The Acquittal of Army Col. Robert Morris and the Debate Over the Hyde Amendment

In 1999, United States Army Colonel Robert Morris, then a Lieutenant Colonel, was targeted by the State Department and the Department of Justice over his charitable non-profit organization, Partners International, as Tod Robberson of the Dallas Morning News informed readers in a Monday editorial. At the time, according to Robberson, Federal investigators were investigating whether alleged charitable organizations participating in a program under which the organizations could obtain supplies from decomissioned military bases were, in turn, illegally selling the supplies for profit. According to Colonel Morris' impressive biography, Partners International's projects "included support to an eye clinic in Zimbabwe, providing medical supplies to a women and children’s hospital in Grenada, Human Rights training for international military officers, and support to homeless shelters, battered women’s shelters, Native American programs and the disabled."

Proving that no good deed goes unpunished, as Robberson writes, Colonel Morris was subsequently indicted in the Northern District of Texas, despite a two year investigation by the Army which concluded that Colonel Morris had not engaged in any wrongdoing. The government moved the case to Georgia, where the jury acquitted Colonel Morris following trial after deliberating for only 45 minutes.

Unfortunately, Colonel Morris accumulated close to $300,000 in legal and other expenses as a result of the investigation and prosecution. His elderly parents cashed in their insurance policies and took additional mortgages on their home to help fund his defense. Colonel Morris would not have been able to afford his defense at all if former presidential candidate and president of EDS H. Ross Perot had not donated to his defense. Colonel Morris happily received a promotion to full Colonel from the Army following his acquittal, but his ordeal later caused him to retire and to end a model career which could have led to his promotion to Brigadier General.

Robberson laments the very lamentable fact that Colonel Morris has not received a dime to compensate him for the exhorbitant and ruinous expenses caused by the government's ill-conceived prosecution, and cites a USA Today article discussing Colonel Morris' travails and the Hyde Amendment, an act designed with the intent to award wrongfully prosecuted and exonerated defendants their attorney's fees and legal expenses. As the article notes, the Hyde Amendment, while well-intentioned, is practically toothless, since the standards for granting relief are exceptionally high. It notes the infrequency of Hyde Amendment awards since the Amendment was passed in 1997.

Mark Cuban Continues to Pursue SEC for Bad Faith in Insider Trading Investigation

Today's Wall Street Journal Law Blog reveals that Dallas Mavericks owner, Landmark Theaters owner and Chairman of HDNet Mark Cuban has gone on the offensive against the Securities and Exchange Commission. The SEC made widely publicized charges against Mr. Cuban for insider trading in selling shares of Mamma.com, an internet search technology company now known as Copernic, in 2008. Mr. Cuban disputed the charges, and a federal court dismissed the charges last year.

Not satisfied, Mr. Cuban demanded evidence regarding whether the SEC had acted in in bad faith in bringing the charges, and the SEC provided documents to his counsel. Now Mr. Cuban is attempting to force the SEC to turn over still more documents. If the court holds that the SEC acted in bad faith, it could impose sanctions and force the Commission to pay Mr. Cuban's legal fees.

Christopher Aguilar, former general counsel for a broker-dealer who did work for Mamma.com, has submitted an affidavit stating that Julie Riewe, an SEC attorney, informed him in August 2007 that she would prefer if employees of the broker-dealer did not speak to Mr. Cuban's attorneys, although Mr. Aguilar "could do what he wanted." Mr. Aguilar stated that he believed that the statement was an attempt to not make a witness available to the subject or target of an SEC investigation. Mr. Aguilar eventually allowed Mr. Cuban's counsel to speak with the employee.