The flashily dressed young man walks into a defense lawyer’s office, seeking representation in a drug-smuggling case. The tastefully dressed lawyer notes that this sort of thing can get expensive. The young man smiles, opens his satchel, and dumps $20,000on the desk Cash.
Assume for the moment the lawyer can take the money. Should he-unlike, say, a doctor or a car dealer-also be entitled to refuse to tell the government whom it came from? Should he be permitted to ignore the federal tax forms that most businesses are required to file every time they receive more than $ 10,000 in cash?
The Internal Revenue Service and the Justice Department have started bringing court actions to force lawyers to name clients on these forms. Respected criminal-defense attorneys-like Gerald Lefcourt of New York-say that enforcement of the reporting requirements conscripts lawyers as "informants against their clients" in derogation of their ethical duties and, in many cases, of the attorney-client privilege and the Sixth Amendment right to counsel. Hundreds of lawyers have filed the forms with blanks in place of the payer’s name.
These lawyers warn that the new cash-reporting push-together with the government’s efforts under forfeiture laws to seize drug and racketeering money paid out as attorney fees-threatens to poison the attorney-client relationship and destroy the criminal-defense bar.
The best will be driven out, warns Lefcourt. They will go to big firms where they can labor to make the world safe for "companies that put cancer-causing agents in pajamas, and everybody will think they are great."
Lefcourt and his colleagues have a point. A prime reason for a vigorous defense bar is to deter the government from bringing criminal charges in the absence of strong evidence. The system works pretty well in that regard: The vast majority of defendants are proved guilty of something because few innocents are charged.
But defense attorneys are also prisoners of their own success. Any lawyer who tried to specialize in innocent criminal defendants would not make much of a living.
Dirty, but Necessary, Business
Many defense attorneys-at least those who represent accused drug dealers and other low-status defendants without major sources of legal income-know that their fees are paid mainly with the proceeds of crime. It’s a dirty business, perhaps, but someone has to do it. These are the lawyers on the Bill of Rights firing Sine. And the job they do won’t be done well unless it pays well.
So it’s not overstating the case to claim that the existence of the criminal-defense bar as we know it-and the health of the Sixth Amendment-depend on allowing lawyers to take and keep money they suspect is tainted. Indeed, we should even indulge a presumption that a fee is untainted unless the lawyer is confronted with something like proof to the contrary beyond a reasonable doubt.
The Supreme Court, however, doesn’t see it this way. In two 5-4 decisions last June, it upheld against Sixth Amendment challenges the federal government’s broad new regime of fee forfeitures. The Court required no proof that the lawyers whose fees would be seized had any more reason than is typically the case to know that the money was tainted.
The high court’s decisions were unfortunate. Lefcourt and other defense attorneys seem right in warning that unless the Justice Department exercises great restraint in using its fee-forfeiture powers, it will drive the good lawyers out of criminal-defense work. We’ll be pushed toward a chillingly statist system in which almost all defenders will be low-salaried employees of the same government that does the prosecuting.
But defense lawyers are wrong to see the cash-reporting requirements in a similarly sinister light. To be sure, they may be obliged by state rules of legal ethics to refuse to name their clients on cash-reporting forms unless and until ordered to do so by the courts. The real question is whether the courts should order them.
And on that question, the defense attorneys’ claim for an exemption rests on the proposition that the Sixth Amendment gives lawyers a special privilege not only to take money with an obvious criminal taint but also (by evading reporting) to help their clients conceal where the money came from.
Why should the law permit that? Why-given the vast amount of illegal activity facilitated by large sums of cash-should not the law prohibit everyone, including attorneys, from accepting payments of more than $10,000 in cash?
Most people who insist on paying more than $10,000 in greenbacks do so to conceal illegal activity-whether it be drug sales or tax evasion or hiding joint assets from a spouse. Defense lawyers counter that many other people have all sorts of lawful reasons for wanting to pay lawyers in cash, such as suspicion of banks or not wanting the relatives or friends who loaned them the money to know why they need it. But it is difficult to see how reporting large cash payments to the JRS would defeat such idiosyncratic concerns.
It’s also hard to see why honest lawyers, given their druthers, would not prefer being paid with certified checks to being presented with bags full of money. What do you do with $20,000 in cash? Stuff it into a briefcase, head for the bank, and hope you don’t get mugged en route? Stick it in a drawer overnight, if it’s too late to go to the bank? Call a Brinks truck? Why go through the hassle?
Defense attorneys say you go through the hassle because sometimes that’s the way the client wants it. If you won’t, the client will find someone else-perhaps a lawyer who won’t report the cash to the IRS at all.
If you force the honest lawyers to identify clients who pay in cash, says Lefcourt. "[what you’ll end up with-at the rate you’re kicking the good people out of this profession-you’ll have seedy people who will pocket the cash, suborn perjury, do whatever they have to-and what have you accomplished?…You haven’t done squat for the crime or drug problem." And, he adds, you have set up the lawyer as a witness against the client in a future tax-evasion prosecution.
This seems overheated. If the cash-reporting requirement is enforced in earnest and upheld by the courts, those who do not want to become witnesses against their clients can simply make clear that they do not accept large sums in cash.
That would give the client a choice: He could write the lawyer a check, depositing the money to cover it if necessary. A deposit of more than $10,000 would require the bank to file a cash-receipt form naming the client. He could seek to evade that by making a series of small deposits before writing the check. The lawyer should not encourage or assist such illegal conduct, but might not be in a position to detect or prevent it., Or the client could look for another attorney, one willing to pocket the cash without notifying the IRS at all.
Clients who are determined to hide tainted money from the IRS while using it to hire lawyers might still be able to do so. But they could not do it as easily as they can now.
And at least the honest lawyers would not be assisting in the concealment. The dishonest might not help either, because they could do so only by risking prosecution, which might outweigh the benefit.
It is true, as Lefcourt says, that forcing lawyers to tell prospective clients that they cannot accept cash fees of more than $10,000 without reporting them to the IRS may put some strain on the nascent attorney-client relationship. To vindicate important social values, we must impose some obligations on lawyers that cause discord with clients-such as the rules against introducing false evidence or perjured testimony. Smooth attorney-client relations cannot always be the highest value.