The Sarbanes-Oxley Riot?

Did President Biden’s Justice Department overreach by using an anti-business corruption law to prosecute hundreds of January 6 rioters? It looks as if the Supreme Court could well have to settle this question, which has divided federal judges in the lower courts. Just recently, a panel of riders of the District of Columbia circuit split two to one in backing the DOJ on this head, yet left what the Times calls “wiggle room” for the defense in these cases.Some 308 January 6 defendants were charged under Sarbanes-Oxley with “corruptly obstructing, influencing, or impeding an official proceeding, or attempting to do so,” the Justice Department says. That is nearly a third of the 1,020 defendants arrested in the Capitol breach. Yet questions have arisen as to whether the obstruction charge is applicable under the circumstances of January 6, as our A.R. Hoffman has reported.This is because the crime entered the federal statute books via the Sarbanes-Oxley Act of 2002, a law designed to improve auditing standards and impose stricter financial regulations on American corporations. It was “passed amid the implosions of Enron and WorldCom,” Mr. Hoffman writes, and “specifically responded to the behavior of Enron’s auditor, Arthur Andersen, who destroyed potentially incriminating documents.”The offense is found in Section 1102 of the voluminous Sarbanes-Oxley legislation under the heading of “Tampering with a record or otherwise impeding an official proceeding.” It sets a penalty of up to 20 years in prison for anyone who “corruptly,” in the law’s language, “alters, destroys, mutilates, or conceals a record, document,” or “otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so.”Congress defined “official proceedings,” Mr. Hoffman notes, “as those before federal judges, Congress, federal government agencies, and regulators of insurance businesses.” No wonder the Times says the “obstruction charge” was “never a perfect fit for the many cases stemming from the Capitol attack.” Bloomberg’s Noah Feldman reckons there are questions about whether the law “should apply beyond the context of altering documents.” One district court judge, Amit Mehta, questioned DOJ lawyers as to why some rioters were being charged with misdemeanors while others faced the felony obstruction charge. “Essentially, what you said is, ‘Trust us,’” Judge Mehta said, noting “that is a real problem when it comes to criminal statutes.” He wondered if it was an “appropriate” use of “prosecutorial discretion.” Yet in a ruling in December he decided the prosecutors were within their rights.Another federal district judge at the Columbia District, Carl Nichols, ruled that prosecutors couldn’t use the obstruction charge in the context of January 6 because of the way the law was written. The law “requires that the defendant have taken some action with respect to a document, record, or other object,” Judge Nichols wrote, “in order to corruptly obstruct, impede or influence an official proceeding.”The 2-1 ruling by the circuit riders leaves “the status quo” in place, the Times says, avoiding “crippling hundreds” of cases “by invalidating the obstruction count.” Yet “a serious challenge” remains — the need for DOJ to prove any obstruction was done “corruptly,” the Times reports. The riders differed on how to apply that concept in the January 6 context. This opens the door to further litigation — and possible intervention by the Nine.We carry no brief for the January 6 rioters, though we have noted the importance of protecting the Constitutional rights of these defendants — especially, as we recently noted in the case of the so-called “QAnon Shaman,” the right of due process. The breach of the Capitol on that day jolted the foundations of the republic. Yet it offers no justification for traversing the Constitution by way of overambitious interpretation of criminal laws by prosecutors.It is, in the Sun’s view, an abuse to use Sarbanes-Oxley in pursuing those who rioted on January 6. That was never for what the law was meant. It’s similar to the abuses we have seen of the Racketeer Influenced and Corrupt Organizations Act against those with no connection with the kind of organized crime the statute was intended to fight. The January 6 cases are another reminder of the danger Robert Jackson warned of runaway prosecutors.

The Sarbanes-Oxley Riot?

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