On August 28, 2019, the Project on Government Oversight (POGO) ran a story by Adam Zagorin and Nick Schwellenbach titled Overruled: Top Justice Department Appointees Quash Felony Charge Against Monsanto.

Zagorin and Schwellenbach reported that earlier this year, Justice Department prosecutors were on the verge of charging biotech giant Monsanto with a felony for illegally spraying a banned, highly toxic pesticide and nerve agent in Hawaii, not far from beachside resorts on Maui.

“But then, according to an internal April 2019 government document viewed by the Project on Government Oversight (POGO), that decision was overruled.”

Alice Fisher

Latham & Watkins

Washington, D.C.

Monsanto had its Washington lawyers intervene at the highest levels of Department of Justice to stop the felony case.

A key attorney handling the matter for Monsanto was Latham & Watkins partner Alice S. Fisher

“The felony case against Monsanto was halted after the company’s lawyers launched a last-minute appeal to the office of then-Deputy Attorney General Rod Rosenstein,” they wrote. “Rosenstein’s office, after consulting the Justice Department’s top political appointee on environmental law, then ‘directed’ federal prosecutors ‘to resolve the Monsanto criminal case with misdemeanors only’ before July 2019.”

How did you come across the Monsanto case?

“We were privy to an internal government document and we quote briefly from it within our story,” Schwellenbach told Corporate Crime Reporter in an interview last week. “The document was distributed fairly widely within the Justice Department. We learned from the document that the Office of the Attorney General overruled prosecutors in the U.S. Attorney’s Office in the Central District of California in this matter. They were directed not to seek a felony charge and to only seek at most misdemeanor charges.”

“The case is about Monsanto illegally spraying a chemical called methyl parathion in Hawaii. This chemical had been phased out. In 2010, the EPA reached a decision, in concurrence with the manufacturers, that the chemical should be banned for all uses with no exceptions and that that ban would go into effect December 31, 2013.”

“After that date, all uses of that chemical were completely illegal. People in the industry were put on notice years before the deadline that this was coming down the pike. In the summer of 2014, Monsanto sprays this chemical. How do we know this?”

“In the summer of 2014, some anti-Monsanto activists were driving around. Monsanto would post these signs with these handwritten spray logs. An activist took a picture of one of these signs. They wrote on this spray log – we sprayed methyl parathion on this date on this field at this time. We have a picture of that spray log. It was posted on Facebook.”

“In one of these postings by anti-Monsanto activists, they recount a conversation they had with a regional career EPA supervisor in 2017 who said – they had an ongoing case against them.”

“Fast forward to this year, our sources show us this document. Apparently, this law violation was treated as a criminal matter. It was referred by EPA’s criminal investigators to the Department of Justice at the U.S. Attorney’s office. And they were pursuing a felony violation.”

“Earlier this year, an attorney representing Monsanto reached out to the Office of the Attorney General in DC. Monsanto was unhappy with the negotiations with the U.S. Attorney in California. And they strongly protested the decision by the U.S. Attorney’s office to seek a felony charge.”

“The Deputy Attorney General’s office, under Rod Rosenstein at the time, reached out to the top political appointee running the Environmental and Natural Resources Division. That appointee viewed it as an overcriminalization of the matter. He believed it to be at most a misdemeanor. And his view carried the day.”

Is it unusual for corporations to appeal decisions by a U.S. Attorney’s office to Main Justice?

“We did a follow up story. I talked to one of the lead litigators on the Enron Task Force Sam Buell. He’s now a professor at Duke Law School. I spoke with some others, like Paul Pelletier, who used to be the Deputy Chief of the Fraud Section at the Department. And they said — it’s not unusual for companies or deep pocketed defendants to have their counsel reach out to Main Justice when they are not happy with a determination by a line prosecutor or a U.S. Attorney’s office. And they will go up the chain if they can.”

“Any defense counsel zealously representing their clients will do such a thing. The difference here is – who is likely to get your call returned? And even if you get your call returned, how often does that lead to overruling the line prosecutor?”

“We came across a video posted on YouTube from a 2017 Federalist Society event. At this Federalist Society event, the former Deputy Attorney General, George Terwilliger, who was Bill Barr’s deputy under the first Bush, he said essentially – we are more likely to return the calls of some defense counsel than others. If you are a former high level Department official, you are more likely to have your phone calls returned. It’s totally natural. It happens in other contexts.”

“But it does underscore this question of equity of access to these pre-charge appeals. You shouldn’t have to be a former high level Department official to have your calls returned if you have a legitimate appeal of a charging decision. There is no written guidance on how these appeals should be handled, no written guidance saying under what circumstances Main Justice should entertain those appeals. That feeds into this perception that the rich and powerful and corporations do get more bites of the apple. And they do get more bites of the apple than some drug defendant who doesn’t have a former Department official representing them.”

“It’s rare for Main Justice to have a totally political decision where it overrules a prosecutor. There has to be some reasonable basis for doing so. But there is no requirement that their reasoning has to be documented and recorded. Who can test it?”

Have there been other similar cases?

“Another case that received some press coverage, particularly by the New York Times, is the Purdue Pharma case and the attempt by career prosecutors in the Western District of Virginia to pursue felony charges against three Purdue Pharma executives. This all happened in the 2006 time frame. They worked for years on this case. They produced a prosecution memo that was over 100 pages long. Barry Maier at the New York Times got a hold of it and wrote a story on it.”

“This prosecution memo recommended that these executives face felony charges. Purdue was not happy with that attempt by those prosecutors to go after their executives. They did appeal to Main Justice. It went all the way up to the Deputy Attorney General’s office. It ended up that those executives plead guilty to misdemeanor charges. It was a case where it appeared as if access overruled the facts.”

“The lead prosecutor in that case wouldn’t speak directly to the facts of the case because he is still with the Department of Justice. But he confirmed that for a well financed defendant, they will appeal up the chain. This case fits the pattern that we saw with Monsanto. Purdue had a defense team with Mary Jo White, Howard Shapiro, the former general counsel at the FBI and Rudy Giuliani. They had some heavy hitters and big names behind them.”

Could the U.S. Attorney still bring felony charges?

“What we read was that Main Justice directed the U.S. Attorney not to seek felony charges and to seek at most misdemeanor charges.”

We don’t know whether the directive was adhered to?

“We understand that that directive was heard within the U.S. Attorney’s office.”

Has a case been filed yet against Monsanto?

“No. Nothing has been filed yet in court. It is in negotiations between the U.S. Attorney’s office and Monsanto. One possible outcome would be a deferred prosecution agreement.”

Was the U.S. Attorney going to file a deferred prosecution agreement before the appeal to Main Justice?

“We had read that they were on the verge of filing a felony charge in April.”

And not deferring it?

“Correct.”

[For the complete q/a format Interview with Nick Schwellenbach, see 33 Corporate Crime Reporter 43(13), Monday November 11, 2019, print edition only.]

