IMPOSED 26%

1987 - JUNE 1989

C-iii

Mr. HUGHES. Mr. Blakey, welcome.

STATEMENT OF G. ROBERT BLAKEY, PROFESSOR, NOTRE DAME LAW SCHOOL

Mr. BLAKEY. Thank you, Mr. Chairman. I appreciate the opportunity you've given me to testify. I come back to this committee as one who has worked for it last year and in the grand sense of things, against it when I worked on the other side of the Hill many years ago. So, in a way, I am returning home.

I have several documents here, one an oral presentation, and I would ask that you incorporate it in the record as if were read. I'm sure you've read it.

Mr. HUGHES. Without objection.

[The information appears in the appendixes.]

Mr. BLAKEY. I've also appended to that oral presentation three documents, one an analysis of the arguments for and against RICO, and I would ask that that be incorporated in the record.

Mr. HUGHES. Without objection, so ordered.

[The information appears in the appendixes.]

Mr. BLAKEY. Next, a study of the allegations of abuse in RICO cases, and I would ask that that be incorporated in the record. Mr. HUGHES. Without objection.

[The information appears in the appendixes.]

Mr. BLAKEY. And finally, a detail section-by-section analysis of pending legislation with suggested possible amendments and two alternative bills that you might consider, and I would ask that that be included in the record.

[The information appears in the appendixes.]

Mr. BLAKEY. In addition, I've heard the testimony here today by my good friend, former Congressman Harold Sawyer. I worked for him on the Assassinations Committee, and so when I say "good friend," I really mean it.

As it turns out, I was the attorney who prepared an amicus brief in the appeal that he referred to. As in many situations, when lawyers view facts, whether or not this was an abusive case is in the eye of the beholder.

One definition of an abusive case is any case brought against my client. Any case I bring is a good one.

I don't want to comment on what Mr. Sawyer said, but I would think that maybe it would be useful for your record if it incorporated the amicus brief in it I will send it to you. I think that might cast for your readers the comments of Mr. Sawyer in a more balanced light.

In addition, as it turns out, I am filing an amicus brief in the LILCO matter, too, representing the Trial Lawyers for Public Justice. I would ask that that also appear in the record. It includes a full consideration of Judge Weinstein's opinion. I will also send you a copy of it.

Again, I would comment on my good friend Mr. Rakoff-again, we are friends-I have worked for him from time to time. What happened in LILCO-good or bad-is a lawyer's view. Another view is out there, and your record ought to include it.

With that, Mr. Chairman, let me only make one or two points to you and then open myself up, and indeed the panel, for questions. I mean, God knows, I've given you 700 pages to read, with suggested alternative amendments. There's no way I can summarize that in 5 minutes.

The basic comment is this: There is really not an argument about whether we need RICO reform. Even I can see that RICO needs to be reformed. That's off the table. As such, most of the general argument that you heard in your hearing-in this testimony and in the written material-is really irrelevant.

The only question is how should we reform it?

One of the most distressing things for me, as a former staffer around here, is the paucity of aid I have seen in this record on how to do it, the technical stuff.

I mean, if you say we ought to do this or that, what kind of language do you propose? Everybody is talking; nobody is drafting.

The thing that troubles me the most, though, is the fundamental non sequitur between most of the allegations of abuse-which, incidentally, I don't think can be supported—and the remedy proposed to correct those alleged abuses.

I'm for RICO reform, but it doesn't follow that I'm for Mr. Boucher's bill, although I would say some variation of that bill I recommended to Mr. Conyers last year, when I worked for him. There were only, I think, three things that were outstanding. We did not reach an agreement on the exclusion of the securities and the commodities industries and retroactivity. We had really gotten that down to where fair-minded people were not happy with it, but they could have signed on. Mr. Conyers and Mr. Rodino, in their wisdom, suggested that those three questions were matters not of principle "ple," but principal "pal." Therefore, they simply would not have any part of it.

In addition, I have done what I think every witness ought to do— offer you language for three issues that have not been previously discussed.

I've tried my hand at codifying the Supreme Court's decision in H.J., Inc., the Department of Justice's guidelines, and the best of the learning in the existing pattern case, as well as-this is the thing I draw to your attention, particularly you, Mr. Hughes.

When RICO went through back in 1970, it was a sister statute to the Comprehensive Drug Control Act, and those of us who were involved in drafting them both had no idea which one was going to go through, if either. Therefore, a two-track system was followed. First, we drafted CCE, the Continuing Criminal Enterprise provision, for drug dealers, and then we drafted RICO, for everybody else. You might say that RICO is CCE for everybody else or that CCE is RICO for drug dealers.

There's real parallelism between the two. In retrospect, some of the language we used in writing the Continuing Criminal Enterprise provision may be better than what we used in working out the concept of pattern. Therefore, I have drawn on the CCE jurisprudence and suggest it to you.

The other two issues I raise with you are the result of the Caplin, Drysdale, and Monsanto cases. The Supreme Court has now

told us that there is no constitutional right to use money to pay legal fees that could be forfeited.

As a constitutional question, I accept what the Court says. I do not necessarily agree that that's what I would have done had I been on the Court, but I wasn't, so I accept its decision.

But that does not settle the legislative issue. The policy question remains. I find unanswerable Justice Blackman's deep concern about the viability of the criminal defense bar. I have drafted for you, therefore, language that would set up a mechanism to provide for necessities, and that would include lawyer's fees. It would also include doctor's fees, mortgage payments-anything that a person has that he has no other source to pay for-subject to judicial supervision.

I think it's a good compromise. I certainly submit it to you for your consideration and would be glad to answer any questions about it.

The last one-I think I have to preface this suggestion by a disclosure. I am on a petition for certiorari in the McMonagle_case, the third circuit case, now pending before the Supreme Court. Third circuit recently sustained the application of civil RICO to an abortion demonstration.

At a much earlier stage, I thought that case walked the line between first amendment and extortion, and it was not an inappropriate use of the statute. But the lawyers involved in it got in contact with me, and they made me more aware of the record than I was previously. I have now filed a petition for certiorari. So that's full disclosure.

If I'm involved in litigation, I shouldn't be in here arguing in another forum something I hope to win in a judicial forum.

We've got a problem. It's not a RICO-specific problem. Among the claims for relief in McMonagle were antitrust and interference with contract. That case would have been in the Federal courts under diversity jurisdiction anyway.

We are going to see, in the period of post-Webster, demonstrations by people who oppose abortion and people who support abortion.

We're going to see demonstrations in the area of nuclear facilities, animal rights. We're going to see litigation brought by people who would like to suppress those demonstrations.

I think that we have a duty to see to it that litigation not be used as an instrument to suppress first amendment rights.

I have no problem with the Supreme Court's rules in the first amendment litigation. They're very clear, and I wouldn't change them if I could.

The Clayburn decision, NAACP v. Clayburn Hardware, sets out the rules for this kind of litigation. It draws a distinction between first amendment conduct and violence. I think that's appropriate. The difficulty is we need a mechanism to police that distinction in the course of discovery and litigation.

It is not a RICO-specific question. It's antitrust, it's diversity, it's all Federal theories of relief.

I recommend to you some of the language that I've tried in here as an effort to do that, to diffuse this kind of very, very sensitive issue, which every figure in American political life is going to face

now that the Supreme Court has ceded some of the jurisdiction in this area back to legislatures.

My last comment is simple. It's a little philosophical.

The history of the 20th century in law has largely been one of adapting the law of the 19th century. We worked out a pretty good system in the 19th century in contracts, in torts, and criminal law, but it didn't always work well in dealing with large aggregates of power-the corporations, the unions, the Government itself.

Most of the legislation, the great legislation-the securities acts, the antitrust acts-were modifications of 19th century common law theories.

Basically, they were designed to read into the law a vision of justice and to give power to people when they faced large aggregates of power-of money and of wealth.

RICO was written in that tradition. I'm not saying that I wrote it myself. I worked for John McClellan, Roman Hruska, and Richard Poff.

I may have drafted it, but they were the architects.

It was to adjust a balance between people and power.

I would implore you now, as you go back to reconsider that balance and you should-take care less in readjusting that balance that you only take care of the powerful, who really don't need your help, and forget those people in our society, who can only look to you, as legislators, or to the law, to protect themselves, when they come up against those who socially, politically, economically, have more power than they do.

If the law can't give to little people a reason to have allegiance to it, the law is going to loose that element of legitimacy that is so necessary in our kind of society.

We don't have consensus on religion anymore. We don't have consensus on morals anymore. Really, all we have to hold us together as a society is law. And that only works where we get the consent of the governed.

You must surely know the extent to which large segments of the American people no longer have confidence in our Government, no longer participate in voting, and have about what you people do an enormous sense of cynicism.

I don't think a campaign contribution would ever produce your vote on an issue, Mr. Hughes. I know you. And I think the same thing about Mr. Boucher, Mr. Mazzoli, and the other members of this committee any more than a fee would produce my testimony in this hearing. But there are an awful lot of people who think this legislation is being bought and paid for-particularly on the retroactivity point-particularly on its effect on the savings and loans scandal and the exclusion of the securities industry, and the special deal that is being given those individuals.

Let's make sure that when we draft it, we make it utterly clear that we are, in fact, making an effort to balance the public interest, and work something out, rather than picking and choosing among who were the last squeaky wheels we heard from. Thank

you.

Mr. HUGHES. Well, thank you for a very thoughtful statement, Mr. Blakey.

[The prepared statement of Mr. Blakey follows:]