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United States v. Woods

United States District Court, W.D. Arkansas, Fayetteville Division

March 2, 2018

UNITED STATES OF AMERICA PLAINTIFF
v.
JONATHAN E. WOODS; OREN PARIS III; and RANDELL G. SHELTON, JR. DEFENDANTS

          MEMORANDUM OPINION

          TIMOTHY L. BROOKS, UNITED STATES DISTRICT JUDGE.

         This is a criminal case in which the Defendants, Jonathan Woods, Oren Paris, and Randell Shelton, have been charged in a seventeen-count indictment[1] with conspiring to bribe Mr. Woods while he was a state senator in the Arkansas General Assembly. See Doc. 74. All three Defendants vehemently deny these charges, and have indicated that they will exercise their right to a speedy and public trial.

         However, the last seven months of these proceedings have had very little to do with the substance of the Government's charges against the Defendants. Instead, this case has become consumed with numerous heated accusations of Governmental misconduct that the Defendants allege occurred during both the pre-indictment investigative process and the post-indictment discovery process. The Defendants have filed numerous motions on this topic, some of which the Court has already ruled on, and others of which are still awaiting decision. Over the last couple of months, the Court has conducted four days of evidentiary hearings on these issues, at which a great deal of exhibits and testimony have been received. Now that the Court has considered all of the arguments and evidence that have been received on these matters, it is prepared to rule on all of the motions that are still pending in this case, which will be done in this Opinion and its accompanying Order. Along the way, the Court will either reject or remedy, as appropriate, every instance of alleged Governmental misconduct that has not already been addressed by any prior rulings in this case.

         Tomorrow this case returns to being about the seventeen charges that the Government has brought against these Defendants. The Defendants have pleaded not guilty and are presumed innocent. They will have the opportunity to hold the Government to its burden of proof at a public trial before a jury of their peers. That trial will begin a little over a month from now, on April 9, 2018.

         I. BACKGROUND

         The charges in this case arise from a multi-year federal investigation into accusations of public corruption against certain Arkansas legislators. The General Improvement Fund ("GIF") was established by the Arkansas General Assembly, for the purpose of using leftover taxpayer dollars to fund projects at the community level. Lawmakers throughout the state had some amount of individual discretion to steer GIF funds to projects of their own choosing. For example, a legislator might direct a GIF grant to a rural volunteer fire department for the purchase of new equipment. But however noble that might sound in theory, the Arkansas Constitution prohibits the disbursement of public funds for purposes that are not distinctly stated in an appropriations bill. See, e.g., Wilson v. Walther, 2017 Ark. 270, at *1-*5, *9-*11. And according to the Government's theory in this case, the GIF grant process was, in practice, ripe for abuse and a conduit for corruption.

         The Government's investigation into these and related matters is still ongoing, and it extends beyond the individuals and acts that have been charged in this particular case. Among other things, the investigation involved the tracing of legislative acts, the making and approval of GIF grants on a regional level, and the ensuing paper trail of disbursements, receipts, and proof that all of the proceeds were used as authorized. This dragnet involved the collection of an enormous number of documents-a number that has been represented to the Court as extending into the millions. Of course, only some fraction of GIF grant transactions are suspected of involving corruption. And whatever that fraction may be, the transactions that underlie the charges in this case are a still smaller fraction of it.

         As previously mentioned, Mr. Woods is a former state senator. Mr. Paris is the president of a bible college, and Mr. Shelton is a businessman. Essentially, the Government alleges that these three Defendants entered into a conspiracy under which Mr. Woods would cause GIF funds to be disbursed to Mr. Paris's college, but with a portion of those funds being funneled back through Mr. Shelton's business to Mr. Woods for his own personal use. The Government also alleges that there was a fourth member of this conspiracy-former state representative Micah Neal-who also received kickbacks from Mr. Paris through Mr. Shelton. Unlike the three Defendants in this case, Mr. Neal admits to the existence of this scheme and to his receipt of kickbacks under it. More than a year ago, in a separate criminal case before this Court, Mr. Neal entered a guilty plea to one count of Conspiracy to Commit Honest Services Mail and Wire Fraud, see Case No. 5:17-cr-50001, Doc. 5, and he is expected to testify as a cooperating witness for the Government against these three Defendants at their trial in April.

         Mr. Neal began cooperating with the Government in January of 2016, roughly a year before he was formally charged, and almost immediately after he first learned that he was facing potential criminal charges. Throughout the period of his cooperation, Mr. Neal has been represented by an attorney named Shane Wilkinson. At some point in March 2016, Mr. Neal decided to begin secretly recording his conversations with Mr. Woods and others. He made the Government aware of this decision, but he and the Government both maintain that it was his decision alone and that the Government never asked or directed him to make these recordings.

         Beginning in November 2015, Mr. Woods also cooperated for some time with the Government's investigation, while he was represented by an attorney named W.H. Taylor. However, in March 2016, Mr. Woods fired Mr. Taylor, hired his current counsel, Patrick Benca, and stopped cooperating with the Government. Mr. Woods and his two codefendants were indicted on March 1, 2017, roughly two months after Mr. Neal entered his guilty plea. Their trial was originally set to begin on May 3, 2017. But on Mr. Woods's motion, the trial date was continued to December 4, 2017. See Docs. 57-58.

         On July 31, 2017, Mr. Woods filed a Motion and Request for Hearing (Doc. 63), arguing that the Government violated his Sixth Amendment right to counsel by having Mr. Neal make secret recordings of conversations with Mr. Woods while it knew Mr. Woods was represented by counsel. The Government, as noted a couple of paragraphs above, denied having played any role in the making of those recordings. See Doc. 67, pp. 9-10. But the Court saw no need to resolve this factual dispute, because even if Mr. Woods's view of the facts were correct, the Sixth Amendment right to counsel does not attach until adversarial judicial criminal proceedings have been initiated, which had not yet occurred when these recordings were made. See Doc. 72, pp. 2-3. So the Court denied Mr. Woods's Motion and Request for Hearing, id. at 4, and it likewise denied Mr. Woods's later Motion and Request for Reconsideration (Doc. 83) of that earlier ruling, see Doc. 128.

         Meanwhile, on September 8, 2017, Mr. Paris filed a Motion to Suppress (Doc. 73), arguing, among other things, that this Court should suppress confessional statements that Mr. Woods proffered to the Government while he was still represented by Mr. Taylor. Mr. Paris argued that these statements of Mr. Woods were the product of coercion by his attorney, Mr. Taylor, who Mr. Paris insinuated was colluding with FBI Special Agent Robert Cessario to pressure Mr. Woods into giving false confessions. See Id. at 7-13. The Court eventually denied Mr. Paris's Motion, see Doc. 128, but not before that Motion had prompted the Government to gather up every record of communication it had with Mr. Taylor during the relevant time period, present it all to the Court ex parte under Fed. R. Crim. P. 16(d)(1), [2] and request a ruling that none of it was discoverable by the Defendants in this case, see Docs. 120, 124.

         At an ex parte hearing on these materials, the Court ruled in the Government's favor with respect to the vast majority of the Government's proffered documents, finding that they were wholly irrelevant to the claims and defenses in this case, and therefore not discoverable. However, there were three documents with respect to which the Court ruled against the Government.

         One such document was a written statement that had been provided to the Government while Mr. Taylor was still representing Mr. Woods. See Doc. 124, pp. 28-30. The Court ordered the Government to produce this statement to all of the Defendants, because although the Government had initially been under the impression it was a communication by Mr. Taylor, it appeared more likely to the Court that it was actually a statement by Mr. Woods himself that had been conveyed to the Government by Mr. Taylor while Mr. Woods was still cooperating. See Doc. 251, pp. 59-64; Fed. R. Crim. P. 16(a)(1)(B)(i).

         Another document that the Court ordered the Government to produce was an email exchange between Mr. Taylor and the Government, after Mr. Taylor's representation of Mr. Woods had ended, about the source of Mr. Woods's payment of attorney fees to Mr. Taylor. See Doc. 124, p. 33. It appears that potential forfeiture implications were what motivated this exchange. See Doc. 284, pp. 66-68. The Court ordered the Government to produce this document to Mr. Woods only, and to inquire of him whether he objected to it being shared with his codefendants. See Doc. 251, pp. 65-68.

         The third document that the Court ordered the Government to produce consisted of three pages of notes that were handwritten by Mr. Taylor, about Mr. Woods, while Mr. Woods was still cooperating with the Government. See Doc. 124, pp. 25-27. Mr. Taylor had originally shown at least some of these notes in February 2016 to counsel for the Government, Kenny Elser, in the course of representing Mr. Woods. At that time, Mr. Taylor had also offered to give Mr. Elser a physical copy of those notes; Mr. Elser responded that he did not need a physical copy then, but that he would follow up with Mr. Taylor if his needs changed. That follow-up eventually occurred-but not until around October 2017, when the Government was gathering materials for the aforementioned ex parte motion, and long after Mr. Taylor's representation of Mr. Woods had ended. True to his word, Mr. Taylor then provided those notes to Mr. Elser. As with the forfeiture-related communications, the Court ordered the Government to produce these notes to Mr. Woods only, and to ask him whether he would object to them being shared with his codefendants. See Doc. 251, p. 57.

         The Government complied with these orders, and upon receipt of the Government's discovery and inquiry, Mr. Woods responded that he would indeed object to any disclosure to his codefendants of Mr. Taylor's handwritten notes and communications with the Government about the source of Mr. Woods's attorney-fee payments. Shortly thereafter, Mr. Paris filed a Motion to Compel (Doc. 209) disclosure of these materials to him over Mr. Woods's objection, and Mr. Woods filed a Motion to Dismiss due to Prosecutorial Misconduct (Doc. 211).

         Meanwhile, this case had also become embroiled in acrimonious disputes over whether the Government was fulfilling its discovery obligations. Many of those disputes are not worth recounting here, but certain disputes relating to Mr. Neal's secret recordings are relevant to the case's present posture. On November 2, 2016, the Government was given access to these recordings by Mr. Wilkinson's office, and in April 2017, the Government turned copies of them over to the Defendants. On October 12, 2017, the Government provided the Defendants with redacted copies of text messages between Mr. Wilkinson and Agent Cessario. The Defendants' review of those text messages convinced them that there must exist some additional secret recordings by Mr. Neal that had not yet been turned over to them. In particular, the Defendants found specific references in those text messages to recordings of conversations that were not contained in any of the recordings they already possessed.

         After the Defendants brought these discrepancies to the Government's attention, a Government lawyer relayed these concerns to Mr. Wilkinson, which set in motion a chain of events that eventually led to the discovery that Mr. Wilkinson's office indeed possessed additional recordings that had never come into the possession of any lawyers for any of the parties in this case, including the Government. This revelation occurred in November 2017, only a couple of weeks before trial, after Mr. Paris and Mr. Shelton had filed Motions to Dismiss of their own (Docs. 168 and 170, respectively), but before the Court had an opportunity to rule on those motions. The Defendants asked the Court to take the events surrounding the discovery of these additional recordings into account when ruling on their pending Motions to Dismiss, and eventually the Court and all parties agreed that it would be necessary to continue the trial date to April 9, 2018, in order to allow time for evidentiary hearings to be held on these matters. Now, roughly three months and several more dramatic developments later, the Court is satisfied that we have finally gotten, if not to the very bottom of these issues, then as close to their bottom as we can ever reasonably expect to get. Accordingly, the Court is now prepared to rule on all of the aforementioned motions: Mr. Paris's Motion to Compel, and all three previously mentioned Motions to Dismiss filed by each of the Defendants. The Court is also prepared to rule on a related, supplementary Motion to Dismiss (Doc. 293) that was filed on February 20, 2018 by Mr. Woods.

         II. DISCUSSION

         In the first subsection below, the Court will simultaneously consider Mr. Paris's Motion to Compel (Doc. 209) and Mr. Woods's first Motion to Dismiss (Doc. 211), as these two motions implicate overlapping issues. Then in the second subsection, the Court will deal with Mr. Woods's second Motion to Dismiss (Doc. 293), along with the Motions to Dismiss filed by Mr. Paris (Doc. 168) and Mr. Shelton (Doc. 170).

         A. Mr. Paris's Motion to Compel and Mr. Woods's First Motion to Dismiss

         In Mr. Woods's first Motion to Dismiss, he argues that the Government violated his Sixth Amendment right to counsel[3] by obtaining the information from his former counsel, Mr. Taylor, that this Court subsequently reviewed ex parte and ordered the Government to disclose to Mr. Woods. As a reminder to the reader, these materials are: (1) a statement by Mr. Woods that Mr. Taylor emailed to the Government in February 2016, while Mr. Woods was still cooperating with the Government and still being represented by Mr. Taylor; (2) information about the source of Mr. Woods's attorney-fee payments that Mr. Taylor provided to the Government in April 2017, after he was no longer representing Mr. Woods; and (3) Mr. Taylor's handwritten notes about Mr. Woods that he first showed Mr. Elser in February 2016, while he was still representing Mr. Woods and while Mr. Woods was still cooperating with the Government, but that Mr. Taylor subsequently provided to Mr. Elser in October 2017, after he was no longer representing Mr. Woods and Mr. Woods was no longer cooperating with the Government. Mr. Woods asks the Court to remedy the alleged Sixth Amendment violation by either dismissing the indictment in this case, or by disqualifying the United States Attorney for the Western District of Arkansas from prosecuting it.

         "To establish a sixth amendment violation, a criminal defendant must show two things: first, that the government knowingly intruded into the attorney-client relationship; and second, that the intrusion demonstrably prejudiced the defendant, or created a substantial threat of prejudice." United States v. Singer, 785 F.2d 228, 234 (8th Cir. 1986) (internal citations omitted). However, "a sixth amendment violation alone . . . does not require dismissal of the indictment. The interests supporting the sixth amendment right, meant to assure fairness in the adversary criminal process, must be reconciled with society's competing interest in prosecuting criminal conduct." Id. (internal citation omitted). Accordingly, "the appropriate course when faced with a sixth amendment violation is to tailor a remedy to the injury suffered, to assure the defendant effective assistance of counsel in a subsequent proceeding." Id. Thus, the question of prejudice and the question of remedy are separate questions, though the type of remedy that is appropriate will by necessity depend on the type of prejudice that was suffered.

         Mr. Woods argues that a "per se Sixth Amendment violation, with presumed prejudice, occurs when the government purposefully intrudes into the defendant's 'attorney-client relationship and lacks a legitimate justification for doing so.'" See Doc. 211, ¶ 9 (quoting Shillingery v. Haworth, 70 F.3d 1132, 1142 (10th Cir. 1995)). He argues further that if he can establish a prima facie case of such purposeful intrusion without legitimate justification, then "the government has the burden to rebut the defendant's prima facie case." See Id. at ¶10 (citing Kastigar v. United States, 406 U.S. 441 (1972)). And he contends that in doing so, the Government must rebut his prima facie case by "clear and convincing evidence." See Id. at ¶12-13 (citing Addington v. Texas, 441 U.S. 418, 423 (1979)). The Court does not think that Mr. Woods is correct about any of this, at least so far as the Eighth Circuit and United States Supreme Court are concerned. For one thing, Kastigar simply does not say what Mr. Woods says it says, and Addington has nothing to do with the Sixth Amendment. For another, although this Court believes that Mr. Woods has accurately characterized Shillinger, that is a Tenth Circuit case; and Eighth Circuit precedent, which is binding on this Court, would seem to contradict it on this issue of presumed prejudice and per se Sixth Amendment violations. See, e.g., United States v. Kriens, 270 F.3d 597, 603 (8th Cir. 2001) ("The burden ... is on the defendant to show that the representation or the proceedings leading to his conviction were adversely affected by virtue of a Sixth Amendment violation in order to obtain a dismissal of the indictment." (emphasis added)).

         However, the picture in the Eighth Circuit is admittedly muddy. For example, Singer acknowledges in dicta that in the Eighth Circuit "[i]t is certainly true that where there is gross misconduct on the part of the government no prejudice need be shown." See 785 F.2d at 234 n.6 (emphasis added) (quoting United States v. Davis, 646 F.2d 1298, 1303 n.8 (8th Cir. 1981)). And Singer seems to indicate that whether "gross misconduct" occurred depends on whether the Government acted in "good faith." See id.

         Ultimately, though, it makes no difference whether Mr. Woods is correct about the legal standard here, because assuming for the sake of argument that he is, this Court nevertheless finds by clear and convincing evidence that: (1) the Government, and more specifically, Mr. Elser, acted in good faith when obtaining the aforementioned information from Mr. Taylor; and (2) Mr. Woods has suffered no prejudice and no substantial threat of prejudice from the Government's acquisition of this information from Mr. Taylor. The basis for these findings is as follows.

         On January 10, 2018, the Court held an in camera evidentiary hearing at which only Mr. Woods, his counsel, and the Government were present. At that hearing, Mr. Woods called his former attorney, Mr. Taylor, and lead counsel for the Government, Mr. Elser, to testify under oath.[4]

         Mr. Taylor testified that he began representing Mr. Woods around October 28, 2015, and that Mr. Woods signed an agreement to proffer information to the Government a couple of weeks later, on November 11.[5] See Doc. 284, p. 22. He testified that Mr. Woods proffered additional information to the Government the following month in December. See Id. at 23. Then, on February 10, 2016, Mr. Taylor met alone with Mr. Elser at the United States Attorney's office in Fayetteville, to discuss some additional matters that had come up at the end of a previous proffer by Mr. Woods. See Id. at 28-29. Mr. Taylor recalled having told Mr. Elser at some point that with respect to those additional matters, Mr. Woods had not done anything wrong; and he also recalled Mr. Elser asking him to get more information from Mr. Woods to support this contention. See Id. at 33-34. He could not remember whether that previous conversation with Mr. Elser occurred on January 29, 2016, but he conceded it might have. See Id. at 35-37. But at any rate, Mr. Taylor remembered the February 10 meeting as being the occasion on which he followed up with Mr. Elser in person about these matters after having discussed them with Mr. Woods. See Id. at 34.

         According to Mr. Taylor, his handwritten notes which are presently at issue generally reflected the contents of these discussions with Mr. Elser and Mr. Woods. Specifically, they contained a list of loans that Mr. Woods received dating back to 2012. See Id. at 12, 34-35. Mr. Taylor testified that some of the information or questions in the notes came from Mr. Elser, and some of the information in the notes came from Mr. Woods in response to the questions that Mr. Elser had posed to Mr. Taylor about these loans. See Id. at 16-17, 38-40, 44-45, 53-54, 56-58. Mr. Taylor recalled showing these notes to Mr. Elser during the February 10 meeting in an effort to persuade Mr. Elser not to indict Mr. Woods for this additional conduct-an effort Mr. Taylor considers to have been successful, given that Mr. Woods was never charged for the conduct described in the handwritten notes. See Id. at 34-35, 40-41. Mr. Taylor also testified that Mr. Woods had authorized him to share those notes with Mr. Elser at the February 10 meeting for the purpose of explaining to Mr. Elser why Mr. Woods should not be indicted for the conduct described therein, see Id. at 41, and that after the meeting with Mr. Elser he reported to Mr. Woods what had happened and that he believed it had gone well, see Id. at 43. Mr. Taylor also recalled asking Mr. Elser during the February 10 meeting whether Mr. Elser wanted to keep a copy of the notes, and Mr. Elser responding, "No. If I need them, I'll get those from you later, " though Mr. Taylor expressed uncertainty about the accuracy of his memory on this point. See Id. at 42-43.

         Finally, Mr. Taylor testified that he was contacted by Mr. Elser at some point after his representation of Mr. Woods had ended; he could not remember the date, but he conceded that it could have been in September or October of 2017. See Id. at 9. During this communication, Mr. Elser asked Mr. Taylor if he would provide him a copy of these notes, and Mr. Taylor agreed to do so. See Id. at 10-12. Mr. Taylor testified that he turned over a copy of the notes to Mr. Elser at that time, because he felt he had already been authorized to do so by Mr. Woods, and because there was no harm in giving it to the Government since he believed the notes had helped to persuade them that Mr. Woods had done nothing wrong with respect to their contents. See Id. at 43-44, 51.

         Like Mr. Taylor, Mr. Elser testified that Mr. Taylor first reached out to him on behalf of Mr. Woods in October 2015, see Doc. 285, pp. 5-6, that Mr. Woods signed a proffer agreement on November 11, 2015, see Id. at 6-7, and that Mr. Woods then proffered information to the Government once that same month and once more in the following month of December, see Id. at 7. Mr. Elser also testified that Mr. Taylor informed him in March 2016 that Mr. Woods had terminated Mr. Taylor's representation of him and would likely no longer cooperate with the Government. See Id. at 15-16, 50.

         Mr. Elser recalled Mr. Taylor showing him the handwritten notes before then, at their February 10, 2016 meeting, and he recalled Mr. Taylor offering to let him copy them at that time, but he could not recall whether he had actually made a copy. See Id. at 9. Mr. Elser also recalled asking Mr. Taylor in October 2017 for a copy of the notes. See Id. at 8-9. Mr. Elser testified that "the whole point" of the February 10 meeting was to discuss "what an additional proffer would look like and what Mr. Woods would say in that proffer." See Id. at 11. He also testified that when he asked in October 2017 for a copy of the notes, he recalled that they generally reflected the contents of the February 10 discussion, and that Mr. Taylor had conveyed to him on February 10 that the subject activities did not involve any criminal wrongdoing; but beyond those generalities, Mr. Elser testified that he had not been able to recall very much at all about the notes' specific contents when he asked Mr. Taylor for a copy of them in October 2017, see Id. at 11-14. Mr. Elser further testified that the reason he reached out to Mr. Taylor to obtain a copy of the notes was because he wanted to review them and provide them to the Court in anticipation of the possibility that Mr. Taylor might "have to testify regarding the entire course of conduct in dealing with Mr. Woods and the proffer, " given that a Motion to Suppress was then pending that implied that Mr. Taylor had conspired with the Government to procure false confessions from Mr. Woods. See Id. at 8, 14-17.

         Importantly, Mr. Elser testified that from his review of the notes, he believes they contain a combination, on the one hand, of information and questions that were given by him to Mr. Taylor during a meeting on January 29, 2016, and on the other hand, responsive information that was subsequently given to Mr. Taylor by Mr. Woods, prior to the February 10 follow-up meeting. See Id. at 22-24, 29-31, 36-38. According to Mr. Elser, the notes describe a list of loans that, prior to the February 10 meeting, Mr. Elser believed Mr. Woods had taken out and not repaid, and that Mr. Elser had believed might have been bribes. See Id. at 24-25. But after Mr. Taylor showed him the notes and explained that Mr. Woods would proffer that the loans described therein had been fully paid off and were not a quid pro quo, Mr. Elser did some more searching and obtained additional bank records indicating that the loans had indeed been fully repaid. See Id. at 25. Mr. ...


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