staff, as to how to communicate with federal agencies, in this case those with any form of environmental jurisdiction, such as the EPA, the U.S. Fish and Wildlife Agency, the Materials Management Service, and the Coast Guard, appears to be a wise investment.