Summary
denying a request to unseal a grand jury transcript that contained "information relating to ongoing grand jury proceedings, testimony about alleged criminal acts by individuals named in that transcript but not publicly identified, and descriptions of specific actions and transactions that are the subject of the ongoing investigation."
Summary of this case from United States v. KennedyOpinion
CR 01-115-BR.
August 21, 2002
MICHAEL W. MOSMAN, United States Attorney, LANCE A. CALDWELL, Assistant United States Attorney, Portland, OR, Attorneys for Plaintiff.
STEVEN B. UNGAR, Portland, OR, Attorney for Defendant Barclay Grayson.
CHARLES F. HINKLE, Stoel Rives, LLP, Portland, OR, Attorneys for Oregonian Publishing Company.
OPINION AND ORDER
For the reasons that follow, the Court DENIES the Motion for Release of Transcript (#41) of The Oregonian with leave to renew.
THE LAW
In The Oregonian Publishing Company v. United States District Court for the District of Oregon, the Ninth Circuit set forth a two-part test to determine whether an order closing a criminal proceeding satisfies the procedural requirements of the First Amendment to the United States Constitution. 920 F.2d 1462 (9th Cir. 1990). The court held (1) those excluded from the proceeding must be afforded a reasonable opportunity to state their objections, and (2) the Court must make specific findings articulating its reasons for closure. Id. at 1466. In addition, the court reiterated the three substantive requirements a court must meet in order to close criminal proceedings without violating the First Amendment: (1) closure must serve a compelling interest, (2) there must be a substantial probability that the compelling interest would be harmed in the absence of closure, and (3) there must be no alternative to closure that would adequately protect the compelling interest. Id. (citing Press-Enterprise Co. v. Superior Court, 478 U.S. 1, 13-14 (1986)).
FINDINGS OF FACT
The Court finds the following facts by a preponderance of the evidence:
On March 19, 2001, Defendant Barclay Grayson pleaded guilty to a single count Information charging him with Mail Fraud in violation of 18 U.S.C. § 1341 pursuant to a Plea Agreement he entered into with the government. The Agreement included Grayson's promise to cooperate with the government and to testify in the government's ongoing grand jury investigation of criminal activity connected with the failure of Capital Consultants, Inc., a Portland investment firm. That failure caused losses to Union pension plans and others exceeding $300 million. As part of the Plea Agreement, Grayson agreed to testify against his father, Jeffrey Grayson, and others. In return, the government promised Grayson it would recommend a reduced sentence. Based in significant part on Grayson's cooperation in the investigation, the grand jury returned its 22-Count Indictment against Jeffrey Grayson on October 2, 2001, charging him with mail fraud, money laundering, and witness tampering.
In this Opinion and Order, "Grayson" refers to Defendant Barclay Grayson. The Court refers to Grayson's father, the named Defendant in CR 01-377-BR, by his full name, "Jeffrey Grayson."
On November 21, 2001, after a lengthy sentencing hearing in open court during which the government and Grayson both sought a probationary sentence based on Grayson's substantial assistance, the Court imposed a 24-month prison term. To accommodate the government's need to have continued access to Grayson for the ongoing grand jury proceedings and for potential trial testimony against Jeffrey Grayson and others and to permit Grayson to attend the birth of his third child, the Court set Grayson's surrender date for May 1, 2002.
In April 2002, Jeffrey Grayson agreed to plead guilty and to cooperate with the government in its continuing investigation. For its part, the government promised Jeffrey Grayson it would seek a further reduction in Grayson's sentence because Grayson, after his sentencing, persuaded Jeffrey Grayson to resolve his case. As a consequence of Grayson's additional cooperation, the government avoided the significant costs and potential risks of an extended trial against Jeffrey Grayson.
In the government's two-count Superseding Information containing the agreed new charges against Jeffrey Grayson, the government also identified by name an individual allegedly involved in the broader Capital Consultants criminal episode. That individual, however, had not been named in any indictment up to that time, and he filed a motion to strike all references to him from this new charging instrument. On April 23, 2002, at the beginning of the hearing on Jeffrey Grayson's change of plea, the Court heard argument and granted the motion of this uncharged individual striking all references to his name from the public record. The Court then accepted Jeffrey Grayson's guilty pleas to one count of Mail Fraud in violation of 18 U.S.C. § 1341 and one count of Assisting in the Preparation of a False Tax Return in violation of 26 U.S.C. § 7206.
On April 24, 2002, consistent with its promise to Jeffrey Grayson, the government moved pursuant to Fed.R.Crim.P. 35(b) for an additional sentence reduction for Barclay Grayson based on his post-sentencing assistance that led to Jeffrey Grayson's conviction. The Court deferred Grayson's surrender date and set argument on the Motion for May 30, 2002.
Before that proceeding, however, Jeffrey Grayson, who already was in very poor health and confined to a wheelchair, suffered a stroke and became incapacitated. He remains so, and it appears unlikely he will be capable of providing any testimonial assistance to the government in its ongoing grand jury investigation and anticipated prosecutions. Grayson's prominence and responsibility as a crucial cooperating witness, therefore, has increased significantly.
In connection with the government's Rule 35 Motion on Grayson's behalf, the Court was asked to consider whether Grayson or his family had or would suffer any injury, danger, or risk of injury as a result of his assistance to the government pursuant to Fed.R.Crim.P. 34(b) and United States Sentencing Guidelines § 5K1.1(4). Immediately before the hearing, Grayson's counsel and the prosecutor met with the Court in chambers and jointly requested Grayson have an opportunity to make a full record in camera about risks he and his family were facing as a result of his publicly heightened duty to cooperate. Grayson's counsel identified to the Court an uncharged individual who may have pressured, coerced, and threatened Grayson in light of his importance as a government witness. Both counsel urged the Court to consider this information before exercising its discretion to decide the Rule 35 Motion. Counsel also agreed public disclosure of the identity of this individual and others might well increase the short-term risks faced by Grayson and his family and likely would jeopardize the criminal investigation. In addition, the Court already was aware from the previous sentencing proceeding that Grayson was in a fragile emotional state.
Counsel emphasized Grayson was genuinely fearful and might not be able to make his record fully if he was required to do so publicly.
The Court instructed counsel they would be required to make and to support any request to close the proceedings in open court. The Court then commenced the public hearing on the government's Motion.
The parties called witnesses. Counsel argued the matter and responded to questions from the bench. As the proceeding neared its conclusion, the time came for Grayson personally to address the Court. As noted, Grayson wanted to testify in camera. Grayson's counsel initially proposed to present in camera all of Grayson's personal allocution concerning the proper resolution of the Motion and his evidence concerning any danger and risks arising from his ongoing cooperation. Still in open session, the Court questioned whether it was necessary to seal all of Grayson's presentation. As he had in chambers before the hearing, Grayson's counsel responded that public disclosure of the identity of unindicted individual(s) against whom Grayson was testifying and from whom he feared retaliation could increase the risks he faced because of his cooperation. The government concurred with Grayson's request.
Although it did not articulate its reasoning on the record at the time, the Court concluded it should permit Grayson to make a sworn presentation initially in a closed courtroom limited to testimony about risks he and his family faced as a result of his cooperation. In reaching this decision, the Court was aware of the following facts:
• The Grand Jury was (and still is) investigating criminal activity entwined in the collapse of Capital Consultants, Inc. That investigation has been lengthy due to extraordinarily complicated financial evidence and the large number of individuals involved.
• Public speculation has been widespread concerning the unnamed targets of the government's investigation and against whom the next indictments might be returned.
• The Court already had litigated with one uncharged individual his objection to being publicly identified by the government in the criminal proceedings against Jeffrey Grayson.
• Grayson was emotionally vulnerable and exhibited genuine fear. Grayson had a right to present his testimony under circumstances that did not increase any risk he already was facing as a consequence of his increased role as a cooperating witness.
• Without knowing the precise content of the anticipated testimony, the Court could not determine in advance whether it was appropriate to compel its presentation in open court.
Although the Court did not invite public commentary before it decided to close the court briefly for limited testimony, no one present advanced any objection at that time or at the point when the courtroom was re-opened and the proceedings continued in the presence of all who cared to observe. In particular, The Oregonian's reporter, who apparently was present before and after the closed proceeding, did not voice a concern. If anyone had expressed an objection, the Court still would have taken the testimony in camera in order to screen it preliminarily. In that event, however, the Court would have aired any objections in open court and engaged in the analysis set forth in this Opinion and Order.
As the courtroom was cleared, a citizen observer, Jim Lots, addressed the court. He identified himself as a union member adversely affected by the demise of Capital Consultants and stated "this whole thing stinks." In a colloquy with the Court, Mr. Lot complained union members had inadequate information about "some basic figures" involved in the pension programs. The Court understood Mr. Lot and other union members were very distressed over the financial losses sustained by their pension funds, and they might disapprove of any further reduction in Grayson's prison sentence. Mr. Lot, however, did not indicate he objected to the Court taking limited testimony from Grayson in camera. Indeed, the Court invited Mr. Lot to confer with the prosecutor during a recess. When the public proceedings resumed, Mr. Lot's viewpoint was recited for the Court before it ruled on the government's Motion.
The Court closed the courtroom for Grayson's brief testimony limited to evidence of criminal activity still to be investigated by the grand jury and the risks and dangers to Grayson and his family as the result of his cooperation in disclosing this evidence. The Court has filed in the public record the transcript of the proceedings conducted in open court. Although the Court has redacted from the public record the 19 pages of Grayson's in camera testimony, the Court has filed that redacted excerpt separately and under seal. This closed session lasted approximately 15 minutes and was followed by a recess when the court reporter was summoned to cover another proceeding.
Thereafter, the Court resumed proceedings in open court. At the conclusion of the hearing, the Court granted the government's Motion in part and reduced Grayson's 24-month sentence to an 18-month prison term. Grayson currently is serving that sentence at FCI Sheridan and continues to cooperate in the government's ongoing grand jury investigation.
On June 12, 2002, The Oregonian made a letter request for release of the transcript of that portion of the May 30, 2002, proceedings that occurred while the courtroom was sealed. The Court notified the parties and requested briefing. After the parties submitted their memoranda, The Oregonian also filed a Reply.
DISCUSSION
1. All procedural requirements have been met.
A. Those excluded from the proceedings have had an opportunity to state their objections.
As noted, the Court required Grayson to seek the closure in open court and to explain in general terms the necessity for an in camera proffer. When the Court announced it intended to take limited testimony from Grayson out of public view and began to clear the courtroom, there was an immediate opportunity for anyone present to object. Although a reporter from The Oregonian apparently was in attendance, he did not object even after a citizen addressed the Court on another issue as the courtroom was cleared.
In any event, the existence of a transcript of those proceedings and The Oregonian's post-hearing request for the transcript's release have created the current opportunity for presentation of The Oregonian's objections and arguments.
B. The Court has articulated specific findings.
The Court articulates in this Opinion and Order its findings and analysis under the applicable standards.
2. All substantive requirements have been met to keep this record sealed during the pendency of the grand jury investigation.
a. Closure serves a compelling interest.
As long as the grand jury investigation continues, there is a compelling interest in preserving the secrecy surrounding the identity of witnesses and the targets of the grand jury inquiries. The government also has a compelling interest in protecting the integrity and confidentiality of its ongoing criminal investigation and in assuring its primary cooperating witness, Grayson, is neither intimidated nor harmed because of his assistance while grand jury proceedings continue.
b. There is a substantial probability of harm.
The sealed transcript contains information relating to ongoing grand jury proceedings, testimony about alleged criminal acts by individuals named in that transcript but not publicly identified, and descriptions of specific actions and transactions that are the subject of the ongoing investigation. The sealed transcript also contains specific, credible information about intimidation of Grayson as a result of his cooperation and the consequential potential for physical harm to him. If the transcript is made public while the grand jury investigation is still in progress, there is a substantial probability that grand jury secrets will be revealed and the continuing criminal investigation will be compromised. In addition, if the transcript is unsealed while the grand jury investigation continues, there is a substantial probability that Grayson, an individual particularly susceptible to intimidation, will be frightened into silence and that his real fears of harm from the unidentified individual(s) will, in effect, diminish his ability to cooperate. For purposes of this analysis, the Court is persuaded this is true even while Grayson is in federal custody based on Grayson's convincing in camera testimony about the nature and real potential for harm from the individual(s) named during the closed proceedings.
c. There are no reasonable alternatives to maintaining the transcript under seal during the pendency of the grand jury investigation.
The Court limited its closure to a narrowly drawn subject area and to a very brief period of time in the course of a lengthy and otherwise fully public proceeding. The Court has considered and rejects as ineffective The Oregonian's proposed alternative that the Court release a redacted transcript. Any disclosure of the sealed transcript, even in redacted form, during the pendency of the grand jury proceedings creates an unreasonable risk the secrecy of those proceedings or the integrity of the criminal investigation will be compromised.
CONCLUSION
After the grand jury proceedings are concluded and those who will be indicted have been publicly accused, circumstances may warrant release of the sealed transcript under the substantive standards set forth in The Oregonian Publishing Company v. United States District Court for the District of Oregon. As such, The Oregonian has leave to renew its request in the future. In the interim, however, and for the reasons stated herein, the Court DENIES The Oregonian's Motion for Release of Transcript (#41).
IT IS SO ORDERED.