Will US Attorney Amanda Marshall’s Leave Affect the Kitzhaber Investigation?

Tuesday, March 17, 2015

Annie Ellison, GoLocalPDX Reporter

U.S. Attorney Amanda Marshall’s unorthodox leave of office comes during one of the state’s most high-profile public corruption investigations.

Just a month before reportedly going on medical leave, Marshall’s office served a sweeping federal subpoena covering 11 government agencies and dozens of individuals as part of an investigation into former Governor, John Kitzhaber, and his fiancee Cylvia Hayes.

Marshall’s absence will not likely affect the outcome of the comprehensive investigation, according to former prosecutor and White House Counsel Scott Coffina of the Philadelphia, PA firm Drinker, Biddle and Reath. Still, the departure leaves another question mark in an already convoluted investigation, which went from an ethics commission review to a state investigation, to federal investigators within months.

“If you don’t have a strong leader, there’s always that possibility that a lot of these cases are realistically run by experienced line assistants [prosecutors],” Coffina said. “Unless she was very hands on.”

Because of the number of full time staff in position and a typically low turnover, a shakeup in leadership does not usually interfere with operations in the U.S. Attorney’s office. Marshall oversees more than 100 attorneys working in the DOJ’s offices in Portland, Medford and Eugene.

Marshall suddenly took a leave, citing medical reasons, Thursday, March 12, not quite a month after asking the Oregon Attorney General's Office to put the brakes on a state-led investigation into Kitzhaber and Hayes. Friday, the Oregonian reported Marshall was being looked at by investigators from the Office of the Inspector General, the arm that investigates the Department of Justice, following reports she was stalking a subordinate, Assistant U.S. Attorney Scott Kerim.

The snap leave, and investigation of a U.S. Attorney are not common, let alone the increasingly strange circumstances of the probe.

“I think this happens very rarely,” Coffina said.

In the interim, Marshall is replaced by Acting U.S. Attorney for Oregon Billy Williams. One indicator of whether or not Marshall’s leave is permanent, may be whether or not the staff she hired remain in their positions.

“If they expect her to come back, they’ll probably keep supervisors in place,” Coffina said.

Marshall and the Kitzhaber Investigation

According to the Oregon Attorney General’s spokeswoman, Kristina Edmunson, Marshall’s office requested AG Ellen Rosenblum chill her department’s inquiry into Kitzhaber until the federal investigation is finished.

“The Oregon Department of Justice temporarily referred our criminal investigation at the request of the U.S. Attorney,” Edmunson said. “The investigation is still open, and will resume at the conclusion of the federal investigation.”

Marshall was appointed to her position in 2009, then confirmed by the senate. Prior to that, Marshall, then a District Attorney in Coos Bay, made a list of finalists chosen by a 13-person committee appointed by Oregon Senators Ron Wyden and Jeff Merkley.

U.S. Attorneys undergo a senate confirmation process, senate questionnaire, background check, and national security check, in greater depth than assistant prosecutors before taking office.

A sitting U.S. Attorney can be replaced at the whim of a president, as was demonstrated by the controversial firing of 11 U.S. Attorneys during the George W. Bush administration.

OIG Investigations

According to OIG staff, it is not uncommon to look at senior officials, but only when they result in prosecution is the information made public.

Other high profile investigations into U.S. attorneys include the conduct of the U.S. Attorney for the District of Arizona Dennis K. Burke, who resigned in 2011 amid controversy over what came to be known as the “gunwalker” scandal, or “operation fast and furious.”

FBI and Bureau of Alcohol Tobacco, Firearms and Explosives (ATF) officials allowed licensed gun dealers to sell weapons to middlemen in the hopes of tracking the guns to arrest Mexican drug cartel leaders.

During the operation, which failed as officials lost track of more than 1,700 of the guns they were tracking, Burke leaked a document to Fox News to discredit an ATF whistleblower, a September 2012 OIG report found. The OIG investigation found Burke lied about leaking the document, and did so to retaliate against the agent, who was concerned the gunrunning operation had gone out of control.

A November 2010 OIG report found 19 U.S. Attorneys expensed more than the government rate for lodging, and sought reimbursement, on 11 or more trips between 2007 and 2009.

In total, the OIG report found those 19 U.S. Attorneys submitted 311 claims seeking reimbursement for lodging over the government rate. The report determined more oversight was needed in enforcing travel compliance.

Neither the U.S. Attorney nor Kerin have spoken to media since Marshall announced her leave to the Oregonian Thursday.

However, in an uncharacteristic move, the OIG released a statement Monday, that indirectly indicates Marshall, not Kerin, is the subject of the investigation.

Related Slideshow: Feds Probe Kitzhaber and Hayes: 10 Things to Know

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10.

It Could Cost Millions

Defense fees for a federal investigation will rack up quickly, more so if the investigation turns into a trial.

“The fees can be exuberant. You can’t do one of these cases for less than half a million dollars,” Solomon Wisenberg, a defense lawyer from Washington D.C. said.

These cases can cost around $2 million in legal fees, according to Wisenberg.

For example Robert Urciuoli, convicted in 2008 for federal charges of conspiracy and fraud in a case involving a former Rhode Island state senator, had $2.15 million for legal expenses.

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9.

FBI Resources

The FBI may have years of records to comb through, but they have the resources to do so—much more than a state criminal investigation would.

A federal investigation is given millions of dollars and a vast supply of manpower. Attorneys say the feds also have more expertise and experience in handling corruption investigations.

If there is something to be found, the FBI has the tools and time to look for it.

Photo: FBI Headquarters in D.C.

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8.

FBI Undercover Investigation a Possibility

Although a subpoena was delivered on Feb. 13, it does not mean the FBI has just started looking into Kitzhaber and Hayes. Joel Bertocchi, a white-collar criminal defense attorney in Chicago, said federal investigations often involve an undercover stage in the beginning.

Special agents are often recording information and meeting with people long before subpoenas are issued.

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7.

Mail Fraud, Wire Fraud and Corruption

Experts agree Kitzhaber and Hayes are most likely being investigated for breaking federal statutes of mail and wire fraud, as well as corruption.

Because Hayes may have used government resources for her personal gain, such as not disclosing conflicts of interest while using government phones or email services for her paid contracts and speaking appointments, it would fall under those statues.

Federal statutes have a broader reach of power than state statutes, according to Wisenberg, giving more options for prosecution.

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6.

11 State Departments Subpoenaed

In the subpoena from the U.S. Department of Justice to the Oregon Department of Administrative Services, a number of state departments were listed.

The following eleven departments are believed to have documents or records that are of interest to the investigation:

-The Office of the Governor

-Government Ethics Commission

-Housing and Community Services Department

-Oregon Department of Justice

-Department of State Lands

-Oregon Department of Revenue

-Department of Administrative Services

-Business Development/Business Oregon

-Department of Community Colleges and Workforce Development

-Department of Energy

-Department of Environmental Quality

Photo: Oregon's Department of Administrative Services was served a comprehensive subpoena into outgoing Governor Kitzhaber and his fiancee, Cylvia Hayes.

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5.

Hayes’ Contracts are the Focus of the Subpoena

Records pertaining to Kitzhaber and Hayes, as well as a number of other individuals are listed on the federal subpoena. However, it appears Hayes’ contracts and dealings with energy groups are the focus of the investigation.

Federal investigators are requesting records involving private companies Hayes and 3E Strategies conducted business with, such as Demos and Clean Economy Development Center, as well as government projects Hayes was involved with.

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4.

Feds Focus on Cases They Can Win

If the federal government is moving forward with the investigation, it most likely means they have a strong case.

Like most prosecutors, Bertocchi said federal investigators focus on cases they know they can win.

“I don’t think anybody, unless they were nuts, would seek to charge a recently-sitting governor,” Bertocchi said. “It doesn’t mean they can’t lose, but you have to take them seriously.”

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3.

A Grand Jury Will Decide to Indict Kitzhaber and Hayes

The documents and wittiness gathered by the FBI’s investigation will be presented to a grand jury of 23 Oregonians in a United States District Court.

Proceedings and information from the grand jury are supposed to be kept secret, but Bertocchi said sometimes the information is leaked.

After hearing the evidence, the grand jury will decided whether or not to indict Kitzhaber and Hayes and bring formal charges.

The grand jury will start procedings on March 10, 2015.

Photo: "The Jury" by John Morgan via Wikimedia CC.

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2.

Federal Investigations Tend to Favor the Prosecution

Federal investigations tend to favor the side of the prosecution, according to Wisenberg.

The history of corruption in a state can also impact the jury. Bertocchi said in Chicago, where political corruption is a common theme, juries are more cynical and less likely to give guilty verdicts.

However, it might be the opposite in a state like Oregon, where big-time political corruption is more unusual, Bertocchi said. It is more likley the defense will have more convicing to do.

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1.

It Could Drag on for Years

Even though the grand jury begins hearing evidence in less than a month, the final outcome could be years away. Tom Hagemann, who served as Assistant U.S. Attorney in Los Angeles, said a very document-intensive case like Kitzhaber and Hayes' could drag on.

If criminal investigations and proceedings do last years, it will make it difficult for Kitzhaber and Hayes to move on with their lives, or find a steady job.