The Story Behind the High-Profile Acquittal of Tom Barrack, founder of Colony Capital

Episode description:

In this episode of Law, disrupted, John is joined by Michael Schachter, Partner and Co-Chair of the White-Collar Defense Practice Group at Willkie Farr & Gallagher LLP.  Michael has an unparalleled record of victories in some of the most high-profile criminal trials in the United States. Describing Michael in 2022, Chambers USA stated, “The things he can do in a courtroom are magical.”  Together John and Michael discuss the high-profile defense verdict Michael obtained in the Eastern District of New York on behalf of client Tom Barrack, founder of the global investment firm Colony Capital.

John opens the conversation by asking Michael about the background of the charges against Mr. Barrack. Michael explains that Mr. Barrack had served as the chair of the Inauguration Committee for former President Trump. In the course of the numerous investigations of the former president’s affairs, the Inauguration Committee was examined thoroughly with no findings of wrongdoing. However, this brought Mr. Barrack under the government’s scrutiny.

The charges ultimately brought against Mr. Barrack alleged that he acted as an agent of the United Arab Emirates (UAE) without notifying the Department of Justice in violation of 18 U.S.C. Section 951, obstructed justice, and made false statements to federal agents when they interviewed him. Michael explains that the allegations about acting as an agent of the UAE arose from meetings Mr. Barrack had with the UAE’s National Security Advisor and the Crown Prince. After these meetings, Mr. Barrack made several positive statements in public about the UAE and its leaders, including that the UAE is one of America’s “most important allies,” and its leaders were “young reform-minded leaders.” The government alleged that Mr. Barrack made these statements in an effort to manipulate the American public and policymakers as an agent of the UAE in violation of Section 951. Michael adds that Mr. Barrack made similar remarks at the same time about Qatar, Saudi Arabia and Israel and their leaders.

Michael explains that Section 951 prosecutions are generally reserved for espionage cases, whereas lobbying cases, such as this one, are usually prosecuted under the Foreign Agent Registration Act (FARA). Prosecutions under FARA require the government to prove that the defendant knew of the registration requirement for foreign lobbyists. Michael speculates that the government proceeded under Section 951 to avoid having to prove this element.

The conversation then turns to the evidence presented at trial. Michael explains that the government built its case primarily on text messages and emails taken out of context, particularly a text message in which Mr. Barrack discussed a proposal that he become a special envoy to the Middle East. In that text, Mr. Barrack suggested that if he had such a role, it would benefit the UAE. Michael explains that at trial, he has able to show that Mr. Barrack affirmatively declined the special envoy role. Michael also called former Treasury Secretary Steve Mnuchin to testify about a conversation in which Mr. Barrack spoke against the actions of the UAE in a dispute it was having with Qatar. John and Michael then discuss the tendency of some lawyers to focus so much on documentary evidence that they miss key facts that can only be established by thoroughly interviewing witnesses.

The conversation turns to Michael’s concern that Mr. Barrack’s close relationship with Donald Trump would prejudice the jury. Michael notes that he believes the government’s decision to bring the case in Brooklyn rather than Texas or South Carolina was a cynical attempt to find a jury that would focus on that relationship rather than the evidence presented. He adds that he thinks the prosecution underestimated the jury in that regard. John and Michael then discuss their experiences where counsel tries to appeal to prejudice and how often jurors completely see through such attempts.

John then moves the conversation to Michael’s use of cross-examination during the prosecution’s case to establish his own themes with the jury. Michael describes how the defense team used the cross-examination of an expert called to testify that the UAE was not a good ally to the U.S. to prove that it really was. Michael also recounts how the defense used the cross-examination of former Secretary of State Rex Tillerson, who previously headed Exxon, to show that it made good business sense for the head of a global large global business, such as Colony Capital, to meet with members of royal families in the Middle East who are often key business decision-makers. Michael explains how this helped establish one of his key themes at trial: Mr. Barrack was never acting on behalf of a foreign government; he was acting on his own behalf, doing what was right for himself and his business.

Finally, Michael and John discuss the possible impacts this case might have on government policy. Michael suggests that the case might convince the government to return to a more restrained approach to prosecutions under Section 951, confining them to espionage cases as in the past. He also suggests that the cross-examination of the FBI agents at trial might lead the FBI to record their interviews rather than relying on an antiquated process of relying entirely on one agent making handwritten notes as their only record of the interview.

Published: Dec 16 2022