Apparently the Sarbanes-Oxley Act isn’t just for snagging corporate crooks. It also provided a handy tool for sending to prison a college student who hacked into Sarah Palin’s e-mail account during the 2008 Presidential election.
Yesterday, the 6th Circuit upheld the constitutionality of a lesser-known provision of Sarbanes-Oxley that makes it a crime to destroy records that may be of interest to federal investigators.
As we all know, the passage of Sarbanes-Oxley in 2002 brought volcanic changes to securities regulation and corporate governance. The package of laws passed by Congress as part of Sarbanes-Oxley included an obstruction of justice provision, 18 U.S.C. §1519.
Section 1519 prohibits the knowing destruction or alteration of any record “with the intent to impede, obstruct, or influence the investigation … of any matter within the jurisdiction of any department or agency of the United States … or in relation to or in contemplation of any such matter or case.”
While §1519 may have been aimed at preventing the sort of widespread destruction of evidence that federal investigators encountered in the Enron and Adelphia accounting scandals, it turns out the statute has other uses as well.
David Kernell probably never even heard of Sarbanes-Oxley, let alone §1519, when in the early morning hours of Sept. 16, 2008, he wormed his way into Palin’s e-mail account.
At the time, Kernell was a University of Tennessee student. The son of a Democratic politician, he probably thought it was pretty neat when he posted several pages of Palin’s e-mail on an Internet message board.
But after boasting about his mischief on the Internet, he began to have second thoughts and started to take steps to try to erase from his computer information relating to his hacking of Palin’s e-mail. These actions proved to be the real problem when the FBI caught up with him and he was charged under §1519.
A federal jury convicted Kernell for violating the law by deleting information on his computer relating to the Palin affair.
Monday, the 6th Circuit affirmed Kernell’s conviction, turning aside his argument that §1519 is unconstitutionally vague.
Kernell raised two arguments in his challenge to the statute. First, Kernell contended that the structure of the statute creates an ambiguity as to the application of mens rea to the various elements of the statute.
The court rejected this argument, explaining that “‘the statute does not impose liability for “knowingly … destroy[ing] … any … document … in … contemplation of any [federal] matter,” without an intent to impede, obstruct, or influence a matter.’ By applying this requirement to each of the three scenarios, the construction creates the needed specific intent and avoids Kernell’s concern that ‘the statute would forbid innocent conduct such as routine destruction of documents that a person consciously and in good faith determines are irrelevant to a foreseeable federal matter.’”
Kernell also argued that §1519’s requirement that the defendant act “in contemplation of an investigation” is vague.
But the 6th Circuit observed that other courts “have consistently held that the belief that a federal investigation directed at the defendant’s conduct might begin at some point in the future satisfies the ‘in contemplation’ prong.”
The 6th Circuit conceded that “this interpretation makes ‘in contemplation’ under §1519 very broad,” but also observed that “it is consistent with the legislative history and other cases to consider the question.”
Moreover, the court concluded that the statute could not be said to be vague as applied in Kernell’s case because the hacker had posted an Internet message revealing his concern that his actions could trigger a federal investigation.
“Thus there is no doubt from this post that Kernell ‘contemplat[ed]’ that an investigation would occur when he took his action, since he specifically referenced the possibility of an FBI investigation in his post,” the court said. “As such, to the extent there are any ambiguities in the ‘contemplation’ prong, Kernell may not raise or rely on them.” (U.S. v. Kernell)
So Kernell’s conviction stands. According to Reuters, the hacker was released in November after serving less than eleven months of his one-year sentence, so he’s already paid his debt to society.
But Kernell’s misadventures do serve notice that Sarbanes-Oxley has some bite outside of Wall Street and the boardrooms of Fortune 500 companies.
– Pat Murphy