January 28, 2015 Confirmation Hearing:

C-Span Video - Day 1/Part 1 (at 1:12)

Direct link -- promotional video:  http://vimeo.com/118457865

Senator Hatch:  Now I recently read a powerful book, read it in one day.  It’s titled License to Lie: Uncovering Corruption in the Department of Justice.   The author writes about many things, including the debacle that occurred in the misguided prosecution of Senator Ted Stevens, which I thought was out of this world bad.  I was one of the people who testified as to his character, and he was a person of great character. And, as you know, he lost the Senate race because of this type of prosecution.  I know that case.  Ted Stevens was a dear friend of mine, and I testified on his behalf, as I said.  Only after he was convicted did we learn that the prosecutors intentionally hid exculpatory evidence that could have helped his case. Now, these were not mistakes. They were corrupt acts that violated every prosecutor's duty under the Brady v. Maryland decision to turn over exculpatory evidence so the trial will be fair. Now I recommend that you read this book because, if even half of it is true, and I believe it is true, you have a lot of work to do to clean up that Department. Will you consider doing that for me?

U.S. Attorney Lynch:  Thank you, sir, I will.

Senator Hatch:   I appreciate it.

                            C-Span Video - Day 1/Part 3
 (at 2:20)

Senator Tillis:  My final question, Ms. Lynch, is really around the philosophy that you may bring to the Department of Justice.   In December 2014 the Government Accountability Office issued a report that was titled 'Professional Misconduct: DOJ Could Strengthen Procedures for Disciplining Its Attorneys'. There were a couple of example, going back to even, I think the handling of New Orleans police officers related to the Katrina, the Hurricane Katrina, where either misconduct or they had perjured themselves.  Would you agree with me that the Department of Justice employees who would engage in this sort of activity, either through prosecutorial misconduct or through perjuring themselves in court, are they the kind of personnel that you would allow to continue to be employed in the DOJ? 

U.S. Attorney Lynch:  Certainly, Senator, with respect to personnel issues, I take very seriously the integrity of every member of my staff.  And if confirmed as Attorney General, would also take very seriously the professionalism of the members of all the staff of the Department of Justice, all of whom I have found to have been a privilege and a pleasure to work with and to be dedicated career professionals and dedicated to not only to just improving their skills, but the highest professional conduct. When they cross a line, they are dealt with, and that will continue to happen should I be confirmed as Attorney General.  But I will say that, with respect to the staff and the attorneys at the Department of Justice, they are some of the most effective and professional individuals that I have had the pleasure to be affiliated with. 

Senator Tillis:  Well should you be confirmed, since this report was just dated last month, I hope it is something you would take into account as you go into the organization and look at the resources that you have inherited responsibility for. Thank you.

U.S. Attorney Lynch:   Yes.

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TOPIC #2

HSBC

Sampling of articles from the internet, newspapers, etc.
 that Senators & Staff of the Senate Judiciary Committee could be presumed to have read

"Obama pick for AG Let HSBC Off the Hook", New York Observer, November 11, 2014 (Teddy Kim)

"Loretta Lynch's Wall Street friends: what you should know about AG nominee's finance past", Salon, November 11, 2014 (David Dayden)

"Attorney General Nominee Loretta Lynch is Soft on Political Corruption", National Legal & Policy Center, November 17, 2014

"How Eric Holder Tried to Showcase Loretta Lynch", Powerline, January 9, 2015 (Paul Mirengoff)

"Would an Attorney General Loretta Lynch End 'Too Big to Jail'?", Huffington Post, January 27, 2015 (Bartlett Naylor)

"Attorney General Nominee Loretta Lynch Omitted HSBC Interview from Senate Judiciary Committee Questionnaire", International Business Times, January 27, 2015 (Ginger Gibson)

And now, for the questioning --

C-Span Video:  Day 1, Part 2  (at 39:36 mins.)

Senator Blumenthal:  I want to ask you, finally, in the time that I have, about one of the criticisms that has been made of the Department of Justice in its allegedly too lenient treatment of certain corporate defendants as being too big to jail, so to speak, in remarks that you made after the Department of Justice entered into a settlement with HSBC for money laundering, I’m sure you recall it, you said that the settlement had deterred that company but you weren't sure it would deter other companies.  So my question is, whether more can be done to more aggressively prosecute white collar crime, corporate crime, to dispel at least the widespread impression or perception that perhaps the Department of Justice has been too lenient, and, in particular, would you work with me on a bill that I've offered that would make certain corporate officers criminally liable if they are aware of significant potentially deadly risks to workers, workplace safety problems, and fail to act or make it public?  So this bill is called ‘hide no harm’, it’s a bill designed to protect workers on their jobs and it focuses on that part of the potential wrongdoing that may be committed by corporate officers but also again a two-part question, would you consider pursuing more aggressively criminal laws that may be applied to corporate officers who are involved in malfeasance or violations of federal criminal laws generally?

U.S. Attorney Lynch:   Certainly, senator. When it comes to white collar crime or any kind of crime, as a career prosecutor and as US attorney, I've been very aggressive in pursuing those types of cases. With respect to, should I become confirmed as attorney general, I would continue that and direct that the Department of Justice continue its focus on examining the facts of every case, following the law wherever it took us.  At the outset, no individual is too big to jail. No one is above the law.  There are certain situations where we come to a different resolution or may decide that a civil resolution is appropriate but that is only after a full and fair analysis of all the facts and the law and the relevant burdens under the criminal justice system or the civil system.  But that being said, senator, I believe if you look at the record of the Eastern District of New York, we have prosecuted a number of corporate officers for insider trading with respect to the Brooks case and corporate malfeasance in other cases as well as for violations of the FCPA, we have struck significant -- wrung significant concessions from corporations and made major changes in the way in which corporations and financial institutions are structures and operate that as act as a deterrent. We have been clear with respect to the industries within which we are looking that should a corporation not engage in preventive behavior or should they not take seriously the type of investigation that we bring, the criminal charges will be brought.

Senator Blumenthal:  Thank you and I know of your very aggressive and distinguished record in this area.  It's one of the reasons why I strongly support you and I look forward to voting for you and working with you on all these topics…

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TOPIC #3
 
SECRET DOCKETS, MANDATORY VICTIMS RESTITUTION ACT & CRIME VICTIMS' RIGHTS ACT

Sampling of articles from the internet, newspapers, etc.
 that Senators & Staff of the Senate Judiciary Committee could be presumed to have read

"Loretta Lynch questioned over secret deal depriving fraud victims of $40M", January 4, 2015 (Jim McElhatton)

"What About U.S. Attorney General Designate Loretta Lynch -- 'Cooperators' -- Possible 'Selective NON- or UNDER Prosecution' in certain cases -- AND something called the 'Secret Docket", January 13, 2015

"Senate urged to ask AG nominee Loretta Lynch about stock fraud case", Washington Times, January 22, 2015, (Jim McElhatton) 

        January 21, 2015 letter, posted on the Senate Judiciary Committee's webpage for the nomination

"Has Loretta Lynch Violated the Rights of Crime Victims?", Powerline, January 24, 2015 (Paul Mirengoff)

"Uncomfortable Questions for Loretta Lynch" , Washington Times, January 26, 2015 (George Landrith)

"Questions for Loretta Lynch on secret dockets", The Hill, January 28, 2015 (Frederick Oberlander, Richard E. Lerner)

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TOPIC #4

CIVIL ASSET FORFEITURE 

Sampling of articles from the internet, newspapers, etc.
 that Senators & Staff of the Senate Judiciary Committee could be presumed to have read

"Loretta Lynch's Money Pot: Someone should ask the AG nominee about the Hirsch brothers", Wall Street Journal, November 21, 2014

"Regarding the Next Attorney General", Wall Street Journal, November 13, 2014 (letter to the editor)

"Loretta Lynch Has No Problem with Civil Asset Forfeiture -- and That's A Problem", Forbes, November 25, 2015 (George Leef)

"Questions for attorney general nominee Loretta Lynch", Washington Post, January 9, 2015 (George Will) 

"447,000 Seized by Government Will Be Returned to Business", New York Times, January 20, 2015 (Shaila Dewan) 

"Questions for Loretta Lynch", Washington Times, January 21, 2015 (editorial)

"Obama AG nominee Loretta Lynch quietly dropped $450,000 civil forfeiture case a week before the hearings", Raw Story, January 26, 2015 (Edmund Newton)

And now, for the questioning --

C-Span Video - Day 1/Part 1 (at 2:33:50 hours)  

Senator Lee:  I want to talk about civil forfeiture for a minute. Do you think it is fundamentally just and fair for the government to be able to seize property from a citizen without having to prove that the citizen was guilty of any crime and based solely on a showing that there was probable cause to believe that that property was in some way used in connection with a crime?  

U.S. Attorney Lynch:  Senator, I believe that civil forfeiture, civil and criminal forfeiture are very important tools to the Department of Justice as well as our state and local counterparts through state laws in essentially managing or taking care of the first order of business, which is to take the profit out of criminal activity.  With respect to civil forfeiture, certainly as implemented by the Department, it is done pursuant to supervision by a court.  It is done pursuant to court order and I believe that the protections are there.  What I would also, sorry.  

Senator Lee:  What if you just ask the average person on the street whether they thought the government could or should be able to do that, should the government be able to take your property absent a showing that you did anything wrong, thereafter requiring you as a condition for getting your property back, whether it is a bank account that has been seized or frozen, whether it is a vehicle that has been seized, that you would have to go back and prove your innocence. So you are guilty, in essence, until proven innocent – at least guilty in the sense that your property is gone.  You think your average citizen would be comfortable with that?  

U.S. Attorney Lynch: Well I certainly can’t speak of what the average citizen would be aware of there.  I certainly understand there has been a lot of discussion and concern over -- over asset forfeiture as a program as expressed by a number of people.   

Senator Lee:  And particularly at the state level, such that some states have adopted in response to a pretty widespread citizen outcry laws significantly restricting use of civil forfeiture proceedings for that very reason, which leads to why I raise this with you.  It is my understanding that the Department of Justice has, in many instances, been used as a conduit through which law enforcement officials at the state and local level can circumvent state laws restricting the use of civil forfeiture within the state court system.  In other words where, under the state law established system, that forfeiture is prohibited, people can go through the Department of Justice and the Department of Justice will take out a fee, maybe 20% of the value of the assets seized and those can be returned.  It’s a process known as adoption.  Don't you think most Americans would find that concerning if the federal government is facilitating efforts to circumvent state laws that are designed to prohibit the very thing that they are doing.

U.S. Attorney Lynch:  I think that a number of people would have questions about how the Department of Justice manages its asset forfeiture program and my understanding is that those questions have been raised about various aspects of it.  My understanding is that the Department is undertaking a review of its asset forfeit program and certainly, as U.S. Attorney, I'm aware of the fact that the adoption program that you have just described which did raise significant concerns from a number of parties has actually been discontinued by the Department. That is the guidance we've recently received with some exception for things like items of danger with explosives and the like. But it is part of an on-going review of the asset program and certainly, should I be confirmed I look forward to continuing that review. And I would also say, senator, that I look forward to continuing these discussions with you as you express concerns and interested on behalf of constituents or others as an important part of the Department being transparent as possible in explaining how it operates.  Asset forfeiture is a wonderful tool. We return money to victims, we take the profit out of crime, but, as with everything we do, we want to make sure we are being as responsive as possible for those people were serving.

Senator Lee:  Thank you.  I look forward to those discussions. I see my time is expired.

C-Span Video:  Day 1, Part 2  (at 46 mins.)

Senator Lee:  “…I’d like to go back to civil forfeiture, if that’s alright, which was the topic we were discussing earlier before I left for the last vote.  First of all, I want to get back to the question I asked at the outset, do you think it's fair, is it fundamentally just, that someone can have their property taken from them by the government without any evidence that they have committed wrongdoing, based solely on a showing by the government, based on a probable cause standard, that their property might have been involved in the commission of a crime, perhaps without their own knowledge, their own consent, their own  awareness on any level, do you think that's fair? 

U.S. Attorney Lynch:  “Senator, I think that we have a very robust asset forfeiture program, both criminal and civil. With respect to civil forfeiture, I’ve looked at the program in general.  Again, the Department is conducting a review of the forfeiture program and with respect to civil forfeiture there are legal safeguards at every step of the process.  Certainly as instituted or implemented by my office and from my understanding from my U.S. attorney colleagues, so there will be judicial review before there can be attachment or seizure as well as an opportunity to be heard. And that standard must be met before the seizure warrant can be issued.    

Senator Lee:  I understand, I understand.  A lot of Americans don't believe that's fundamentally fair and again that's why in many states there have been laws enacted that restrict the use of civil forfeiture under those circumstances and impose additional requirements, which is why I raised the concern about the process by which the Department of Justice has on occasion in the past used something known as adoption whereby they will take something that could not be forfeited under state law in state court and they'll utilize the resources of the U.S. Department of Justice to assist in the forfeiture.  The U.S. Department of Justice retains 20% and then yields back 80% to the state or local law enforcement agency. This is troubling and you appear to be aware when I asked you about this, you appeared to be aware of an order that Attorney General Holder issued just about a week and a half or two weeks ago, I believe it was on January 16^th, restricting that.  So I assume you are familiar with that order. 

U.S. Attorney:  There was an order or a policy directive from the Attorney general to the field and as U.S. Attorney I did receive that and it essentially ends the adoption program.  As you point out, senator, a number of states now do have a robust asset forfeiture program on their own.  When the federal program was being instituted, at least the research shows, many states did not have this program and so a lot of the local law enforcement agencies that have been using the adoption program initially did not have a venue to effectuate legal seizure of property that had been used in a crime. The adoption program began several years ago, primarily as a response to that.  That has changed. That legal landscape is very different and certainly that was one of the reasons set forth in our discussions when the policy change was made.

Senator Lee:  OK.  So, this order that the Attorney General issued on January 16^th, you refer to it as essentially ending the adoption program, again, the program which the federal government can assist state and local law enforcement agencies in circumventing their own state law restrictions on civil forfeiture.  But when you read the order, you see that it is subject to several exceptions. One exception applies with respect, and I think you referred to this briefly before when you and I spoke a few hours ago, one exception relates to property that directly relates to public safety concerns.  Fair enough.  Then you turn the next page and look at the second to last paragraph which contains some additional carve-outs.  This order does not apply to (1) seizures by state and local authorities working together with federal authorities in a joint task force; (2) seizures by state and local authorities that are the result of joint federal, state investigations or that are coordinated with federal authorities, or (3) seizures pursuant to federal seizure warrants obtained from federal courts to take custody of assets originally seized under state law.  So, Ms. Lynch, as I see it, Ms. Lynch, this order while purporting to end this adoption program as you say is riddled with loopholes.  It’s riddled with loopholes that effectively swallow the rule which seems to be a recurring theme today which is something that concerns me greatly with this Department.  I understand this order was issued, has been issued prior to your confirmation -- after your nomination prior to any confirmation vote on your nomination, but I would just ask you to just take into account these concerns and to work with me moving forward on making sure that our civil forfeiture programs don't get out of control. But, would you agree with me that we really ought to find ways to stop federal law enforcement agencies from helping state governments to circumvent their own state law restrictions on civil forfeiture?

U.S. Attorney Lynch:  Senator, I believe that the policy change that ended the adoption program certainly ends that as the problem that had been raised.  As you pointed out, these were situations where local law enforcement made an initial stop or seizure, so the seizure was not essentially begun by a federal agent or partner and then the matter was brought to the processing through the asset forfeiture equitable sharing system therein.  The other situations to which you refer where there is a federal-state task force or a joint investigation really are situations where there’s actually is a federal case from the outset and there would not be the issue of having to review the state laws and they would not be an option in that case, because again the case would be under federal jurisdiction from the very beginning. So, as you pointed out, the initial adoption program did raise concerns and I understand that those have been discussed in the public discussion venue as well as in law enforcement circles as well about the issue where the state has a robust system of asset forfeiture, but that system is not being used and the federal system is being used instead.  The adoption program ends that practice.   

Senator Lee:  It ends it, but subject to some very large loopholes and so I just ask you to be aware of that.  And, I’d like to discuss that with you moving forward…

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