US Presidency: Ukraine scandal triggers impeachment inquiry
MICHAEL GOLDHABER, IBA US CORRESPONDENT
Throughout the Mueller investigation, Democratic leaders resisted calls for impeachment of President Trump. Then the President’s Ukraine scandal emerged. By mid-October, 228 of 235 Democrats in the United States House of Representatives endorsed the impeachment inquiry launched by Speaker Nancy Pelosi on 25 September.
Professor Frank Bowman, author of High Crimes and Misdemeanors: A History of Impeachment for the Age of Trump, agrees with Congressional Democrats that pressing Ukraine to investigate his rival Joe Biden’s son is by far the most impeachable thing President Trump has done.
‘The President of the US leveraged his authority over military and diplomatic affairs to pressure a foreign state to provide dirt for his personal political use,’ says Bowman. ‘That’s pretty easy to understand.’ In particular, it’s easier to understand than unsuccessfully obstructing a controversial indeterminate investigation into some murky coordination with Russia by his pre-Presidential advisers. ‘There’s no question that obstruction was legally impeachable,’ Bowman argues, ‘but politically it couldn’t get traction.’ And in contrast to the underlying Russia conspiracy, the Ukraine scandal doesn’t require a contestable statutory determination. Rather than to invite hair-splitting under election or corruption law, Bowman urges Congress to invoke a broad historic principle: abuse of power.
‘Abuse of power means using legitimate authority for an illegitimate purpose,’ says Bowman. ‘Trump is the commander-in-chief and the chief diplomat – and he used both baskets of authority to extort a personal political favour. That’s abuse of power plain and simple.’ What’s even worse, says Bowman, the President sought a political favour from a national rival – exactly the sort of conduct the ‘founding fathers’ feared.
The precise favours the President sought from Ukraine strike David J Kramer as ironic at many levels. Kramer served under George W Bush as both Assistant Secretary of State for Democracy, and Deputy Assistant Secretary for European and Eurasian Affairs, responsible for Russia and Ukraine, among others.
Most controversially, President Trump pushed Ukraine to probe the claim that Joe Biden engineered the 2014 firing of Prosecutor-General Viktor Shokin because Shokin was supposedly pursuing corruption at a company where Hunter Biden served on the board. (Per the call transcript: ‘I heard you had a prosecutor who was very good and he was shut down… There’s a lot of talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that.’)
“How can we promote the rule of law when our President asks their President to meet with his personal lawyer and the Attorney General as if there’s no distinction between the two?
David Kramer
Assistant Secretary of State for Democracy; Deputy Assistant Secretary for European and Eurasian Affairs under President George W Bush
In reality, the entire Western establishment called for Shokin’s removal exactly because he was too lax on corruption. Kramer called for Shokin’s ouster as then-President of the nonprofit Freedom House. ‘Shokin was bad news absolutely,’ he recalls. ‘It wasn’t just Americans who had this position. It was the IMF, the Europeans, across the board.’
The President also pushed for a probe of the dizzying claims that Ukrainians triggered Robert Mueller’s ‘witch hunt’ of the Trump campaign by falsely accusing Trump campaign manager Paul Manafort of corruption; and that the forensic investigators at a supposedly Ukrainian firm called CrowdStrike framed Russia for the 2016 email hack of the Democratic National Committee. In the President’s words: ‘I would like you to find out what happened with this whole situation with Ukraine, they say CrowdStrike... I guess you have one of your wealthy people... The server, they say Ukraine has it… [T]hat whole [Mueller] nonsense… they say a lot of it started with Ukraine.’
The CrowdStrike tale has been traced back to the Russian military intelligence hacking avatar Guccifer 2.0. In reality, CrowdStrike is a Silicon Valley firm whose co-founder emigrated from Russia at age 13, and whose findings were ratified with high confidence by all 17 US intelligence agencies.
As for Manafort, after a US jury found him guilty of bank fraud, he fully admitted to avoiding taxes on $13m in secret payments and secretly lobbying on behalf of the Ukrainian President, who looted tens of billions and violently suppressed democracy before fleeing to Russia in 2014. Echoing Manafort’s defence, Trump lawyer Rudy Giuliani accuses the anti-corruption campaigner Serhiy Leshchenko of fabricating the ledger documenting secret payments to Manafort (and setting the Mueller probe in motion) out of enmity to Trump and America. Kramer retorts: ‘I know Leshchenko and saw him soon after. He was outraged and alarmed that Manafort was paid with Ukrainian money by an incredibly corrupt pro-Russian leader who has blood on his hands. That’s why he disclosed the secret ledger.’
One lesson of the Manafort trial is that a nation controlled by oligarchs is attractive to kleptocrats of every nationality. As Mark Hays of Global Witness put it: when the boundary between the public and private sector erodes, individuals can ‘exploit the infrastructure of state and set it up as a looting mechanism.’
Hunter Biden may have broken no laws (and if he did, Joe Biden’s actions would only have placed him at greater risk), but there’s no explanation for Hunter’s lucrative board seat except that his company, Burisma, craved political influence. Burisma’s co-founder is accused of awarding himself oil and gas licences when he served as Minister of Ecology and Natural Resources under Manafort’s favourite Ukrainian President. But the US can hardly preach probity given, for example, the report that President Trump’s own Energy Secretary, Rick Perry, tried to place two Republican Texan donors on the three-man board of Ukraine gas champion Naftogaz.
‘We were trying to advise Ukrainians to root out corruption,’ says Kramer. ‘We aren’t helping them by intermingling government business with private business, or by engaging in and facilitating corrupt activities.’
Seoul 2019 – Annual Conference highlights online
A number of speeches and interviews from the IBA Annual Conference 2019, which took place in Seoul, South Korea, between 22–27 September, are now available to watch on the IBA website.
The coverage includes conversations with Thae Yong-ho, a representative of Let’s Go Together – a forum for the reunification of North and South Korea; O-Gon Kwon, an attorney-at-law at Kim & Chang, who serves as the President of the firm’s International Law Institute and is formerly a permanent judge of the International Criminal Tribunal for the former Yugoslavia; and Hyeonseo Lee, a North Korean defector and author of The Girl with Seven Names – A North Korean Defector’s Story.
Also featured are speeches given at the Opening Ceremony by President Moon Jae-in of South Korea; Ban Ki-moon, the former Secretary-General of the UN; Song Sang-hyun, the former President of the International Criminal Court; Park Won-soon, the Mayor of Seoul; and IBA President Horacio Bernardes Neto.
Read further coverage of events in Seoul in this issue. View the films at tinyurl.com/SeoulFilms
Women ‘rainmakers’ share career experiences in IBA webinar
The IBA Law Firm Management Committee presented a webinar entitled ‘Women Making it Rain: advice from great women rainmakers, across the globe’ on 29 October 2019.
The webinar featured six women panellists, representing different parts of the world. During the webinar, each panellist explained how they have become great business developers, and what other lawyers can learn from these experiences.
The panel shared their road to success, the techniques they find most effective when cultivating their practices and their insight into how law firms are training the next generation of lawyers in business development. They also offered advice to young women just beginning their careers in law.
The panellists were: Deborah Farone, a strategic marketing consultant and author of Best Practices in Law Firm Business Development and Marketing, who moderated the webinar; Christina Blacklaws, a solicitor and consultant, and Immediate Past President of the Law Society of England and Wales; Lynell Tuffery Huria, Principal at AJ Park; Deanna L Kirkpatrick, a partner at Davis Polk; Annalisa Reale, a partner at Chiomenti, Italy; and Natalie Yeung, a partner at Slaughter and May, Hong Kong.
The webinar is available to watch at tinyurl.com/RainWebinar
IBA and United Nations Food and Agriculture Organization sign Letter of Agreement
The IBA Agricultural Law Section (ALS) and the United Nations Food and Agriculture Organization (FAO) have built a strong relationship over the past few years, collaborating on topics of mutual interest. Following successful joint sessions at the IBA Annual Conferences in Sydney (2017) and Rome (2018), the two bodies signed a Letter of Agreement at the IBA Annual Conference in Seoul on 24 September, formalising and strengthening this collaboration.
ALS looks forward to working with the FAO on activities such as legal research and capacity development projects aimed at strengthening developing countries’ and their legal professionals’ knowledge and capacities in areas including food security and nutrition, rural poverty eradication, sustainable agriculture production, climate change mitigation and adaptation, and conservation and sustainable utilisation of natural resources. Through its Development Law service, the FAO will actively contribute to the activities of the ALS, although it may not be a formal member, given its neutral and impartial status. The IBA will be invited to participate as an observer at the FAO Committee on World Food Security and other important FAO Governing Body sessions.
To view the Letter of Agreement, visit tinyurl.com/IBA-FAO-Agreement
IBA Securities Law Committee survey on EU Shareholder Rights Directive
The IBA Securities Law Committee, together with law firms from the 28 European Union Member States, has conducted a survey to compare Member States’ national implementation measures relating to the European Shareholder Rights Directive II (SRD II)(EU 2017/828).
The SRD II is an example of a trend that began in the wake of the financial crisis and which involves an increased focus across jurisdictions on strengthening the corporate governance of listed companies, even if local practices and self-regulation persist. The SRD II aims to bolster the position of shareholders and ensure that decision-making is in line with the long-term goals and stability of a company.
The original directive came into effect in 2007, with the objective of improving corporate governance in companies with registered offices in an EU Member State and the shares of which are traded on one or more of the EU’s regulated markets.
The survey was prepared on the initiative of Rikke Schiøtt Petersen, of Gorrissen Federspiel, Denmark, and Tom Fagernäs, of Krogerus, Finland, and was delivered to representatives of all EU Member States. As of 10 September 2019, however, five EU Member States had yet to implement the Directive, and thus the survey results only feature 23 jurisdictions.
The survey was split into five sections, covering topics such as remuneration policies, the facilitation of the exercise of shareholder rights and material transactions between the company and related parties.
With the SRD II being a minimum harmonisation directive, Member States have also been able to impose stricter requirements than the minimum provided for by the Directive. This means that in some jurisdictions the impact of the Directive may be more limited than in others.
Survey results are available at tinyurl.com/SRDIISurvey
Seoul sessions: now available to watch
Footage from several Showcase and Rule of Law Symposium sessions held at the IBA Annual Conference 2019 can now be viewed on the IBA website.
These include the global Rule of Law Symposium on threats to the independence of the legal profession, the rule of law and access to justice. This session brought together a panel of leading lawyers representing organisations that defend the human rights of persecuted members of the legal profession and which work to support its independence and the rule of law.
Other highlights include footage from the IBA Showcase Session entitled ‘Open for business? Lessons in opening legal markets from around the world’. This session considered the key questions that arise both before and after foreign law firms are permitted to establish a presence in a newly open jurisdiction.
Read further coverage of events in Seoul in this issue. View the films at: tinyurl.com/SeoulFilms
IBA GEI Annual Report highlights labour market challenges and diversity issues
The IBA Global Employment Institute has published its Eighth Annual Global Report: National regulatory trends in human resources law. The report notes that labour market challenges and diversity issues are key concerns, with a number of countries also attempting to manage greater demand for flexibility and alternative work arrangements.
Based on research collected from lawyers in 50 countries, the report delves into the most pertinent labour and human resources issues faced by global multinational companies during 2018 and the beginning of 2019.
The report concludes that factors such as talent migration and a lack of educational programmes and training have led to the majority of countries surveyed reporting a shortage of highly skilled workers. As a result, a large number of countries are now taking action to mitigate the problem, such as by facilitating the issuance of work visas and permits for skilled workers and by attempting to reduce talent migration.
Regarding diversity, the research found greater mention of rules aiming to increase employment opportunities for individuals with disabilities, with certain countries imposing percentage quotas for the employment of such individuals. It found that gender disparities continue to be a concern for many countries, some of which have focused on increasing the representation of women on corporate boards, but with limited success.
Other pressing issues identified by the report include corruption and whistleblowing, stress and mental health, discrimination, technology and artificial intelligence. Specific hot topics include privacy as it relates to social media, and the adoption of laws to govern the collective bargaining process.
The report can be found online at tinyurl.com/IBA-GEI-eighth-annual-report
Gig economy: governments legislate to disrupt the disruptors
LUCY TREVELYAN
In September, Gavin Newsom, California’s Governor, signed into law Assembly Bill 5 (AB 5), which will reclassify two million contractors as ‘employees’ under state labour laws.
California’s move has been viewed as disrupting the rise of the gig economy and other US states are likely to follow suit, as governments endeavour to implement laws to offer workers greater legal protection.
AB 5 both codifies and expands upon the California Supreme Court’s ruling in the 2018 Dynamex case. Specifically, it applies the ‘ABC test’, found in Dynamex to be an appropriate standard to determine under state wage and hour law whether a worker is an employee or a contractor. The test includes three specific conditions that a worker must meet to be classified as a contractor rather than an employee.
Philip M Berkowitz is Co-Chair of the IBA Diversity and Equality Law Committee. The ABC test is ‘far narrower than what has been the traditional standard for employee-independent contractor classification,’ he says ‘and will result in vastly more workers being “employees”.’
In the US, Berkowitz says, the issue of the protection of workers who provide ‘gig economy’ services is very much in turmoil. ‘There is concern that the increasing importance of the contingent workforce is placing extraordinary stress on already strained social programmes which are normally funded by payroll taxes,’ he says. ‘With federal inaction on the issues, we see various states passing laws that would attempt either to preserve or create employee status for those individuals.’
There is, however, an inherent conflict between the societal interest in protecting gig economy workers by legally classifying them as employees who deserve the protection of employee status, when many of these workers would expressly reject this status, and prefer to see themselves as independents or freelancers.
‘The concern is some of these individuals may be exploited; that they will fall into a nether land, considered neither fish nor fowl, and, by missing out on the statutory protections and benefits enjoyed by employees, may ultimately become a societal burden if their business model fails,’ says Berkowitz.
For companies, complying with laws like AB 5 may be costly and disruptive. ‘Companies will need to determine whether they must reclassify workers as employees and determine the cost of doing so,’ he explains. ‘These costs may include hourly rates, benefits and increased payroll costs for workers’ compensation and unemployment insurance.’
Governments are looking to implement laws that offer workers greater legal protection
In the United Kingdom, the government has signalled its intent to legislate to clarify employment status tests. Proposals include providing workers with a right to reasonable notice of work schedules and compensation for shifts cancelled without reasonable notice.
A Watford employment tribunal has meanwhile asked the Court of Justice of the European Union (CJEU) to clarify whether a contractual right to substitute means an individual cannot be classed as a ‘worker’. The case, B v Yodel Delivery Network, has been brought by a Yodel courier under the Working Time Regulations 1998.
Rather than UK law keeping pace with the emergence of the gig economy, the gig economy has in fact been conceived and thrived in regulatory gaps, says Claire Scott, a legal director at Pinsent Masons. ‘However, there is an increasing judicial recognition that those engaged in the gig economy may be workers with associated rights, such as those under working time and national minimum wage legislation.’
Indeed, in the 2018 Pimlico Plumbers case, the UK Supreme Court unanimously ruled that engineer Gary Smith was indeed a worker and not self-employed. ‘This decision was specific to the facts of the case and it did not “change the law”, but applied old law to new circumstances,’ says Scott. ‘Its impact was perhaps to encourage others to challenge their status in the court. Appeals in relation to the status of Uber workers and Addison Lee drivers are awaited.’
Given the UK courts have been ready and willing to apply worker status to gig economy workers, it would be surprising if the CJEU changed this judicial direction when it rules on the B v Yodel Delivery Network case, adds Scott.
The UK government, says Laura Morrison, a senior practice development lawyer in Dentons’ UK employment team, has agreed that the existing separate tests for employment law purposes and tax purposes are unhelpful.
‘Under employment law, an individual can be employed, self-employed or a worker,’ Morrison explains. ‘Tax law does not recognise the intermediate “worker” status. The courts have long applied a wide-ranging test taking account of many aspects of these relationships because no simple test works. It therefore seems unlikely a simple test can now be legislated without introducing new very arbitrary distinctions.’
All these new laws may provide some stability in a rapidly developing area, and set ground rules and expectations for all sides, Berkowitz says. On the other hand, he adds, ‘laws like AB 5 may provide stopgaps but are unlikely to fully address the challenges posed by a technology-induced displacement of employees, only one part of which represents the gig economy.’