What to Think about that '60 Minutes' Money Laundering Episode
Should Lawyers Be Law Enforcers rather than Legal Advisors?
A “60 Minutes” segment called “Anonymous, Inc.” addressed the problem of money laundering, where criminals convert their ill-gotten gains to seemingly legitimate funds, sometimes by transferring them to financial institutions and then making some big purchases, like of high-end real estate in New York City. Rather than focusing on the bad actors — drug cartels, terrorist organizations, organized crime — who are trying to cleanse their dirty money, “60 Minutes” correspondent Steve Kroft focused on lawyers.
Some attorneys, after all, concentrate their practices on international law, project finance, and wealth management.
In its characteristic exposé style, the “60 Minutes” segment relayed how Global Witness, a nonprofit, sent an actor claiming to be a representative of a government official from an African country to meetings with prospective lawyers, which he secretly recorded. Snippets of these meetings were included in the broadcast.
The actor, calling himself Ralph Kayser, met with 16 lawyers in 13 firms seemingly on the grounds that he was seeking representation for this foreign government official who wants to buy real estate and make other significant purchases in the United States. This official, the man allegedly named Kayser explained, did not want his name on any of these transactions because he had made his money by helping foreign investors secure mineral rights in his country.
“Kayser” asserted that the money was legally obtained.
The lawyers acted like lawyers do when they are presented with a prospective high-wealth client. They talked about ways the client’s needs might be met. They sought a bit of detail about what the client had, mused about how he might proceed, and mentioned what they might do for the client.
It was, after all, an initial meeting with a prospective client.
One of those appearing thanks to the hidden camera was a former American Bar Association president. Another was a lawyer who made a bit of a joke about how lawyers don’t go to jail because they’re the ones who write the laws, and they tend to do so in a way favorable to them. Only one lawyer turned the gig down overtly while mentioning the Foreign Corrupt Practices Act, where it was noted that bribing foreign officials is illegal for Americans.
Not long after the episode aired, media, both legal and mainstream, reported on it. The American Bar Association issued a statement. Social media came alive with some negative assessments about the legal profession.
Can we all stop pretending that any client visits a lawyer to get guidance based on that lawyer’s personal moral code? We visit lawyers because we are in situations where we want to win, whether that’s coming out ahead in a divorce, setting up a business structure to protect our personal assets and to limit our tax liability, beating crime charges, or protecting our interests in a real estate deal.
My takeaway from the “60 Minutes” presentation is that as a society we need to contemplate the true role of a lawyer.
Some seem to be looking to lawyers to serve as sheriffs of sorts, as law enforcers rather than as advisors looking to help clients accomplish, within the bounds of the law, what those clients’ goals happen to be. Do we want to deputize attorneys? Do you want people in your day-to-day world reporting you to the authorities after surreptitiously recording you? Should that only happen for certain transgressions, like money laundering? Should it happen for aggressive deducting on tax returns? Where should such a line be drawn?
Indeed, the “60 Minutes” segment highlighted not only the serious problem of money laundering but, perhaps, one it may not have intended to. Watching the program and feeling for the lawyers who were appearing thanks to the hidden camera antics of “Ralph Kayser,” the plant sent by Global Witness, I cannot help but wonder about the risk to any individual talking to someone she thinks is a business prospect but who is really a poseur in a state where two-party consent to the recording of a conversation is not required.
The prospect that someone you might be talking business with could be surreptitiously recording you and plan to air damning chunks of your chat on a mainstream television program to me is the frightening part of the entire episode. We all want to be able to speak with candor, especially in the comfort of our offices, with prospective clients. Clients should be able to speak with candor so they can get the best possible legal advice. While attorney-client privilege protects the client against disclosure of confidential communications, attorneys themselves need to be able to candid with their clients without fear of having their communications secretly recorded and broadcast.
In assessing the “60 Minutes” episode and anticipating what its aftermath would be for the legal profession, I could not help but marvel at how word choice played into my response to the program. The report’s talk of shell companies being set up to help facilitate the transfer of funds sounds inherently bad, but would the reaction have been the same if these business organizations were described, instead, as holding companies or limited liability organizations?
So, yes, money laundering is bad, crime is bad, and some lawyers, especially expensive ones, are hired to help clients operate in gray areas of the law, those where great legal minds might differ on the bounds of its area.