Sept. 22, 2014 SIGN IN | REGISTER

Davidson: OCE Draws Inferences Against Third Parties

I contacted OCE counsel for a response. They told me that the OCE never draws a negative inference specifically against a member under investigation because of a third party witness’s failure to cooperate with an investigation. Rather, OCE counsel said, the OCE draws a negative inference against the witness that fails to cooperate. Thus, said OCE counsel, when the OCE requests certain information from a third party, and the third party refuses to provide the information, the OCE will sometimes assume that the requested information would be adverse to the party refusing to provide it. This assumption, OCE counsel said, is the type of common-sense inference that fact investigators make all the time. Moreover, they said, it is merely one “data point” that the OCE considers among all of the other facts that it gathers during an investigation.

For example, in the Owens matter, the OCE requested information from the Chinese Culture University to determine the role the university played in organizing, conducting and paying for Rep. Owens’ trip to Taiwan. When the university refused to provide all of the requested information, the OCE drew a negative inference. The report stated: “The OCE infers that the information the University refused to provide, taken together with the factual findings in this referral, supports the conclusion that there is substantial reason to believe that the alleged violation occurred.”

However, some attorneys who have represented third-party witnesses before the OCE complain that anything short of perfect compliance with an OCE request can result in an adverse inference against the witness. This may be because, unlike other government agencies conducting investigations, the OCE lacks subpoena power, which means it cannot use the court system to force witnesses to cooperate, under penalty of law. In the absence of this power, attorneys say that the threat of an adverse inference has become the OCE’s “club” to try to compel cooperation. Attorneys have said that the OCE sometimes uses this “club” even where witnesses made what the attorneys believed was an earnest effort to cooperate with the investigation.

Whether or not this is the case, one thing is clear: The OCE believes that the negative inferences are permissible and has no plans to stop making them anytime soon.

C. Simon Davidson is a partner with the law firm McGuireWoods. Submit questions to cdavidson@mcguirewoods.com. Questions do not create an attorney-client relationship. Readers should not treat his column as legal advice.

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