A Question Of Money

By Alain L. Sanders

The Panama Defense Forces could not save his regime in the face of a U.S. military assault. Now his high-powered legal defense team claims it may not be able to defend his case in the face of U.S. legal action. In a surprise move last week, General Manuel Noriega's lawyers asked to be excused from representing him against drug-trafficking charges in Miami. Reason: uncertain fees. Because of a sweeping U.S. Government freeze on the general's assets, estimated at $20 million to $60 million, his lawyers maintained they could not be paid. Said defense attorney Steven Kollin: "I've been able to do very little because I need to travel and obtain a full-time staff of investigators. We've got warehouses of documents in Panama, but no one has been able to go down there and look at them." The prosecution promptly labeled the pleas of poverty "inaccurate and misleading." To try to break the impasse, U.S. District Judge William Hoeveler ordered the Government to detail exactly what it had seized.

The imbroglio resurrected concerns among Noriega's supporters about his ability to get a fair trial in the U.S. But more important, it renewed some basic questions about the nation's sweeping forfeiture laws. Those statutes provide a mechanism for prosecutors in federal drug and racketeering cases to freeze any of a defendant's assets that they suspect to be fruits of the crime -- even before obtaining a conviction. The targeted assets may include funds that could be used to pay an attorney. As a result, says University of Florida law professor Fletcher Baldwin, "federal prosecutors now have control not only over the defendant but also over the defendant's attorneys."

It is the kind of control, say many experts, that has hit the defense bar in the solar plexus and left many in the profession reeling. In the past year the threat of forfeiture actions by the Government has forced many defense lawyers to diversify their practice and has even caused a few to bail out of big drug litigation. More important, it has plunged many attorneys into a sea of paper work to justify the source of their pay, pressuring some to avoid representing certain suspects and others to plea-bargain away their clients' cases.

The crisis erupted last June when the U.S. Supreme Court upheld the Comprehensive Forfeiture Act of 1984. That law permits prosecutors to block a defendant's allegedly ill-got funds -- including money that could be used to pay attorneys' fees -- pending trial. In the event of a conviction, the assets are confiscated for good. The statute, which applies to drug and racketeering offenses, seeks to stop mobsters and drug kingpins from financing their defense with the fruits of their misdeeds. Another purpose, law-enforcement officials maintain, is to bar them from transferring large chunks of their assets to their lawyers for safekeeping.

But as the Noriega flap illustrates, the law also has the potential of blocking the funds that suspects need to hire the attorneys of their choice. The measure, complains Neal Sonnett, president of the National Association of Criminal Defense Lawyers, "gives prosecutors the power to disqualify a Clarence Darrow while allowing a more pliable lawyer to remain in the case."

Federal prosecutors insist they are merely using the law to seize dirty money from attorneys who ought to know better. But critics believe they see darker tactics at work. The feds "usually won't invoke forfeiture if you make a plea bargain," observes Miami lawyer Joel Hirschhorn. "But the minute you plead not guilty, they threaten you with going after the fee." Noriega's lawyers argue that the freezing of his assets may be part of just such a plea- bargaining ploy. They say it is preposterous for prosecutors to claim that Noriega's money came only from drugs.

The federal forfeiture laws have already changed the way many drug and racketeer defense lawyers do business. "If someone comes to hire me in a federal narcotics case, my first goal is to find out if the pay is legitimate," says Orlando attorney Cheney Mason. The forfeiture laws have also placed some practitioners on the defensive, quite literally. Since last year, Houston attorney Mike DeGeurin has been fighting the Justice Department over a subpoena to testify before a grand jury about the source of fees. The subpoena was served on him even before his client was indicted. The IRS is pressing criminal lawyers to reveal the identity of clients paying more than $10,000 in cash. To the dismay of the defense bar, earlier this year a federal judge in New York backed the IRS in this demand.

Placing defense attorneys in an adversarial relationship with their clients over the origin of funds raises serious concerns. Warns Tulsa lawyer Allen Smallwood: "If I'm subject to spilling my guts about my client's secrets every time the U.S. Attorney taps me on the shoulder, it drives a wedge between me and my client." It drives a wedge, say many legal experts, that cracks a big hole in both the Sixth Amendment right to counsel and the attorney-client privilege of confidentiality.

Prosecutors maintain that public defenders are available to replace private attorneys who dump clients with allegedly tainted funds. But critics note that public defenders, paid by taxpayers, are already swamped by the cases of the indigent. Moreover, says Noriega lawyer Kollin: "The Government picks the top of their crop to prosecute a defendant like Noriega. He deserves the same in his defense attorneys."

With reporting by Jerome Cramer/Washington and Richard Woodbury/Houston