signed to deal with. But when you're talking about an arm's-length transaction, as Judge Kane in the district of Colorado and Judge Laval in the Southern District of New York have both pointed out, in an erudite manner, you're not talking about that which the legislation was designed to prohibit or to proscribe. Apart from the sixth amendment considerations, I don't believe that the forfeiture statutes and the relation-back theory in the forfeiture statutes were ever designed to be applied in this kind of a situation.

A hypothetical that I used, not only in court but in some other debates on this, is one that involves this same individual having been arrested and being in jail, unable to make bond, having a heart seizure, and being rushed to the hospital in handcuffs, where it is determined that he needs open-heart surgery. Under the standard of reckless disregard, is the doctor on notice "He's in handcuffs." "What did the fellow do?" "He's charged with drug offenses."-does the doctor have to refuse the surgery, or at least the fee for the surgery, because he now has been put on some kind of notice and can no longer be considered a bona fide purchaser for value under the Comprehensive Crime Control Act amendments, or must he refuse the operation altogether to avoid prosecution under the substantive provisions of the bill?

I doubt seriously that anybody on this committee or in the Department of Justice would say that that man's life should be endangered because the Government believes, even though it hasn't been proved yet beyond a reasonable doubt, that he has no legitimate source of income.

Well, prosecution for serious crimes is no less substantial than heart surgery since the outcome can and often does affect people for the rest of their lives. The RICO offenses, which are forfeitable offenses, carry maximum terms of 20 years, and as this committee is well aware, the continuing criminal enterprise statute carries a life sentence without possibility of parole. And that means a life sentence; under Bureau of Prisons guidelines, there is not even application of gain-time provisions on a life sentence.

The constitutional crisis is no less severe than the health crisis. The doctor shouldn't be held to some higher standard because he is performing a service rather than selling a product. You know, that is a difference, because in a situation in which a product is sold, simply seize the product from the convicted defendant. They don't seize both the Mercedes Benz and go to the auto dealer to seize the $50,000 that it may have cost.

We are in a difficult position, because we're not selling a product, we're providing a service. And we're in an even more difficult position than other service providers because we're under the constraints of the canons of ethics and, the attorney-client privilege. And I suggest to you that if you focus on the purpose for the forfeiture provision and the purpose for the relation-back theory, which was to avoid against sham transfers, that that's not an unfair or inappropriate standard to draw; so that you allow a person, if he has money, even though it may be illegally derived, to hire counsel of his choice regardless of what fee he pays.

The fees, I think, are overblown in the minds of some people in the Department of Justice. Most criminal lawyers make much less than lawyers in other fields of practice.

Mr. HUGHES. I never realized lawyers made that much money until I came here.

Mr. SONNETT. Well, I didn't either, and I am a criminal defense lawyer. But I suggest to you that the constitutional considerations override that. And unless the Department of Justice or the Congress is willing to say that they're after criminal defense lawyers as well, then the forfeiture provisions ought to be focused on what their original intention was.

Mr. HUGHES. Thank you. You've been extremely helpful, and much of what you advance I subscribe to.

The gentleman from Florida.

Mr. MCCOLLUM. I just want to have one clarification question on the forfeiture issue, and then I have a couple of others that are unrelated to that altogether.

Let's take the example that the chairman gave you with regard to Joe Trafficker, and take it to the point where the bank account exists with $25,000 in it and Joe Trafficker has gone to his attorney, knowing that the law is after him, and given the attorney a retainer check, not the cash, and, in the interim, between the time that the check is processed, the Government attaches, under forfeiture provisions, the money in the account.

Have we established a situation where you don't have a problem with it? Is that that fine, gray line or

Mr. SONNETT. No. As a matter of fact, maybe I wasn't making myself clear in answering the chairman's question, but I have a problem with it regardless of when the funds are seized.

One of the cases that was considered by this subcommittee during its hearing several years ago on the forfeiture provisions was a case in which I was counsel, in the Southern District of Florida, in which that precise issue was raised. The defendants were indicted, a restraining order was issued against all of their property, and they had absolutely nothing left with which to hire counsel. And I petitioned the court for an order releasing property sufficient enough to allow the defendant to retain me as his counsel. Mr. MCCOLLUM. I don't have any arguments with the basic thesis that you established earlier, that I think I heard through all of that, that is one-half, at least, of your argument, that once you get the money in the hands of the attorney, I think there's some real problems, I think there really are, in the relation-back. And you've raised a lot of questions in my mind that weren't quite so seriously raised before. But I don't agree, at this point-and I don't want to debate it, because I want to get some other questions with you, but I'm not convinced on the point of if the Government can get its hands on the money before the attorney actually gets involved, or would be a witness, or has the money in hand, even though I realize there is a right-to-counsel question there.

Mr. SONNETT. Well, let me just make one other observation. I don't want to debate it either, but I think it's necessary for me to at least emphasize again that when you are dealing with pretrial, preconviction seizures of assets, you are allowing the Government to seize assets on less than the standard of proof that is required for ultimate forfeiture of those assets. If seized assets cannot be used for payment of legal fees, it simply turns the presumption of innocence on its head. If you take away all of the money that a

man has when he's indicted, and you deprive him of the ability to get a lawyer, then you deprive him of the ability to properly defend himself and you may be creating a self-fulfilling prophecy, where, because of that inability to defend himself, he is convicted.

Mr. MCCOLLUM. But, as you know, I had that little problem running through my mind when the first witness was testifying, because there are so many who are criminals who don't have the ability to pay their counsel, who do commit very serious crimes that I know we have to provide counsel for, and I have a very hard time giving the extra, added advantage to the person who is able to provide for the lawyer only because of his presumed situation with regard to the fruits of his crime, even though I realize the legal question there.

I'm going to think about it. I'm not closeminded, I'm just telling you, you've convinced me of one thing but I haven't bought the other.

Let me move on to something. May I-

Mr. SONNETT. May I—and I don't want to belabor it, but in that respect may I simply suggest to you that-I heard your question and your comment on that issue to Mr. Bailor-I think we need to be realistic about this in two ways. No. 1, the fact is that the system of appointed counsel in this country simply doesn't work as well as it should. There are people who are not receiving fair trials and are not receiving effective assistance of counsel. Those are people who are provided a lawyer under either State or Federal public defender type systems.

I'm simply suggesting that we not expand the number of persons who are at risk, and I'm also suggesting that the cases in which forfeiture is authorized are the most complex kinds of crimes. And no public defender system in this country, no counsel appointed under the Criminal Justice Act, can prepare this kind of case at the rates paid under the CJA, nor can a public defender's office, overburdened as it already is, properly devote the amount of time necessary for effective defense of these complex cases.

Mr. MCCOLLUM. Well, you made a very interesting point, because there is no question we have problems with public defender cases and there's no question but what these are complicated. And maybe there is a public policy question we ought to be deciding beyond the constitutional question of whether or not we should allow these moneys to go in that direction.

But because it is late, I do want to ask these two quick questions unrelated to forfeiture.

The issue involving the "transaction" definition in the statutes intrigues me. In the very first bill I introduced, which is very similar in nature to the definition of a transaction in the chairman's bill, the Organized Crime Commission language was used, and that language restricted the transactions to those passing through financial institutions. Disregarding for a moment the other differences between that bill and the chairman's or any other's with regard to other factors, do you have a problem with transactions if they are restricted to those passing strictly through financial institutions?

Mr. SONNETT. I don't. I think that's the proper place to focus. That really is what the bulk of money launderers use, financial in

stitutions, and I think the chairman's bill, which restricts money laundering to transactions in or through financial institutions is the proper framework.

Mr. McCOLLUM. Then I want to ask you a clarification question, because you did criticize "reason to know" as well as "reckless disregard" in your testimony. The Attorney General-although I wasn't present for it I read his testimony and I understand from Mr. Lungren's question-got into quite a discussion about that. And I gather it was his impression, if I'm not misinterpreting what I've read and heard, that "reason to know," in fact, was a pretty good idea, usable, and, as Mr. Lungren apparently extrapolated on, something the jury might understand better.

It is my understanding, from listening to my colleagues in the bar discuss various standards and debate the issue, that there is another state of mind besides "reason to know," known as "willful blindness." My understanding, of course, is that we also have this idea of "reckless disregard of substantial risk" the administration has put forward.

Do you see any difference between the standard of "reason to know" and "willful blindness"? And how do you compare those with the idea of "reckless disregard"?

Mr. SONNETT. Well, let me point out to you first that in my view, "willful blindness" is not a separate standard of intent. It is a jury instruction in case law well established that allows the jury to establish the essential element of knowledge if the jury finds that he was willfully blind to the circumstances going on around him. That's why I suggest in my written testimony that we don't need either the reason to know or the reckless disregard. Both of them are dangerous and not necessary.

Mr. MCCOLLUM. Where does "reason to know" really become a lesser standard than "willful blindness"?

Mr. SONNETT. Well, my thesis is, first, that the time-honored traditions of criminal law and statutory construction require, for the conviction of a serious criminal offense, that the offense or the act be done knowingly. And I don't think we ought to allow a conviction on less than that standard. So, I'm not suggesting to you that we insert a standard that's called "willful blindness," and that somehow that's better than "right to know" or "reason to believe" or "willful"-I forgot--

Mr. MCCOLLUM. "Reckless disregard." Right.

Mr. SONNETT. "Reckless disregard."

What I am suggesting to you is that under the current statutes that require knowledge, one of the ways that you prove knowledge is to show willful blindness; that is, that you stuck your head in the sand, is basically what "willful blindness is all about.

That has worked well, and it has allowed the Government to successfully prosecute individuals of knowingly committing an act, when they may not have direct evidence of that act but when one of the circumstances that is considered by the jury is that of "willful blindness." I see no reason to change that. I don't see any reason, frankly, to place that "willful blindness," or the language which is now a jury instruction, not a separate statutory standard of intent, as a standard of intent, because then it lowers it. Because then the jury is told that they can convict on less than knowledge.

I think we ought to leave it where it is, which is, knowledge is required. There's nothing wrong with that. That allows people who are innocent to avoid being charged and convicted of crime.

Mr. MCCOLLUM. But isn't that confusing to the jury?

I know one of the problems we have, whenever we debate jury instructions-is that-you can play with the jury instructions tremendously in your own examples as an attorney.

Isn't it better to get it in as simple a language as possible, straightforward? And in some cases like this it seems to me that it isn't that clear to the jury.

Mr. SONNETT. That jury instruction is, in fact, a simple, straightforward jury instruction, and I could cite to you off the top of my head at least half-a-dozen cases in which I wish it had been less easy for a jury to understand.

Mr. MCCOLLUM. OK. Well, I don't want to belabor this. We've had you here a long time—it's been a long hearing-and I appreciate it. You are, indeed, presenting us a scholarly presentation and we appreciate it.

Mr. SONNETT. Thank you.

Mr. HUGHES. Thank you very much. You have been very helpful. Mr. SONNETT. Thank you.

Mr. HUGHES. Our final witness today is Richard J. Arcara, the district attorney for Erie County, NY. Mr. Arcara was elected to office in 1981. For 6 years before beginning to run for office, he was a U.S. attorney for the western district of New York, serving under three Presidents of the United States. From 1969 through 1975, he served as an assistant U.S. attorney in the District. He is a 1965 graduate of Villanova University School of Law.

Mr. Arcara is a member of the Executive Working Group on Federal, State and Local Prosecutions of the U.S. Department of Justice. He also serves as a vice president of the New York State District Attorneys Association. He is vice president of the National District Attorneys Association, he is a member of his executive committee and is testifying on behalf of the association.

Mr. Arcara, let me, first of all, apologize for the delay. It's been a marathon session today and we do appreciate your being with us today.

Likewise, I had your statement last evening. It's not a very long statement, and it will be made a part of the record in full and you may proceed as you see fit.

STATEMENT OF RICHARD J. ARCARA, DISTRICT ATTORNEY, ERIE COUNTY, BUFFALO, NY; ON BEHALF OF THE NATIONAL DISTRICT ATTORNEYS ASSOCIATION

Mr. ARCARA. Thank you, Mr. Chairman. I found waiting here today to be very informative, myself.

Mr. Chairman and members of the House Crime Subcommittee, I speak to you today on behalf of the National District Attorneys Association. Our association represents 6,300 local prosecutors from around the country. We thank you for this opportunity to address our concerns regarding the various concerns regarding the various money-laundering bills which you consider today. My remarks will be brief and will be confined to those proposed legislative changes