By Chitra Ragavan
10/16/00

Two Octobers ago, Congress passed a funny little law. It was named after its sponsor, Pennsylvania Republican Joseph McDade, but for the congressman, there was nothing funny about it. The Justice Department had spent eight years investigating McDade on racketeering charges. He was finally acquitted by a jury in 1996, but by then McDade's health and spirits were broken. The McDade bill was his payback to Justice. It simply requires federal prosecutors to comply with state ethics laws. 

No big deal? Not quite. In August, the Oregon Supreme Court forbade all lawyers in the state to lie, or encourage others to lie, cheat, or misrepresent themselves. Under McDade, the ruling now applies to Oregon's federal prosecutors. "We've handcuffed the agents," says senior FBI official David Knowlton, "not the criminals." The U.S. attorney for the Oregon district, Kristine Olson, has informed the FBI and other federal investigative agencies that she cannot OK agents or informants to assume false identities, wear body wires, or engage in undercover activities. "In effect," says David Szady, special agent in charge of the FBI's Portland office, "we now have to go to a drug dealer and say, 'FBI! Would you sell us some drugs, please?' " The FBI, Szady says, has had to suspend 50 investigations, including probes of Internet child pornographers, a Russian organized-crime group, and a massive check-fraud ring. 

Federal prosecutors despise the McDade law. David Margolis, a senior Justice Department official and a veteran organized-crime prosecutor, says McDade has had a major chilling effect. "Even I wouldn't go out on a limb," he says. Justice officials are trying to gut the law before Congress goes out of session this week. The department warned lawmakers in 1998 that prosecutors would be lost in a morass of quirky state ethics laws–especially during complicated multistate investigations. But defense lawyers won the day. "Why should prosecutors be exempt from rules that apply to all other lawyers in that state?" says Mark Holscher, lawyer for former Los Alamos scientist Wen Ho Lee. So far, no court has dismissed a case or excluded evidence on the basis of McDade. "These are crocodile tears," says veteran defense lawyer Irv Nathan. 

Major headache. The biggest headache for prosecutors is the American Bar Association's controversial Model Rule 4.2, adopted by many states. It prohibits prosecutors from contacting people represented by lawyers without first talking to the attorneys. Remember when Kenneth Starr's prosecutors ignored Monica Lewinsky's tearful entreaties to call her lawyer? They got away with it because, since 1989, Justice has defied Rule 4.2. 

No more. Prosecutors now say adhering to 4.2 has hurt white-collar probes, where securing the cooperation of informers is often vital. In an investigation of Alaska Airlines last year, company lawyers barred federal agents from questioning employees. Sen. Patrick Leahy of Vermont says, "The pendulum has swung too far in the other direction." But House Judiciary Committee Chairman Henry Hyde of Illinois says he's not inclined to repeal McDade. "That doesn't mean I'm for crooks," Hyde says. "I'm for ethical behavior both by law enforcement and by defense counsel." Watching the fight from the sidelines is Joe McDade, now 69. "I didn't read about it. I lived it," he says, of prosecutorial zealotry. "The effort is not justice. The effort is to break a citizen."