A recently unsealed USDCâDC opinion reveals that Greg Craig, former White House Counsel under President Obama, failed to preventâon privilege groundsâtwo of his former Skadden law partners from testifying before a grand jury. Craigâs privilege loss paved the way for his indictment on charges of providing misleading and false information to the DOJ, but also provides lessons for in-house lawyers, particularly law firm in-house counsel. In re Grand Jury Investigation, 2019 WL 2179116 (D.D.C. Mar. 4, 2019) (opinion available here).
This privilege tale involves many of todayâs inside-the-beltway subjects: Manafort, Mueller, Russia, a foreign leader, and DOJ investigations. So, letâs explore.
2011âUkraine Trial of Yulia Tymoshenko
In October 2011, a Ukrainian court convicted Orange Revolution leader and former Ukrainian Prime Minister Yulia Tymoshenko for abusing her official powers in negotiating a natural-gas deal with Russia while serving as prime minister.
After issuance of the seven-year jail sentence, $190M fine, and a ten-year ban from political office, many claimed that the trial and conviction were politically motivated by then-President Viktor Yanukovych, her political rival. One publication labeled Tymoshenko a âvictim of a kangaroo trial.â
2012âSkadden Report
Paul Manafort, who represented Mr. Yanukovych, arranged for the Skadden Arps firm to investigate the Tymoshenko trial and prepare a report evaluating whether the trial complied with Western standards of due process. The Skadden team, led by Greg Craig, produced a 300+ page report concluding, among other things, that the court based its verdict on factual determinations that had evidentiary support. You may read the Skadden report here.
Just before the Reportâs release, Craig contacted a New York Times reporter and provided him with a copy. The reporter published an article on the report, noting that Skadden âseemed to side heavily with the government of President Viktor F. Yanukovich.â Craig later provided interviews with other publications.
December 2012âJanuary 2014âFARA Unit (Relevant Period)
The Foreign Agents Registration Act (FARA) requires any person acting as âan agent of a foreign principalâ to register with the Attorney General for certain activities, such as public-relations efforts. Immediately after the Reportâs release and Craigâs interactions with the press, a DOJ FARA Unit began investigating whether Skadden and/or Craig should have registered as a foreign agent.
Importantly, during this Relevant Period Craig provided statements to FARA investigators and discussed these issues internally with Skadden lawyersâincluding Skaddenâs General Counsel. Did Craig believe the privilege covered these conversations? Did the Skadden GC give him an Upjohn warning?
2017âSpecial Counsel Robert Mueller
During his investigation into Russiaâs interference with the 2016 presidential election, Special Counsel Mueller, while tracing Paul Manafortâs activities, investigated Skadden and Craigâs statements to the FARA Unit and their failure to register. He then transferred the matter to the U.S. Attorney for the District of Columbia.
January 2019âSkadden/DOJ Settlement
In January 2019, the DOJ determined that Skadden and its partners, including Craig, were Ukraine agents by contributing to a Ukraine âpublic relations campaign directed at U.S. mediaâ but failed to register as FARA requires. Skadden and the DOJ reached a settlement that compelled the firm to retroactively register and pay a $4.6M penaltyâthe amount it received in fees for the Report. You may read the settlement here.
FebruaryâMarch 2019: Privilege Issues Arise
The USAO, however, continued to pursue Craig. It empaneled a grand jury and called Skaddenâs General Counsel and another Skadden partner to testify about their communications with Craig during the Relevant Periodâduring the FARA inquiries.

But Craig protested, saying that the attorneyâclient privilege precluded their testimony because he believed that the firm GC and other law partner were his lawyers when the conversations occurred. The DOJ filed a motion, refuting Craigâs last-minute privilege invocation and seeking an order that no privilege existed to prevent the Skadden lawyersâ grand-jury testimony.
Craig withheld no arrows, asserting not only the privilege but that his (now former) law partners âbreached professional obligationsâ by earlier discussions with DOJ and that the DOJâs motion was simply âan effort to obtain retrospective absolution for the sins committed by the Skadden lawyers.â Think Skadden will invite Craig to its next alumni party?
The Court went to the heart of the matterâdid an attorneyâclient relationship exist between Craig and his Skadden partners? The test âis one of objective reasonableness,â and âthe ultimate question is whether a client and an attorney explicitly or by their conduct, manifested an intention to createâ the relationship. Factors to consider areâ
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The nature of the information shared with the attorney;
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Actions taken by the lawyer on the clientâs behalf;
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The payment of fees and existence of an agreement; and
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The passage of time between the alleged former representation and the current litigation.
Craigâthe one with the burdenâproduced nothing more than his âbeliefâ that his Skadden partners were his personal lawyers, which, standing alone, is insufficient.
No Upjohn Warning
Skaddenâs General Counsel did not provide Craig with an Upjohn warning, and Craig argued that the lack of warning was evidence that his partners intended to represent him personally. This Upjohn âtwist,â however, was unavailing.
There was no evidence that, during the Relevant Period, Skaddenâs interest and Craigâs interest diverged so that a conflict of interest and the need for an Upjohn warning arose. In addition, the Court found that Craig was âa sophisticated attorneyâ and, therefore, did not need an Upjohn warning to know that the firmâs lawyers were not his lawyers.
April 2019âIndictment and Privilege Agreement
The Court held that, because no privileged relationship existed, the privilege did not prevent the Skadden GC and another partner from testifying about communications with Craig during the Relevant Period. The lawyers testified, and the DOJ indicted Craig on April 11, 2019.
But he maintained privilege hope.
After the indictment, Craig informed the trial judge that he may seek to preclude the Skadden lawyersâ trial testimonyâagain on privilege grounds. Craig and the DOJ reached an agreement, however, that precluded further privilege rulings. The agreement, available here, allows prosecutors to question the Skadden lawyers at trial about their Craig communications during the Relevant Periodâthe same ruling as the grand-jury judge.
Trial is set to begin August 12, 2019.
POP Analysis
Josh Gerstein, Senior Legal Affairs Contributor at Politico, was the first to sniff out this developing privilege issue, and published two informative pieces, available here and here, on the matter. Strip away the inside-the-beltway intrigue and lessons abound for in-house lawyers and law firm general counsel.
Donât let Upjohn warnings slip your mindânon-lawyer executives certainly need the instructions when a conflict of interest is foreseeable. And to law firm in-house lawyersânot all firm lawyers are as âsophisticatedâ as Mr. Craig, a former White House counsel, on evidentiary privileges. A reminder for them, too, is worthwhile.
For those individuals talking to entity counsel, address the representation head-on. If you want a privileged conversation, expressly establish an attorneyâclient relationship and document it. Communicate in a confidential manner with the lawyer, and include âprivileged and confidentialâ in written correspondence. Create the privilege evidence on the front end and be ready to show it to a judge on the back end.
These are privilege foundation issues, and we donât need Mueller, Manafort, or Russian operatives to remind us. Or at least we shouldnât.