Minutes from November 5, 2003

Minutes of the November 5, 2003
United States Sentencing Commission
Public Meeting

Chair Murphy called the meeting to order at 9:35 a.m. in the Commissioners Conference Room.

The following Commissioners and staff participated in the meeting:

Diana E. Murphy, Chair
Ruben Castillo, Vice Chair
William K. Sessions, III, Vice Chair
John R. Steer, Vice Chair
Michael E. O’Neill, Commissioner
Michael E. Horowitz, Commissioner
Ricardo H. Hinojosa, Commissioner
John Richter, Ex Officio Commissioner
Edward F. Reilly, Jr., Ex Officio Commissioner
Timothy B. McGrath, Staff Director
Charles Tetzlaff, General Counsel
Judy Sheon, Special Counsel

Chair Murphy began the meeting by welcoming the public and introduced the new Department of Justice (DOJ) representative, John Richter, Chief of Staff of the Criminal Division at DOJ. She noted that he would be with the Commission until DOJ designated a new ex officio commissioner.

Chair Murphy reported that the Commission’s report on downward departures was submitted to Congress on October 24, 2003, and is available on the Commission’s website. She also noted that the General Accounting Office’s (GAO) report on sentencing departures was released from an embargo late Friday, October 31, 2003, and is available on GAO’s website.

Chair Murphy announced that the Commission’s next public meeting will be on December 2, 2003 in Sarasota, Florida, where the Commission will be meeting with the Criminal Law Committee. Anyone interested in participating in the meeting from Washington will be able to do so via telephone hookup from the commissioners conference room.

Chair Murphy mentioned that the Commission would not be able to adjourn at the end of the public meeting as it usually does, but must continue its briefing session to address two issues that were passed over during the previous day due to a lack of time.

Staff Director McGrath reported that the Commission has issued a Guide to Publications and Resources which lists and describes the Commission’s available publications, data, and information resources. He noted that there will be an unavoidable delay in the issuance of two other Commission publications due to the PROTECT Act: the Guidelines Manual and the Annual Report and Sourcebook; both should be ready for distribution in late November or early December.

Chair Murphy announced that the minutes from the October 8, 2003 public meeting had been circulated to the commissioners and noted that they were longer than average because of voting on amendments related to the PROTECT Act. Vice Chair Steer requested a wording change on page seven. Commissioner Horowitz moved to approve the minutes as corrected, and Vice Chair Sessions seconded. The minutes were approved unanimously.

Chair Murphy stated that the first item on the agenda was to vote on the retroactivity issue in connection with the oxycodone amendment. She asked General Counsel Tetzlaff to summarize the background.

General Counsel Tetzlaff recalled that the Commission had promulgated an amendment on March 26, 2003 changing the drug equivalency tables in §2D1.1 to use the weight of actual oxycodone involved in the offense, instead of the weight of the entire pill. While this amendment resulted in higher penalties for offenses involving oxycontin, it also resulted in a decrease in penalties for other prescription drugs containing small amounts of oxycodone, specifically percocet and tylox. Rule 4.1 of the Commission’s Rules of Practice and Procedure provides that the issue of retroactivity be considered at the time of amendment, but the Commission chose to obtain additional information and a more thorough impact analysis and so voted to waive the rule. The Office of Policy Analysis has now provided impact data on the number of eligible defendants sentenced through November 1, their average sentences, and the number eligible for immediate release and in the future. Information also was provided with respect to the nature of the offenses.

Section 1B1.10 of the guidelines indicates that relevant factors for considering retroactive application are the purpose of the amendment, the magnitude of the change, and the difficulty of applying the amendment retroactively. Should the Commission wish to make the amendment retroactive, a motion to that effect would be in order adding Amendment 657 (the oxycodone amendment) to the list of amendments appearing in §1B1.10 (c), to be effective immediately with staff authorized to make technical and conforming changes as necessary.

Vice Chair Castillo moved to apply Amendment 657 retroactively. Vice Chair Sessions seconded the motion. Vice Chair Castillo stated that he had not previously made a motion for the retroactive application of an amendment in his four years as a commissioner but believed this situation to be unique. In this case, the purpose of the amendment was to make the offense more proportionate to other similarly scheduled controlled substances. He also expressed concern about fairness and equity. If the amendment were applied retroactively, the change in the average sentence range would be from 62 months to 25 months. Seventy six people could be affected; nearly half would be sentenced to time served and eligible for immediate release according to the data analysis. Twenty five additional defendants could be eligible for release within twelve months if the amendment were made retroactive. Finally, Vice Chair Castillo noted that the difficulty in application did not appear to be particularly burdensome. Given the overcrowded conditions of prisons, the purpose of the oxycodone amendment, and no great burden on judges by retroactive application of the amendment, this was the strongest case for retroactivity he has seen as a commissioner.

Ex Officio Commissioner John Richter stated that DOJ, particularly the Drug Enforcement Administration, was especially concerned that retroactive application of this amendment could send the wrong signal to the types of persons that engage in this type of distribution. Based on staff case summaries, these defendants were not particularly sympathetic. A sizable number who would be affected by retroactive application were professionals, pharmacists, and others who owed a higher duty and were more morally culpable for their wrong doing than many other defendants. Although the number affected by retroactive application would be low, oxycodone is a growing area of abuse and therefore a law enforcement priority. DOJ and the Drug Enforcement Agency are concerned that retroactive application would be interpreted as a suggestion that this behavior was to be condoned more than other types of illegal drug activity. He stated his belief that the Commission should carefully consider these concerns.

Vice Chair Castillo noted that when the Commission voted on the amendment in March, it sent a signal that it took oxycodone seriously by increasing penalties for this particularly dangerous drug. His motion on retroactivity was based on concerns of proportionality, fairness, and equity, and whether defendants are sympathetic was not a factor for the Commission to consider. If it were, the Commission would never make any amendment retroactive because any defendant sentenced by a federal judge to a substantial period of time is presumably not sympathetic.

Chair Murphy asked Staff Director McGrath to call the role on the pending motion. Commissioner O’Neill voted no. Commissioner Hororwitz voted yes. Commissioner Hinojosa voted yes. Vice Chair Steer voted no. Vice Chair Sessions voted yes. Vice Chair Castillo voted yes. Chair Murphy voted yes. The motion passed by a vote of five to two.

Chair Murphy stated that proposed amendments to Chapter 8 of the guidelines were the next matter on the agenda, and she asked General Counsel Tetzlaff to review those amendments.

General Counsel Tetzlaff stated that over eighteen months ago, the Commission appointed an ad hoc advisory group on the organizational guidelines to review the general effectiveness of Chapter 8, with particular emphasis on examining the criteria for an effective program to ensure an organization’s compliance with the law. The Organizational Guidelines Advisory Group presented its report and recommendations to the Commission last month, and the Commission might publish for comment a proposed amendment to Chapter 8 to provide greater guidance, emphasis, and clarity regarding effective compliance programs. In order to emphasize the importance of compliance programs, as well as to provide more guidance on the attributes of such programs, the amendment would move the seven minimum steps for a compliance program from their present location in an application note to a new guideline, §8D2.1. The proposed amendment would define the obligations and purposes of such programs, add more detail to the seven minimum requirements, and provide definitions throughout the associated commentary. In addition, four general issues for comment had been formulated by the Commission. General Counsel Tetzlaff stated that a motion to publish the proposed amendment and accompanying issues for comment would be in order, with a 60 day comment period and the staff being authorized to make technical and conforming changes if necessary.

Vice Chair Castillo moved to publish the amendment and issues for comment. Vice Chair Steer seconded the motion.

Vice Chair Castillo commended Chair Murphy and the commissioners for having the foresight to appoint this advisory group, well before the national outbreak of corporate scandals that has been continually in the news and also well before the Sarbanes-Oxley legislation. He stated that this was a good example of the Commission acting at its best. The Commission proactively appointed an advisory group made up of nationally recognized experts on the organizational guidelines and corporate standards. The reason the Commission is able to move expeditiously after receiving the report is in no small part due to the hard work of Commission staff, including Judy Sheon and Paula Desio. He expressed the hope that this is an example of how the Commission could operate in other areas. He also hopes that practitioners in this area would consider the issues for comment and provide the Commission with their input.

Vice Chair Steer stated that the effective compliance program component of the organizational guidelines has been embraced broadly and noticed in academic and business circles. It has also received worldwide acclaim as being an innovative approach that does not overburden companies. It provided useful incentives which could work in tandem with regulatory and law enforcement agencies. For a variety of reasons the Commission has until now not been able to devote attention to improving the provisions since their inception, but it has continued to support them through regular training programs throughout the country. Now, with the help of the advisory group, the Commission has a number of excellent suggestions for strengthening this component of the guidelines and has already put the advisory group report out for public comment. Today, by publishing the proposed amendments for comment, the Commission will send a signal to the interested public that it is beginning its formal rule making process to consider building some or all of these suggestions into the guidelines. Vice Chair Steer stated that this is an excellent step for the Commission to take at this time.

Commission O’Neill remarked that because corporate offenders are among the most sophisticated types of criminals prosecuted in state or federal court, it would behoove the Commission and DOJ to act proactively to make as many corporations as possible aware of the organizational guidelines and their benefits and to provide guidance to effectuate compliance programs in corporate environments. This is a good area for the Commission to work with DOJ to develop means and methods to determine more precisely what effect the organizational guidelines are having out in the field, whether corporations are taking advantage of the benefits of the guidelines, whether more wrongdoing is being reported, and whether the guidelines are acting as a deterrent in the field. Taking steps to determine whether the guidelines are achieving their purpose would benefit the corporate community, DOJ, and the Sentencing Commission.

Ex Officio Commissioner John Richter stated that DOJ is on the frontlines of combating corporate fraud and commends the Commission and the advisory group for their hard work and efforts on this product. DOJ would welcome the opportunity to work with the Commission to ensure that prosecutors and defense counsel nationwide become aware of the proposed amendments and that training programs address the changes to the organizational guidelines. DOJ is looking forward to reviewing comments from the public on this matter. He hopes that this will continue to be an effective tool and methodology by which DOJ and the Commission can ensure corporate fraud is prevented and adequately addressed through the criminal justice system.

Chair Murphy commented that one unusual thing about this amendment is that the impetus for the Commission’s work in this area did not come from Congress or another government entity, but rather from the defense and health care industries, the corporate compliance field, academies, and many other interested individuals. They expressed the view that changes to Chapter 8 were necessary to make the guidelines more effective. She noted that law enforcement and the defense community were also involved in creating the proposed amendments. Chair Murphy expressed her belief that the package could be of great value to the guidelines, to the corporate world, and to the criminal justice community. She hopes that the interested public would respond to the Commission’s notice and issues for comment.

Chair Murphy asked Staff Director McGrath to call the roll on the pending motion to publish the proposed amendments to the Chapter 8 guidelines and the four issues for comment. The motion passed unanimously.

Vice Chair Steer asked to return to the issue of retroactive application of the oxycodone amendment. He noted that in the past the Commission has assisted in the identification of defendants who might benefit from retroactivity and asked that the staff investigate what might be done now. General Counsel Tetzlaff stated that the Commission, at a minimum, could work with the Practitioner’s Advisory Group and representatives of the federal defenders on this matter. Chair Murphy encouraged the staff to investigate the appropriate way to proceed.

Chair Murphy closed the meeting by reporting that for some time there has been a rumor of an oversight hearing in the Senate on downward departures. The Commission was just told there would be a hearing on November 12 before the Judiciary subcommittee chaired by Senator Sessions; there was no information on the exact time of the hearing.

Chair Murphy adjourned the meeting at 10:05 a.m.