Stuart D. Gibson and Richard D. Euliss – I have no idea what you Tax Division guys look like. But the brief you filed Tuesday in the UBS AG tax case is so muscular, so righteous, so full of passion …. so, dare we say, sexy?

Sure, you gave the filing in Miami federal court a demure title, Memorandum of Law In Support of Petition to Enforce “John Doeâ€� Summons. But it’s really a big extended middle finger from the Tax Division to the Swiss government and whomever (note: probably the State Department) leaked to the New York Times that the U.S. was considering dropping one of its most important tax-evasion cases ever. The table of contents comes out blasting:

•  UBS BROKE THE LAW AND HELPED U.S. TAXPAYERS EVADE THEIR TAXES
•  UBS KNOWINGLY HELPED ITS U.S. CUSTOMERS COMMIT TAX EVASION
•  UBS PRIVATE BANKER USED STEALTH TO AVOID DETECTION

And so on.

The confrontational language sure suggests the U.S. won’t settle this civil suit without getting what it demands: the names of 52,000 Americans suspected of hiding assets from the IRS in Swiss-based UBS accounts. Jack Blum, a Washington lawyer who specializes in tax evasion investigations, said UBS is “the best case on the facts the U.S. government will ever have.”

Blum added: “The precedent is essential. UBS subjected itself to U.S. jurisdiction through its conduct. Give up here, and it’s Game Over for IRS.”

Indeed, the brief by Gibson, a senior litigation counsel, and Euliss, a trial attorney, states: “The United States has a vital national interest in maintaining the integrity of its system of taxation.”

The brief paints a portrait of arrogance on the part of UBS. Its bankers “lied on Customs forms – claiming to be in the United States for pleasure … and conducted their business under the radar.�

The bank “openly and notoriously� helped U.S. citizens evade taxes and “secretly and consistently violated with impunity� a Qualified Intermediary agreement to disclose foreign and U.S. beneficial owners of its accounts.

UBS trained its bankers in “spycraft� and “illegally� sent them into the U.S. to “troll� for customers, the brief says.

You can read the 55-page filing here.

To step back for a moment: The U.S. is cracking down on tax havens. In February, UBS admitted under a deferred prosecution agreement that it routinely violated U.S. law by recruiting U.S. clients to put assets in offshore accounts, and by filing paperwork to hide its crimes. The bank disclosed as many as 300 U.S. clients identities to the government and agreed to pay a $780 million fine.

A former UBS executive, Bradley Birkenfeld, earlier pleaded guilty to defrauding the U.S. and is reported to be cooperating with federal investigators.

The U.S. pursuit of UBS has ignited a diplomatic uproar in Switzerland, whose whole economy revolves around being a tax haven for the world’s wealthy. The Swiss cited a tax treaty with the U.S. to argue it could not breach its stringent bank secrecy laws.

The brief drips with contempt for UBS’s argument that by signing the tax treaty, the U.S. was essentially saying it was in America’s national interest not to press the Swiss in such delicate matters.

“It is, to put in mildly, presumptuous for a foreign bank that has engaged in serious criminal conduct in the United States to suggest what is in the best interests of the United States,� the brief said in footnote 49.

Then there’s UBS’s argument that the IRS should only get information on customers the bank has acknowledged were engaged in criminal conduct. The brief says that “would be tantamount to the convicted bank robber arguing that he should be given credit for all the times he walked into a bank and didn’t rob it.�

And to UBS’s argument it always acted in “good faith� to comply with U.S. law, the brief bellows: It “bears all the hallmarks of an eleventh-hour confession, made in the hopes the sinner will be absolved from the full consequences of his wrongdoing.�

 “It is time for UBS to face … the consequences it has brought on itself,� the government said.

Acting Assistant Attorney General John A. Dicicco of the Tax Division was also on the brief. U.S. District Judge Alan S. Gold has scheduled a July 13 hearing on the U.S. request for the UBS client names. For UBS’s response read this Associated Press story.

Senator-elect Al Franken will serve on the Senate Judiciary Committee, Congressional Quarterly reported this afternoon.

Al Franken (NNDB)

Sen. Ron Wyden (D-Ore.) was temporarily holding onto the comedian-turned-politician’s seat on the panel, according to CQ. Franken, a Democrat, claimed the disputed Minnesota seat after the state supreme court ruled today that he received more votes than his Republican challenger, former Sen. Norm Coleman.

The Senate plans to swear in Franken next week following the Fourth of July holiday. In theory, Franken will give the Democrats a filibuster-proof majority. With a united block of 60 Democratic senators, Majority Leader Sen. Harry Reid (D-Nev.) could finally schedule votes on DOJ nominees Dawn Johnsen for the Office of Legal Counsel, Thomas Perez for the Civil Rights Division and Mary L. Smith for the Tax Division.

But Franken’s seating might not be enough to schedule votes on the nominations or push through the long-stalled Johnsen.

Democratic Sens. Edward Kennedy (Mass.) and Robert Byrd (W.Va.) have been absent from Congress with severe health problems. Byrd was released from the hospital today after battling a staph infection for a month. It is unclear when he will be back to cast votes.  Kennedy is being treated for brain cancer. He has said he will try to come back to Washington this summer to work on health care legislation.

Even if one of the ailing senators is able to cast votes, the DOJ nominations could still be held up. The Senate Judiciary Committee reported the Johnsen nomination to the Senate for consideration on March 19. Byrd was present to vote in the Senate until mid-May. Kennedy was present intermittently throughout March and April to cast votes.

Monica Conyers

A paralegal at the U.S. Attorney’s Office in Detroit has been suspended due to suspicions that she leaked confidential information to Monica Conyers’s former chief of staff Sam Riddle, while he was under criminal investigation, reports the Detroit News.

When asked by telephone whether she was still working as a paralegal in the U.S. Attorney’s special prosecutions unit, Wendolyn Greene responded with a curt “no,” and hung up the phone.

When the paper called U.S. Attorney’s Office spokeswoman Gina Balaya to find out more, they were told “We had an employee by that name; I don’t know her status.”  Balaya later called the paper back to clarify, saying that Greene “is still an employee of this office.”  But beyond that, “we can’t discuss her status at all,” she said.

The controversy came around the time that Synagro Technologies Inc.’s bribery scandal became public, which was about a year ago.  Greene has been dating Riddle, and federal officials suspected that Greene leaked information regarding an ongoing federal investigation, the paper’s source said.

One source told the paper that officials suspected that Greene told Riddle about a search of someone’s home that was part of a Detroit City Hall investigation. The investigation of Greene is being conducted by the U.S. Attorney’s Office in Grand Rapids in order to avoid any conflict of interest, sources told the paper.

To read our report on the Synagro Technologies Inc. bribery scandal, click here.  To read about John Conyers has become implicated in the scandal click here.

Two senior Justice Department officials appeared today before federal Judge Emmet Sullivan in Washington to defend the work of their prosecutors in a narcotics trafficking case.

But the mercurial Sullivan never gave them a chance to explain. Instead, he posed more questions for the government to answer in a brief due by July 10.

Paul O’Brien, chief of the Narcotics and Dangerous Drug Section, and Richard Weber, chief of the Money Laundering and Asset Forfeiture Section, appeared in support of prosecutors Paul Laymon and Wanda Dixon. Sullivan — perhaps still hearing the echos of applause for his role in uncovering Brady violations in the Ted Stevens case — is doggedly questioning whether the prosecutors violated the Brady rights of Zhenli Ye Gon, a Chinese-born Mexican businessman charged with conspiring to manufacture heaps of methamphetamine bound for the U.S.

The case has been on the brink of trial on several occasions. But last week the government moved to dismiss the case, citing Mexico’s extradition request and “the prospect of a very lengthy sentence” for Ye Gon if he’s convicted south of the border, according to court documents.

Also in that motion to dismiss, the government revealed ”evidentiary concerns” — foremost among them that a key government witness recanted more than a year ago. This is what got Sullivan’s attention.

Ye Gon’s defense team, which includes Manuel Retureta and A. Eduardo Balarezo, has asked Sullivan to dismiss the case with prejudice, citing the government’s failure to disclose these “evidentiary concerns” in a timely manner. The Justice Department strongly denies any wrongdoing. Brady rights kick in only if a trial is scheduled and fairly imminent, the government has argued.

Sullivan asked whether the Justice Department’s assertions that it had worked hard to produce evidence should be “viewed with skepticism.” Noting the complexity of the case — evidence and witnesses are sprawled across the globe — Sullivan asked how the defense could make use of the newly disclosed information four weeks before the case was set for trial. He also asked the government to explain how Ye Gon’s lawyers could have come by the information through other means or sources.

“All of this raises questions about whether the government ever intended to abide by its constitutional obligation” to turn over that information, Sullivan said, reading from prepared remarks, as he did in the Stevens case.

The judge cited a passage in the U.S. Attorneys’ Manual, which requires that prosecutors take a broad view of materiality and err on the side of disclosure. ”How does what the government did in this case comport with the manual” or Attorney General Eric Holder’s repeated pronouncement that the mission of prosecutors is not to win cases “but to do justice?” Sullivan asked.

He noted that the Ye Gon case was the second in three months in which the government was asking him to dismiss a case after Brady and Giglio issues had been raised. The first, of course, was the case against former Alaska Sen. Ted Stevens. It was O’Brien who led the DOJ internal investigation of the handling of evidence by the Stevens prosecutors and who stood before Judge Sullivan in April and apologized in open court for the errors that led to dismissal of the high-profile public corruption case.

The judge mused that it appeared the government’s approach is to withhold material, until it gets caught in the act, and then move to dismiss. ”That would be shocking,” he said.

He also asked  whether prosecutors violated D.C. rules of professional conduct by potentially making false statements to the court in a previous hearing and in a bill of particulars.

O’Brien approached the podium once Sullivan finished and told the judge that he disagreed with the defense team’s characterization — and by implication, the judge’s — of the prosecutors’ behavior. His silence, he said, should not be confused for acquiescence.

“I’m just raising points,” not making any findings, Sullivan said. He then asked O’Brien whether there could ever be a Brady violation without a trial date.

O’Brien said Brady, “at its core, is a trial right.” The Justice Department  argued in a brief last week that due process is satisfied as long as the material is disclosed in time for the defendant to make effective use of it at trial. (Click here for a copy of the brief.)

Sullivan set a hearing in the case for July 30.

Former Alabama Gov. Don Siegelman (D) asked Monday for a new trial based on evidence discovered after his 2006 federal conviction on corruption and bribery charges.

Siegelman followed the lead of his co-defendant in the case, former HealthSouth CEO Richard Scrushy, who filed a motion Friday for a new trial. Siegelman attorney Susan G. James wrote in a court filing that the former governor should have a new trial because prosecutors failed to produce Brady material, tampered with witnesses and targeted Siegelman for political reasons. James also said there should be a new trial because Middle District of Alabama U.S. Attorney Leura Canary, the wife of Republican operative Bill Canary, did not recuse herself from the case despite announcing she would.

The government alleged Siegleman had improperly appointed Scrushy to a hospital regulatory board in exchange for Scrushy donating $500,000 to a campaign for a state lottery that Siegelman supported. Scrushy is in prison. Siegelman is out on bond as he appeals.

Siegelman and Scrushy have said the prosecution was intended to remove a popular Democratic governor.

Here are the major concerns listed by James in the filing:

ISSUE I. THE GOVERNMENT’S FAILURE TO PRODUCE EXCULPATORY AND IMPEACHING INFORMATION IN ITS POSSESSION AS TO KEY WITNESSES AND CORRECT FALSE OR MISLEADING TESTIMONY DURING TRIAL VIOLATED SIEGELMAN’S RIGHTS UNDER THE DUE PROCESS CLAUSE OF THE FIFTH AMENDMENT AND THE GOVERNMENT FAILED  TO COMPLY WITH ITS OBLIGATIONS UNDER THE JENCKS ACT.

Issue II:  BECAUSE OF PROSECUTORIAL MISCONDUCT IN THIS CASE, INCLUDING IMPROPER CONTACTS WITH JURORS, IMPROPER EX PARTE COMMUNICATION WITH THE COURT, AND IMPROPER CONDUCT IN PREPARING GOVERNMENT WITNESSES TO TESTIFY AT TRIAL AND FAILURE TO PROVIDE BRADY MATERIAL, SIEGELMAN WAS DEPRIVED OF HIS FIFTH AMENDMENT RIGHT TO A FAIR TRIAL AND HIS SIXTH AMENDMENT RIGHT TO AN IMPARTIAL JURY.

Issue III. FAILURE TO DISCLOSE EX PARTE COMMUNICATIONS AND THE EXISTENCE OF A SECRET INVESTIGATIVE REPORT ON THE AUTHENTICITY OF JUROR EMAILS, A CRITICAL MATERIAL FACT IN A MOTION THEN PENDING BEFORE THE COURT, VIOLATED SIEGELMAN’S SIXTH AMENDMENT RIGHT TO COUNSEL AND HIS FIFTH AMENDMENT RIGHT TO DUE PROCESS.

ISSUE IV: THE FAILURE OF U. S. ATTORNEY LEURA CANARY TO ABIDE BY HER ANNOUNCED RECUSAL DEPRIVED SIEGELMAN OF HIS ENTITLEMENT TO A DISINTERESTED PROSECUTOR.

ISSUE V: SIEGELMAN WAS SELECTIVELY PROSECUTED FOR POLITICAL PURPOSES IN VIOLATION OF HIS FIFTH AMENDMENT RIGHT TO EQUAL PROTECTION OF THE LAWS AND HIS FIRST AMENDMENT RIGHT TO RECEIVE A CONTRIBUTION TO AN EDUCATION LOTTERY FOUNDATION HE SUPPORTED.

Cuyahoga County, Ohio County Commissioner Jimmy Dimora urged the Justice Department to review a federal investigation into alleged corruption by local Democrats, Cleveland’s NewsNet5 reported yesterday.

Jimmy Dimora (Cuyahoga County)

Dimora, who is also head of the Cuyahoga County Democratic Party, said the probe is a “witch hunt” by the Bush DOJ, according to NewsNet5. The FBI raided the commissioner’s home and office last summer, according to Cleveland’s WCPN. Corruption charges were filed this month in federal court against four people, but the indictments did not name Dimora, WCPN reported. Multiple references in the indictments to “Public Official Number Oneâ€� are believed to refer to Dimora, according to WCPN.

“I believe that the … DOJ was engaged in a conspiracy to prosecute democratic elected officials in the Great Lakes industrial areas,” Dimora said, according to WCPN. “The Republican Party, through the DOJ, was trying to destroy me and our local democratic party to prevent us from delivering the votes that were necessary to elect Barack Obama.â€�

Dimora said he will send the Justice Department a formal request for a review of the probe later this week, according to WCPN.

The Supreme Court gave itself another opportunity yesterday to look at a case involving “honest services” fraud — a popular charge used by the Justice Department.

The high court granted certiorari Monday to the “honest services” fraud case of former Alaska Rep. Bruce Weyhrauch. The former lawmaker said prosecutors can’t claim he defrauded Alaskans when he secretly tried to work for an oil field business while the legislature was in session, McClatchy reported. He said his actions were legal under state law and shouldn’t be illegal under federal “honest services” mail fraud laws, according to McClatchy.

We previously reported that DOJ has used “honest services” charges as the lead charge against 79 defendants in fiscal 2007, up from 28 in 2000. We noted that Northern District of Illinois U.S. Attorney Patrick Fitzgerald has made liberal use of the statute.

In April, the Supreme Court agreed to review the 2007 conviction of former newspaper mogul Conrad Black, who was prosecuted by Fitzgerald’s office. Black, who controlled Hollinger International, the company that owned the Chicago Sun Times among other publications, was found guilty of not “honestly servingâ€� the company’s shareholders by diverting corporate funds to his own pockets.

By taking on the Weyhrauch and Black cases, the Supreme Court will be able to completely review how “honest services” fraud is applied to cases involving the public and private interests. A severe limitation on the law’s use could be unwelcome news for the Justice Department, which has used the statute in the successful prosecutions of imprisoned Mississippi trial attorney Paul Minor in 2007 and ex-lobbyist Jack Abramoff in 2008. The department is also using the statute in the prosecution of Abramoff associate Kevin Ring.

At yesterday’s White House event intended to mollify the gay community, President Obama re-iterated his commitment to gay rights, but still didn’t show any appetite for a political battle over gay rights at this point in his administration, telling the audience:

“We’ve been in office six months now. I suspect that by the time this administration is over, I think you guys will have pretty good feelings about the Obama administration.”

On the issue of a brief the Department of Justice filed defending the Defense of Marraige Act in court, all Obama said was that he would continue to push Congress to repeal the law, a weak response given that Obama’s staff secretary Lisa Brown recently expressed regrets about the brief.  In his speech, Obama also pledged to get hate-crimes legislation through Congress.

The most interesting part of his speech, noted by Josh Gerstein, was this quote:

“I know that every day that passes without a resolution is a deep disappointment to those men and women who continue to be discharged under this policy — patriots who often possess critical language skills and years of training and who’ve served this country well. But what I hope is that these cases underscore the urgency of reversing this policy not just because it’s the right thing to do, but because it is essential for our national security.”

Well, thank god gays are important to our national security, otherwise…

The Obama administration is proceeding with an abundance of caution in the U.S. Attorney selection process. For that reason, Oxford, Miss., criminal defense attorney Christi McCoy hit a bit of a hiccup in the vetting process earlier this year for the Northern District of Mississippi, we’re told. McCoy had professional connections to two figures in the famous Dickie Scruggs case. Scruggs is the mega-rich trial lawyer and brother in law of former Sen. Trent Lott (R-Miss.) who pleaded guilty in connection with two sets of charges alleging he attempted to bribe judges in Mississippi. Apparently, even the whiff of controversy — no matter how tangential – is enough to give the vetters pause.

But now McCoy’s nomination appears solidly on track. Mississippi legal reporter Patsy Brumfield reported June 16 that Rep. Bennie Thompson (D-Miss.) had formally recommended McCoy to the White House. Thompson told Main Justice in May that he’d made his recommendations, but wouldn’t confirm any names. (Mississippi Sens. Thad Cochran and Roger Wicker are Republicans, so Mississippi’s congressional Democrats led by Thompson get to make the recommendation.)

Since then, we’ve talked with  two people knowledgeable about the process who say McCoy is indeed the prime candidate to replace Bush-appointee Jim Greenlee.

We’d reported earlier about rumors that McCoy had hit an unknown “snag” in the process. Now we hear that snag  apparently was her former employment with the law firm of Joey Langston — who pleaded guilty to conspiring with Scruggs to bribe a judge — and her representation of former State Auditor Steve Patterson, who pleaded guilty in another Scruggs-related judge bribery case.

Langston pleaded guilty in 2008 to conspiring to bribe Hinds County Circuit Judge Bobby DeLaughter to rule favorably on a Scruggs case. Langston allegedly dangled the prospect of a federal judgeship for DeLaughter – with help from Scruggs’s brother-in-law, Lott, who as senator was in a position to help push candidates through. Lott later acknowledged he’d called DeLaughter about the judgeship but said he didn’t actually recommend DeLaughter, who wasn’t nominated.

McCoy is a 1994 graduate of Ole Miss law school. Thompson

It took a little while, but we finally got comment from the Motley Rice law firm about whether the Department of Justice required — or merely helpfully suggested — that it destroy copies of classified U.S. intelligence documents about Saudi Arabian finances that were leaked anonymously to the firm. The answer:  Yes, the DOJ told the law firm to destroy the documents.

Some quick background: Motley Rice represented 9/11 victims’ family members in a civil lawsuit seeking damages from members of the Saudi royal familyand Saudi businessmen (note: there are no businesswomen in discriminatory Saudi Arabia) for allegedly financing terrorism. The U.S. opposed the lawsuit, arguing it violates the Saudis’ sovereign immunity, and the Saudis have denied the allegations. After lower courts dismissed the lawsuit twice, the Supreme Court on Monday declined to hear an appeal.

This New York Times story last week described some of the incriminating documents the lawyers turned up linking Saudis to terrorist financing. The NYT also described the leaked U.S. intel docs and said ”the Justice Department had the lawyers’ copies destroyed.”

Justice Department spokeswoman Tracy Schmaler took issue with that characterization and issued a statement that read, in part: “Any sensitive material that has been destroyed was destroyed at plaintiffs’ counsel’s option.�

We were dubious that the law firm had the “option” not to destroy its copies of the documents or otherwise fail to hand them over. On Monday, Motley Rice sent us this Dec. 19, 2008 letter from the U.S. Attorney’s Office for the Southern District of New York. The firm blacked out the name of the writer. But it reads:

“[P]lease confirm in writing that you have turned over all originals and all copies of the identified Documents, whether in electronic or paper form, and that any materials derived from the identified Documents, such as attorney notes or drafts, have been destroyed.” (emphasis added).

The letter goes on to say:

“You asked whether the United States would consent to allow Motley Rice to refer to the Documents in a ‘non-substantive’ court filing, or whether  the United States would provide redacted or otherwise unclassified version of the Documents that have been confirmed to be classified … [W]e cannot consent to Motley Rice’s possession or use of the Documents in any form or manner.”

There you have it. The U.S. is in possession of documents that — judging from the law firm’s desire to use the material in its lawsuit — one can reasonably conclude support a link between members of the Saudi royal family and terrorist front groups. But we knew that, didn’t we? We know that our government knows that the Saudis (allegedly) funded al-Qaeda. Would someone please hurry up and discover a viable alternative energy source to oil?