Pittsburgh Post-Gazette - Win at all costs - Hyde Amendment makes violations costly

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Hyde Amendment makes violations costly

December 13, 1998
By Bill Moushey, Post-Gazette Staff Writer

Last year, Congress provided a measure of recourse for some victims of overzealous federal prosecutions.

Legislation introduced by U.S. Rep. Henry Hyde, R-Ill., chairman of the House Judiciary Committee, allows defendants to recover reasonable defense costs if they can show a federal case was "vexatious, frivolous or in bad faith."

Richard Holland, a 19-year veteran of the Virginia Senate, was the first to use the amendment successfully.

Holland is chairman of the board of the Farmer’s Bank of Windsor, Va. In 1992, he and his son, Richard Jr., the bank’s president, were told by bank examiners they would be fined and probably sent to prison for a series of improper loans made during the nationwide crash in real estate prices that followed changes in the federal tax code in 1986.

Holland told them they’d done nothing wrong.

"We told all of our employees to cooperate with these people," he said. "Whatever they want, give it to them."

In 1997, he and his son were indicted on 31 counts of banking law violations. The government then proceeded to try to destroy them professionally and personally, said Holland, now 73.

Less than a month before his indictment, his wife died in her sleep. Holland said his lawyers asked the government to hold off on the indictments while they mourned.

"They told my lawyer, ‘No sir, we’re going to indict them right now,’ " Holland recalled last week.

Last April, during a pre-trial hearing held four months before the trial was scheduled to start, a federal judge dismissed the charges after prosecutors presented their case. The government had presented no evidence of a crime, the judge said. Afterward, upon his return to the Virginia Senate, Holland received a standing ovation.

He then filed a claim with the government under the Hyde Amendment. After a two-day hearing, U.S. District Judge Henry Coke Morgan awarded the Hollands $570,000 toward their $1.6 million in legal fees, terming the government’s actions "vexatious."

The Justice Department has said it will appeal.

That same month, Chief U.S. District Judge Richard Alan Enslen of the Western District of Michigan ordered the government to pay $404,737 to lawyers representing a company called Ranger Electronic Communications Inc. in another Hyde Amendment case.

He concluded that federal prosecutors had failed to disclose evidence that might have helped prove that the owners of the company were innocent of charges of illegally importing radio equipment.

In his ruling, Judge Enslen, quoted from Hyde’s speech on the floor of the U.S. House of Representatives during debate on his amendment.

"[Some federal prosecutions are] not just wrong, but willfully wrong . . . frivolously wrong," the judge stated. "[These federal prosecutors] keep information from you that the law says they must disclose.. . . They suborn perjury."

Holland said he was fortunate to have the resources to fight the government but that it scared him to think about those who don’t.

"The people who don’t have the wherewithal, the resources or the will to fight the government when they say you’re going to prison for 50 years, that’s bound to scare the hell out of them," he said.

He said he found it easy to believe that someone might plead guilty to a lesser charge, rather than face a trial and decades in prison.

"That has made me believe there actually might be some people in prison who are not guilty," he said.