Prosecutors Cannot “Outsource” Prosecutions

My good friends and esteemed colleagues over at Law Offices of Sara Kropf, Sara Kropf and Dan Portnov, recently wrote a blog post asking the white-collar defense community whether they have encountered federal government contractors rather than government employees, prosecutors and federal agents conducting government investigations.

Read the full post: Government Contractors Conducting Investigations: A New Normal?

As explained in the blog, Sara and Dan were alarmed, while representing a client during an investigation, because federal government contractors and not government prosecutors or federal agents were “making key contacts and decisions throughout the investigation’s course”, “negotiating the scope, timing and cooperation”; and, acting as the “lead investigator” or as the “government contact in lieu of an Assistant United States Attorney or [federal] agent”.

Apparently, Sara and Dan noticed that their conversations with the federal government contractors about the investigation were awkward and stilted; and, Sara and Dan felt uncomfortable with the federal government contractor’s actions during the investigation.

Thus, their plea to others in the white-collar community.

In response to Sara’s and Dan’s request for insight on their experience, given procurement regulations, federal government contractors cannot take leading roles in a government investigation as Sara and Dan described.

Specifically, the Federal Acquisition Regulations prohibit contractors from performing “inherently governmental functions.”

Regulations list examples of “inherently government functions” including:

  • The direct conduct of criminal investigations
  • The control of prosecutions [and performance of adjudicatory functions other than those relating to arbitration or other methods of alternative dispute resolution.]
  • The direction and control of Federal employees.

Regulations also list functions that are not considered inherently governmental, for example:

  • Providing legal advice and interpretations of regulations and statutes to Government officials.
  • Providing special non-law enforcement, security activities that do not directly involve criminal investigations, such as prisoner detention or transport and non-military national security details.

Taking these examples together, it is clear that prosecuting crimes is an “inherently governmental function” – no other entity, beyond a government can do that. So, it seems to me that Sara and Dan were dealing with a federal government contractor and a federal agency that is not complying with procurement regulations.

The remedy is not easy to pursue since it is a procurement regulation and not a rule of criminal procedure. So, since defense lawyers are not party to federal government contract, they have no right to challenge how a federal government contract is being performed, even if it means defense lawyers must deal with federal government contractors taking led roles in the investigation.

One approach would be for defense counsel to talk with the AUSA, the inspector general attorney, or whoever the government attorney is who is assigned to the investigation, to advise the government attorney that it seems the federal government contractor is performing “inherently governmental functions” in violation of procurement regulations.

If the government attorney who is supposed to lead the investigation does not know about this (They very well may not since investigating and prosecuting attorneys are not involved in the procurement process.) tell the government attorney to talk to agency procurement lawyers. If that does not resolve the situation, depending on the nature of the investigation, consider raising concerns through agency Office of Inspector General or procurement lawyers themselves.

When federal government contractors run amuck, it may be a situation where a clueless federal government attorney or federal agent is not controlling the contractors. It may be remedied by the agency’s procurement function reviewing the scope of work to refine what the federal government contractors are permitted to do. Or the procurement function may simply need to remind investigating government lawyers and agents of the scope of work that may not even permit the contractors to engage in the work they have been doing.

With that said – contractors certainly can, and, have for decades, performed audit functions, analytics, and prepared reports, recommendations etc. for all sorts of government investigations. Further, they may provide staff augmentation for government investigations such as paralegal services, auditors, or some non-criminal investigative services, for example.

So, when encountering this type of situation, white collar counsel needs to understand what the federal government contractors are allowed to do; and, what they cannot do. Once that is clear, defense counsel should take action, if necessary to protect their client’s interest, to make sure that government investigations are in fact led by government prosecutors and government agents.

The intersection of law, business, criminal activity crime and ethics: why do some companies violate the law? what happens when they do? what is ethical? how do we get corporations to follow the law? can lawyers help and, if so, what is the lawyer’s role? Stay tuned, we’re going to address all of these issues and more in When the Writ Hits the Fan.
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