February 2007 — BALCO Defendants Pled Guilty to Leaking Grand Jury Documents to San Francisco Chronicle Reporters

In 2004, San Francisco Chronicle reporters Lance Williams and Mark Fainaru-Wada published articles allegedly based in part on federal grand jury transcripts, concerning charges that Bay Area Laboratory Co-Operative (BALCO) founder Victor Conte Jr. and others provided illegal steroids to professional athletes. The stories added fuel to a public debate that included congressional investigations on steroid use in professional sports. In July 2005, key defendants in In re Grand Jury Subpoenas (Mark Fainaru-Wada and Lance Williams) (the BALCO case) pled guilty to counts of steroid distribution and money laundering, and were sentenced, but the U.S. Department of Justice convened a separate grand jury to investigate the source of the alleged transcript leaks. Materials related to the case were provided to the parties under a protective order, and were provided to Congress and others in the related congressional investigation, but a federal court rule prohibits certain disclosures by certain parties to a grand jury proceeding.

In December 2004, the presiding judge in the BALCO case referred the question of the leaks to the Justice Department. In April 2006, the government issued subpoenas requiring Williams and Fainaru-Wada to appear and to produce the source of the information purportedly from the grand jury transcripts. Attorney General Alberto Gonzales was quoted in the media that it was “appropriate” to threaten to jail reporters to force them to reveal their sources. The reporters moved to quash on May 31, 2006. In June 2006, media amici , including NAA, filed a brief supporting the motions to quash the subpoenas and highlighting the role that confidential sources have played in bringing vital issues to the public's attention. An oral hearing took place on August 4, 2006.

On August 15, 2006, the U.S. District Court for the Northern District of California issued an order denying the motion to quash. The court acknowledged that confidential sources have often been “essential in assisting the press” in the task of “bringing issues to the forefront of public attention, which may lead to changes in policy or the law.” However, the court subordinated that consideration against the role of the grand jury “and its concomitant rules of secrecy.”

The court rejected assertion of a First Amendment qualified reporter's privilege in the federal grand jury context, citing In re Grand Jury Proceedings (Scarce) , 5 F.3d 397 (9 th Cir. 1993); Cohen v. Cowles Media Co. , 501 U.S. 663 (1991); and In re Grand Jury Subpoena, Judith Miller, 438 F.3d 1141 (D.C. Cir. 2006). An exception suggested in Justice Powell's concurrence in Branzburg v. Hayes , 408 U.S. 665 (1972), as interpreted by the Ninth Circuit in Scarce , was inapplicable without demonstration of abuse of the grand jury process. Rather, the information sought here was “central to the determination of whether the leaker(s) may or may not have committed perjury, may or may not have sought to obstruct justice, may or may not have violated Federal Rule of Criminal Procedure 6(e), and may or may not have violated the provisions of the Protective Order.”

The court declined to apply factors identified in Jaffee v. Redmond , 518 U.S. 1 (1996) to support a common law reporter's privilege, noting that some states have recognized a reporter's privilege but federal courts have been reluctant to follow their lead in the grand jury context: “unless and until the Supreme Court states that a common law reporter's privilege exists, or unless Congress enacts such a privilege, Branzburg 's mandate is binding.”

Even if a reporter's privilege were recognized under federal common law, it “would be overcome on the facts of this case.” Based on its reading of Branzburg, the court was hesitant to rely on the type of balancing test advocated by Judge Tatel in the Miller case; but applying the test in Shoen v. Shoen , 48 F.3d 412 (9 th Cir. 1995), the court said the Government had exhausted all reasonable alternatives to discover the source of the leak absent reporters' test imony and document production; the test imony would not be cumulative; and the test imony and documents were relevant and central to an important issue in the investigation.

Finally the court dismissed the reporters' argument that compliance with the subpoena would be “oppressive” within the meaning of Federal Rule of Criminal Procedure 17 because it would destroy a confidential relationship and in that reporters' professional standing and livelihood depend on “ability to live up to their promises to whistleblowers.” The reporters had not met their burden in this regard because they did not contend that any particular source relationship would be destroyed and a court must look to the facts of each particular case.

On February 14, 2007, criminal defense lawyer Troy Ellerman, who had represented BALCO founder Victor Conte Jr. and BALCO vice president James Valente, pled guilty to leaking to the San Francisco Chronicle reporters, Williams and Fainaru-Wada, secret grand jury documents from the steroids investigation, including transcripts of the test imony of professional baseball players Barry Bonds, Jason Giambi, Tim Montgomery and Gary Sheffield. He admitted blaming the federal government for the leak in a motion to dismiss charges against Conte and Valente. As a result of the plea agreement, federal prosecutors announced they would no longer seek to imprison the two reporters, who had been ordered jailed for refusing to reveal their source but who had remained free pending their appeal to the Ninth Circuit. Under the agreement, Ellerman would spend two years in prison and pay a $250,000 fine, The New York Times reported. On July 12, 2007, U.S. District Judge Jeffrey White, a Bush appointee, sentenced Ellerman to 30 months in prison. Seeking a lesser sentence, Ellerman's lawyer cited President Bush's July 2 commutation of I. Scooter Libby's sentence for perjury, but White rejected that defense: “Under the president's reasoning, any white-collar defendant should receive no jail time, regardless of the reprehensibility of the crime,” he said. “Libby's sentence was within [federal] guidelines, yet the administration said it was too harsh.”

First Published:
February 01, 2007