Hearing of the Senate Judiciary Committee - Nomination

Statement

Chaired By: Senator Charles Schumer (D-NY)

Witnesses: Gerard E. Lynch, to be United States Circuit Court Judge for the Second District; Mary L. Smith, to be Assistant Attorney General, Tax Division, Department of Justice

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SEN. CHARLES E. SCHUMER (D-NY): The hearing will come to order and I want to welcome Judge Lynch and Ms. Smith and your families as well, who I see here. You look like families, anyway, which just means you're very nice looking and proud. Anyway, first Judge Lynch, Judge Lynch, I couldn't be more pleased to have a second opportunity to honor your hard work and service to the law, all the more so because your story begins in your hometown of Brooklyn, which is my hometown, too.

Judge Lynch, who currently sits as the U.S. district judge in the southern district of New York comes to us for confirmation to the Second Circuit, much as he did in 2000 for his first confirmation with an unimpeachable record of moderation, consistency, intelligence and dedication to exploring all facets of complex legal questions. In his nine years on the bench, he has issued nearly 800 opinions, tried nearly 90 cases to verdict and has been overturned by the Second Circuit only 12 times, and one of those times, I might add, the Second Circuit was in turn reversed by the United States Supreme Court.

There shouldn't be any doubt that Judge Lynch is not an ideologue. His opinions and writings show moderation and thoughtfulness. He's pragmatic. His peers and those who practice before him have found him to be both probing and courteous, and some, very judicial in his temperament. In response to questions before the Senate Judiciary Committee in 2000, Judge Lynch said: "a judge who comes to the bench with" - and I would like my colleague to particularly hear these lines -- (laughter) -- "a judge who comes" - that's not you, Amy --

SEN. AMY KLOBUCHAR (D-MN): Oh, okay. (Laughter.) Thank you very much for clarifying that for the record.

SEN. SCHUMER: "A judge who comes to the bench with an agenda or a set of social problems he or she would like to solve, is in the wrong business" unquote.

SEN. JEFF SESSIONS (R-AL): Amen. (Laughter.)

SEN. SCHUMER: Let the record show, Senator Sessions noted his assent to that sentiment. I couldn't agree more and I expect and hope that my colleagues on the committee feel the same way. As I've said many times, my criteria for selecting good judges are three: excellence, legal excellence, no political hacks, moderation, I don't like judges too far right, as Jeff knows, but I also don't like judges too far left, and diversity. I try to put as many women and people of color on the bench as I can. There is no question that Judge Lynch meets the standard of excellence. He was first in his class at, he was first in both classes at Columbia College and Law School.

I hope he had a good time while he was there. (Laughter.) His opinions are scholarly - I mean, I figure if you're first in your class for one, you deserve to have a good time at the other, but he was first in his class for both - and one that was overturned by the Second Circuit was lauded by the panel as quote "a valiant effort by a conscientious district judge". There is no question Judge Lynch is, in fact, a moderate. His impressively low reversal rates should give the lie to any argument he's outside the legal mainstream. I might not here, too, that three of those 12 reversals came in cases in which he had ruled for the government and against plaintiffs who had alleged various forms of government misconduct.

Now, the rap on Judge Lynch in 2000, among the 36 who voted against him, was that he would be quote "an activist." The view arose from an out of context outtake from two law review articles. I will repeat now what I said then. In both of these articles, then professor Lynch expressed the moderate view that the Constitution cannot, as a practical matter, remain frozen in the 18th century, the Constitution should not be expanded, but it must be interpreted. To illustrate my point about why Judge Lynch should be accepted as a paragon of moderation, I want to read you two quotes.

First, quote, "text is the definitive expression of what was legislated," unquote. Second, "a text should not be construed strictly and should not be construed leniently. It should be construed reasonably to contain all that it fairly means." The second quote was written by, Associate Justice Antonin Scalia. The first quote, sounding almost the same, was from Judge Lynch. At the end of the day we could revisit old arguments about Judge Lynch's previous writings, but we don't have to. There's no reason to take snippets of what he has written in the course of a long and august career and try to read them like a sidewalk psychic reads palms.

Instead, let's look at his copious opinions and rulings. He's been the definition of law enforcing and justice seeking. He has ruled for the state against prisoners, but he's also ruled the state must protect due process rights of those it seeks to detain. He has sentenced defendants convicted of horrible crimes to life without parole, and he's also expressed concerns when he thinks a sentence might be too long, while imposing the sentence in complete accordance with the law. He has issued complex and scholarly opinions in securities and antitrust cases.

We've covered excellence and moderation. Let me say a word now about diversity. Judge Lynch obviously is not a nominee who fits this bill. There's no way to get around that. But I want to note another kind of diversity that I believe deserves mention. Before he went on the bench, Judge Lynch sought out opportunities to be more than a smart professor living in an ivory tower. He spent a total of five years in the U.S. Attorney's Office in the southern district of New York as Chief of the Appellate Section and Chief of the Criminal Division. He worked as counsel to a prominent law firm and he took on numerous pro bono cases.

In short, he lived the life of a real lawyer while teaching and writing. And driven by his own conscience, he even registered for the draft during Vietnam War rather than seek a college deferment. That speaks lots, doesn't it? I salute you for that, judge. This is someone who has sought out a diversity of experiences which he now brings to the table as a judge. I look forward to this new chapter in Judge Lynch's service to our country. I also look forward to Ms. Smith's continued service at the Department of Justice. Mary L. Smith is the president's nominee to be Assistant Attorney General for the Tax Division at the Department of Justice.

Ms. Smith, you have an impressive and distinguished career. And we're happy to welcome you back to public service. As you know, the Bush administration's management of the Justice Department was abysmal, in my opinion.

I'm particularly pleased to see a nominee with your background of professionalism and excellence to help get DOJ back on its feet. Although the Tax Division was not denuded by the previous administration in the same way some of the other divisions were, it remains vital that all members of the Justice Department leadership be committed to the ideals that the Department of Justice has embodied for so much of its history.

I'm confident you'll help the president and the Attorney General in their mission to restore integrity and reputation at the department. With that I yield to our, and I want to congratulate him publicly - is it official yet?

SEN. SESSIONS: Sort of, yeah.

SEN. SCHUMER: It is official. It was first sort of official but then became official. I want to congratulate Jeff Sessions on his ascension to be the ranking member of the Judiciary Committee. As I've said publicly to the press, Jeff and I don't agree on a whole lot of issues, but he's a straight shooter, he tells you what he thinks, and you can sit down and come to agreements and compromises with him even when you're far apart on the issues. So I think he'll be a proud addition as ranking minority to the Judiciary Committee. And now I call on Senator Sessions for a statement.

SEN. SESSIONS: Thank you, Mister Chairman, it's great to be with you and I'd like to welcome both our nominees today and, Judge Lynch, I really enjoyed our conversation yesterday. It was a, you're a man of judgment and integrity and good brain power and insight and I appreciated that opportunity. I know Senator Schumer was a big defender of yours last time. He had a lot of confidence in your ability. I made a speech that I thought was pretty persuasive and he followed me and almost convinced me after. You did a good job with that debate. So, I did vote against you at that time.

SEN. SCHUMER: I had shown up evidently. (Laughter.)

SEN. SESSIONS: And a number of other senators did, but it's a lifetime appointment that you're seeking to the Federal Appellate Court and I think the Senate's obligation is very real and has to examine the nominee carefully and it shouldn't be taken lightly. The people of the country have only one opportunity to decide whether an individual is worthy of this high office and that's this one, and so we have to fulfill our duty and answer, we'll ask you to answer certain questions such as, as a nominee, do you understand that your role as a judge is to follow the law regardless of personal feelings and preferences? Does he or she understand the role of precedent? Can the nominee put aside political views which may be appropriate as a legislator, executive or ever professor, but interpret that law as written and will the nominee keep his or her oath to uphold the Constitution first and foremost?

As to legal skill and personal integrity, and ability to decide cases, I think your record is good. And I certainly respect that. In 2000 when you were first nominated to the district judgeship, I expressed concern that you might harbor activist tendencies and legislate from the bench. As a result, I think 35 members joined me in opposing that confirmation. I still have some concerns, that , on your record, while on the bench, especially when considered in conjunction with some of your written remarks in the past criticizing the textualist approach to constitutional interpretation.

Some of your rulings and statements have reminded me of my concerns nine years ago about willingness to bound by the law in Constitution. One of my concerns relates to Judge Lynch's handling of the (Pavon Cruz ?) case where a defendant accused of distributing hundreds of images of graphic child pornography faced a possible 10 year minimum sentence. Judge Lynch did not approve of this sentence, said so, but it prescribed by the law. He said, quote "Pavon is a young and sympathetic defendant who faces a draconian penalty for his offences". He then sought to inform the jury that the defendant faced a mandatory 10 year sentence which would enabled the jury to nullify Congress' policy judgment on the appropriate prison term for this kind of sentence and would be contrary to the federal law that defendants are (sic), the juries aren't told about what the sentences will be.

So I'm concerned that those feelings might have led you to go beyond the normal legal requirements that a judge has. And I don't want to, and I'm not going to evaluate Judge Lynch, however, on this one case. To his credit, he gave the prosecution an opportunity, openly, to appeal the decision to the Second Circuit, which did reverse his decision. But I am concerned about this case because it does appear that feelings may have trumped the text of the law and the will of Congress. Given the small number of cases that the Supreme Court accepts for review each term, our appellate courts are often the court of last resort for litigants.

So I come to this with an open mind and would cite in addition to Senator Schumer's compliments a very nice letter I received today from Mayor Jill (ph) White, former United States Attorney in Manhattan and she is strongly of the view that you are an excellent nominee and would be an excellent judge and I am impressed that you had experience as a prosecutor as well as a defense lawyer. So, so, I look forward to looking at that see where we go from here. Some of the judges, probably less than five percent or so that I opposed that President Clinton nominated, some of those I opposed, I was proven right, in my view, some of which I'm not so sure. And judge, I think you're in that, that category.

So I'd also like to thank Ms. Smith for being here today. She is nominated to head the Tax Division. She comes before the committee with an extensive resume, but one that appears to be lacking in substantive tax experience and criminal law experience so I have some concerns in this regard given the volume and complexity of the matters handled by the tax division and we look forward to exploring that. Thank you, Mister Chairman.

SEN. SCHUMER: Thank you. And Senator Klobuchar has graciously agreed to make her opening statement when she has questions and so we'll give her a little more time. So now I'd like to call on my colleague from New York, Senator Kirsten Gillibrand who's doing a great job here in the Senate. Senator Gillibrand.

SEN. KIRSTEN GILLIBRAND (D-NY): Thank you, Senator Schumer and thank you -- (off mike) -- I appreciate you holding this hearing and the opportunity to introduce Judge Gerard Lynch today. I'm pleased to be able to speak in support of one of New York's finest jurists. President Obama has chosen one of the country's outstanding legal minds with his nomination of Gerard Lynch to the United States Court of Appeals, the Second Circuit. I had the great privilege of being a clerk on the Second Circuit for the Honorable Roger J. Miner and who is now serving senior status, so, I hope that if indeed, Judge Lynch is confirmed, that he will get to serve with him.

Gerard Lynch is an accomplished and distinguished jurist whose experience and erudition make him an excellent nominee for the United States Court of Appeals, the Second Circuit. His distinguished biography is a study in excellence. A commitment to learning, a commitment to the law, and the actualization of some of the highest ideals of our country. Judge Lynch grew up in a working class neighborhood of Brooklyn. The son of an airline mechanic and a homemaker, Judge Lynch was the first in his family to attend college. After graduating first in his class from Regis High School, he received his BA from Columbia in 1972 where he was valedictorian. He received his J.D. from Columbia in 1975 and again graduated first in his class.

Following law school, he clerked for Judge Wilfred Feinberg of the U.S. Court of Appeals to the Second Circuit from 1975 to '76 and for Justice William Brennan on the U.S. Supreme Court from 1976 to '77. Justice Brennan, as you know, the second longest serving justice on the Supreme Court, is also considered one of the great men and jurists of our time. His decisions have largely stood the test of time and continue to have a direct effect on our daily lives. His decisions stood for the rights of the individual against the immense power of the state.

Judge Lynch, in his own life, dedicated much of his life to the same goal in a variety of positions in which he served including Assistant U.S. Attorney to the Southern District of New York, Special Counsel for the New York Special Commission to Investigate City Contracts, Chief Counsel for the New York Commission on Integrity, Government Integrity, Associate Counsel for the Iran Contra Independent Counsel, Chief of the Criminal Division for the Southern District of New York, U.S. Attorney's Office, and Special Counsel for the Office of Independent Counsel. In all of these positions, his responsibilities were grounded in the concepts of integrity, transparency and accountability and an enduring dedication to the rule of law.

The importance of educating young students in the law is also of great importance to Judge Lynch.

As a legal scholar and an educator, he spent nine years on the faculty at Columbia Law School becoming full professor after only nine years and was awarded an endowed chair in 1996. An expert in both criminal law and procedure, Judge Lynch is the author of significant legal articles on the subject of purpose, structure, function, advantages and disadvantages of the RICO statutes. Judge Lynch has served on the United States District Court for the Southern District of New York for the last nine years and has earned the reputation for fairness and toughness.

The strength of his logic and grounding in law is witnessed by the fact that he has tried over 90 cases to a verdict and rarely has been reversed by the Second Circuit. Judge Lynch is held in extremely high regard by his peers and is widely viewed as one of New York's finest jurists. Leading members of the New York legal community testified to his brilliance, his fairness, his commitment and his preparation. I enthusiastically support Judge Lynch's nomination because of his character, integrity, and intellect. We are so fortunate that we have a jurist such as Judge Lynch serving the public good in our legal system. Thank you, Mister Chairman.

SEN. SCHUMER: Well, thank you Senator Gillibrand for an excellent statement, typically, and thank you for being here.

SEN. GILLIBRAND: You're welcome.

SEN. SCHUMER: Okay, I think we're now ready to, let me, I did not give a long introduction of Mary Smith, so let me just fill in our membership about her background as well. Mary Smith is a native of Illinois. She graduated from honors from the University of Chicago Law School. She clerked also as a circuit court clerk on the Eleventh Circuit. If confirmed, she's going to bring to the Justice Department a record of excellence and professionalism as well as her unique perspective as a women and a Native American. Ms. Smith has an impressive and distinguished legal career over 18 years with substantial experience in the public and private sectors.

From 2000, from 1994 to 2001, she served with distinction in various government positions: Department of Justice, Associate Director of Policy Planning for the White House Domestic Policy Counsel, and Associate Counsel in the White House Counsel's Office. She was the highest ranking Native American in the White House during the Clinton administration. She dedicated herself to the improvement of the legal profession holding leadership positions with various national and state bar associations. Her nomination has been greeted enthusiastically by the legal community and there's a long list of enthusiastic greeters and I want to thank Ms. Smith for coming here and her willingness to serve. I also would ask unanimous consent that the statement of her senator, Senator Durbin, my friend and colleague, be submitted for the record without objection.

And now, let me call both our nominees to the witness stand here. I guess we'll call it that. And please remain standing as I administer the oath of office. Okay, will you both stand and be sworn. Okay, do you affirm that the testimony you are about to give before the committee will be - please raise your right hand. They didn't put that here but let's do it. Do you affirm that the testimony you're about to give before the committee will be the truth, the whole truth and nothing but the truth, so help you God?

HON. GERARD E. LYNCH: I do.

MS. MARY L. SMITH: I do.

SEN. SCHUMER: Thank you, you may be seated. Okay, now we're going to first, I'm going to call on Judge Lynch, please introduce your family, tell us who they are. It's always nice to see families here. Then, make your, if you have some brief remarks, you may make them, then we'll call on Mary Smith doing the same, and then we'll go to questions. So, Judge Smith (sic), Judge Lynch, you're on.

HON. LYNCH: Thank you, Mister Chairman. Thank you, Mister Chairman. I want to introduce my family who is here with me today. My wife of 37 years, Doctor Karen Marisac (ph) who's a clinical psychologist. And with me also is the apple of my eye, my son Christopher who is graduating from law school in two weeks.

SEN. SCHUMER: Ah.

HON. LYNCH: And with me and with him is his fiancée, Miss Katie Wilson who starts a PhD program in economics next year. So I'm very grateful to them for being here. I have no real opening statement other than to thank the president for the great honor that he has done to me in nominating me for this position. To thank you, Senator Schumer and Senator Gillibrand for the, the very kind remarks that you made, to thank the other senators for being here and particularly to thank Senator Sessions for his courtesy to me and meeting with me yesterday as he referred to. But other than that, I just am prepared to answer any questions that anyone has.

SEN. SCHUMER: Thank you, Judge Lynch. Ms. Smith.

MS. SMITH: Thank you, Mister Chairman. It's a great honor to be before this committee as the president's nominee to be the Assistant Attorney General for the Tax Division at the Department of Justice. I hold the Tax Division and the Department of Justice in the highest regard. Early in my career, I served as a career trial attorney in the Civil Division at the Department of Justice and I have the highest degree of respect for all the career public servants knowing firsthand how hard they work and how dedicated they are.

The tax division is one of the premier litigating divisions in the Department of Justice and has enjoyed a long tradition of excellence since its inception by President Roosevelt. If I am so fortunate to have my nomination recommended by this committee and confirmed by the Senate, I can assure you that I will devote my full abilities to continue the Tax Division's long tradition of excellence. I'm very fortunate today to be joined here by both friends and family from both Chicago and DC. My mother, Caroline Smith along with her good friend Carole Ruddy (ph) flew here from Chicago to be here today and from DC I have my good friend Debbie Premislaw (ph) along with her three daughters, Yashota (ph), Sumita (ph) and Lakshmi (ph). Also my good friend Nancy Gist (ph) and Eric Baron (ph) are here as well as several members of the Tax Division who I hope I will be fortunate to serve with.

SEN. SCHUMER: Thank you, Ms. Smith, and we welcome all of your family and friends, and particularly your mom. Great to see you and I'm sure you're very, very proud of your daughter. Okay, good. So let me ask some questions here. First question for Gerry Lynch, since he's from Brooklyn and I forgot, what high school did you go to? (Inaudible.)

HON. LYNCH: No, I went to Regis High School in Manhattan.

SEN. SCHUMER: Yes, I remember that. Regis is probably the finest Catholic school in New, well, I don't want to get myself in trouble -- (cross talk) -- one of the finest schools -- (laughter) -- in New York state. Really excellent as a school. And where did you live in Brooklyn?

HON. LYNCH: I lived on the Brooklyn Queens border in Ridgewood.

SEN. SCHUMER: Ridgewood, nice, what street?

HON. LYNCH: 67th Avenue. Right near (Fresh Pun ?), the (Fresh Pun ?) Road Subway.

SEN. SCHUMER: Okay, so you're in the, that's really the Queens.

HON. LYNCH: That was, that's in the Queens end, yeah. Before that though, I was, I was born in, on the Brooklyn side in what was then Bethany Deaconess Hospital.

SEN. SCHUMER: Right.

HON. LYNCH: I lived on Underdunk (ph) Avenue and -- (cross talk).

SEN. SCHUMER: Underdunk Avenue, yeah, 67th Road is right near Saint Panper's (ph). That's really Glendale, wouldn't you -- (cross talk)?

HON. LYNCH: No, well, 67th Avenue is different from 67th -- (cross talk).

SEN. SCHUMER: Oh, 67th Avenue.

Okay.

HON. LYNCH: You know, you know Queens as well as Brooklyn --

SEN. SCHUMER: That was my old congressional district and just this Sunday - I ride my bike all over the city and so I love to go ride and see the churches. So I went to Saint Mathias (ph).

HON. LYNCH: Ah, that's my parish.

SEN. SCHUMER: Right. And I saw the pastor. He was greeting the parishioners as they came out and here's what you'll be happy to know. They had five masses that day. One in English, one in German, one in Polish, one in Italian, and one in Spanish, which shows you the diversity of the great Ridgewood neighborhood. And it's beautiful and what a beautiful church. I don't know the history, how they got it, it's a European style church right there in Ridgewood. It's gorgeous. Yeah, I have no more que (sic), no. (Laughter.) First, Judge Smith (sic), Judge Lynch, tell me who your model is of an appellate judge. (Inaudible.)

HON. LYNCH: The judge that clerked for when I graduated from law school was Judge Wilfred Feinberg. And I think he is the model of an appellate judge.

SEN. SCHUMER: Yeah.

HON. LYNCH: He recently received the so called Devitt Award which is a kind of lifetime achievement award for federal judges. He's now 89 and still sits as a senior judge, still with the same intelligence and meticulousness. But what I learned from him was the judicial craft. He was a very, and is, a very cautious - I'll use the past tense often because of when I worked for him --

SEN. SCHUMER: Right.

HON. LYNCH: -- but it's still true today. He is a very careful judge who always, when I drafted things for him he always wanted to make sure that whatever, any word that was said, any sentence that we said had to be backed up by precedent. And when I would sometimes say, but, judge, isn't that obvious? He would say, well, but do we really have to say it, then, if there's not a precedent to back it up? And so I learned that kind of craft from him.

SEN. SCHUMER: Great. Yes and he was, he was one of the outstanding judges. I think my friend Kevin Vane (ph) clerked --

HON. LYNCH: Yes.

SEN. SCHUMER: -- for him several years before you did. Okay. Do you believe in judicial restraint? And explain your answer including your own definition of what judicial restraint means.

HON. LYNCH: Well, I think the principal thing that, there are two pieces that I would say are the principal things about judicial restraint. One is, in the ordinary kind of case that doesn't have any constitutional dimensions or anything of the sort, judges are to decide only the issues that are before them. So that, quite apart from respect for the legislature, just in any ordinary case, it's very important that courts sit to decide the dispute that is before them, not to go beyond that and talk about other broader issues that are not necessary to the decision of that case. So that's one important aspect of judicial restraint.

The other is that where constitutional question are part of the case, the courts should presume that what legislatures do is constitutional. Let the, I'll speak only on the federal level to start with, the Congress is not only a co-equal branch, but it's the branch that speaks for the people. When there's a law that's adopted by Congress, signed by the president, it is to be expected that both the Congress and the president have considered constitutional matters and decided that the law is constitutional. Now, the court has to make its own decision about a constitutional issue. That's our responsibility; that's our oath. But, there still should be an assumption that what has been done is constitutional and it should only be overturned if the law is clearly unconstitutional according to the text of the constitution and the precedents that have been established.

SEN. SCHUMER: Thank you. Now to Ms. Smith. Tax Division serves as the enforcement arm, of course, of the IRS. At its helm, you play a large role in determining government's tax enforcement priorities. How will you prioritize and allocate resources between civil and criminal enforcement? How do you plan to allocate resources between large, high profile tax cases and garden variety enforcement actions? And what is your role, what is your view of the role of the role of the Tax Division within the Department of Justice?

MS. SMITH: Thank you, senator. I guess I'll answer the last part of that question first. I think the Tax Division has an important role within the Department of Justice and, as you mentioned, senator, it is the enforcement arm for the IRS and it serves an important function in that it instills confidence in taxpayers that our tax system is fair and the role of the tax division is to enforce the tax laws fairly and consistently. In terms of prioritizing, it will matter what cases come up. I know traditionally the department has about 3000 civil cases pending at any given time, has about 1700 criminal cases and I believe the resources will be allocated appropriately. And in terms of high profile cases, every case will get the resources it needs and if a case deserves more resources, I will ensure that that happens.

SEN. SCHUMER: Let me ask you this. Last week, president Obama announced a new initiative to crack down on offshore tax havens. What role do you envision the tax division playing in implementing the president's plans? Do you anticipate approaching these issues from a civil or criminal perspective? And how will you decide? That's fine.

MS. SMITH: Senator, these are just proposals that have been made. As I said the Tax Division's role is to enforce the law. If some of these proposals, if Congress deems it fit to pass these proposals and they are signed into law, we will use our resources accordingly to enforce the laws if passed both criminal and civil in that area.

SEN. SCHUMER: Okay, thank you. My time has expired. Let me call on my colleague, Senator Sessions.

SEN. JEFF SESSIONS (R-AL): Ms. Smith, on that particular question, there's some real concern that if we act the way the president is proposing, we can have a perverse tendency to cause people to move their corporate headquarters out of the United States. It's such a complex area. Will you commit to us, that if called upon to evaluate that, you will give both sides of that issue, and make sure the president is aware of the possible perverse results of some of these proposed changes?

MS. SMITH: Yes, senator. If I am so fortunate enough to be confirmed, and we are asked in the tax division for our opinion, we will certainly give it fair consideration, and I have no preconceived notions other than to enforce our tax laws fairly.

SEN. SESSIONS: Well, I'm a believer that people ought to pay their taxes. I try to pay mine. I think most Americans do. And when people don't, they're cheating not only the government, but their fellow citizens. And I think a good, aggressive tax division is important. And I don't buy into the idea that somehow we should not respect the tax department, or the IRS, who have a thankless task sometimes too. Judge Lynch, with regard to your action concerning the individual that was charged with pornography on their computer, had quite a number of pretty gruesome and explicit pornography images on the computer.

You felt that the sentence was too heavy, the mandatory minimum that congress had set. Would you just tell us what you did, and how the appeal took place? And how you would justify that, since it did appear to be that as a judge, you were taking a position explicitly contrary to the law.

MR. LYNCH: No, I don't think so, senator. But I'm happy to explain my action. First, in that case, it seems to me that I was entirely respectful of the government. I proposed to do something that is unusual, but that in a very recent case, the second circuit has now said is something that a district judge may do in an appropriate case, which is to advise the jury of what the sentencing consequences of their decision would be.

So, I put it to the government in a proposed charge, where I told them not only that I was proposing to do that, but also that I would instruct the jury as I instruct every jury, that if they found guilt beyond a reasonable doubt, they must on their oath, return a guilty verdict.

There was nothing in the charge that encouraged any kind of nullification. I did not allow any lawyer to argue, and did not propose to allow any lawyer to engage in an argument for nullification. I told the government that I was going to do that, not as any kind of threat, but in order to give them the opportunity, that if they wished, they could seek review of that decision. They did. The second circuit told me I should not do that, and I did not do that. I will go on to say that when the defendant was convicted of these offenses, I did impose what I believe, and what the prosecutor and the defense lawyer, and the probation department believed was the mandatory sentence that congress had ordained. It turned out I was wrong.

One embarrassing part of the case to, I think the whole legal system, is that the statute did not, in fact, impose a mandatory sentence in the view of the second circuit, because of a glitch in the wording of the statute. And they sent it back to me wit instructions to impose a sentence under the ordinary guidelines and rules of sentencing, and not according to what we had all thought was the mandatory sentence. So I followed the directions of the higher court at every turn.

And if I may say one other thing, senator. I should also say, I would certainly understand hesitation on the part of any member of this body to confirm a judge that they thought did not appreciate the seriousness of child pornography. As a prosecutor and as a judge, I've been forced to look at some of this material. It is not only repulsive, it's, that's not even the issue. It's not about obscenity. It's about the fact that these images are the record of atrocities committed against children. And I have no doubt about the seriousness of that offense. I've only had one other such case. In that case, I gave a gentleman a sentence that will keep him in prison until he's nearly 70 years old. He's now in his mid 50's. But in this particular case, I don't want to reargue the case, but --

SEN. SESSIONS: - (inaudible) -- Well, what's pretty clear is, that under what everyone thought at the time, ten years was the mandatory sentence. And you personally didn't agree with it. And you personally took a step that I think maybe the second circuit itself subsequently has changed the law. But at that time, judges were not empowered in, to tell what the sentence would be to the jury, because that, it then clouds their decision making process.

Their role in the process would decide the guilt or innocence, and the defendant would then have to suffer whatever the penalties call for. So weren't you, in effect, showing that your personal view, that you felt this was an excessive sentence, - (inaudible) -- the normal processes leading to in (ph) a delay, an expensive appeal, which the prosecutor might have capitulated in, and given in to your threats, and allowed the case to go forward. But instead, apparently they decide, no we're not going to give in to that. We're going to take it up on appeal, which you gave him a right to do. And then it was reversed at some great expense and delay.

MR. LYNCH: Well, the delay was about two days --

SEN. SESSIONS: I think that's the way I read it as a prosecutor. I know how a judge can work you over and put you in a tough position. And it looks like to me, the prosecutor said no. And he stood up. Sometimes you fold up in the face of a good, strong judge. And this time he said no, and prevailed.

MR. LYNCH: Well, senator, I think if you consulted any of the U.S. attorneys who have served in that position while I've been a judge, or any of the United States attorneys under whom I served as a federal prosecutor, I think that they would be unanimously of the view that I am a fair judge, that I do not threaten prosecutors or browbeat prosecutors.

But I don't play games and tricks. But I don't try to force prosecutors to do things that they don't want to do, or that they don't think is right to do. That I'm a straight shooter, and I tell the prosecutor what I plan to do, just as I tell defense lawyers what I plan to do, and give them the opportunity to argue to make, that I'm mistaken. And if necessary, to take appeals. And I'd be, I think anyone in New York would be very surprised at the idea that I would try to browbeat a prosecutor, or trick a prosecutor.

SEN. SESSIONS: Well, that's what this was. I mean, you told them you either agree to this kind of sentence, or I am going do something that's unprecedented. I'm going to tell the jury what the minimum sentence is, which the prosecutor had a right to object to. And you forced the prosecutor to choose whether to knuckle under or appeal, and the prosecutor appealed, and reversed you. Now that's what happened. Now, I'm not saying that's the only person not entitled to make an error. And I'm not saying that ten years might have been too severe in this case. I don't know the facts. You knew them better than I. I'm not criticizing you for that. But I think at this, on this particular question, you went beyond the normal role of a judge, wouldn't you agree?

MR. LYNCH: Well I certainly respect your view of that, senator. But I would question one thing, one way that you're putting this. I never threatened the prosecutor, agreed to this sentence or I will do something. I had suggested to the prosecutor, as I sometimes do, we have a very large district, and a lot of young prosecutors. And I suggested to the prosecutor that he make sure that his office was supportive of the position that was being taken, and that he seek review of that. He did. They decided to prosecute under this statute. And that was fine. During the trial, I suggested that this was something that I was going to do. There was never any quid pro quo, or any idea --

SEN. SESSIONS: Didn't you suggest that four years you thought was appropriate?

MR. LYNCH: I don't think I ever said that. But that's the sentence that I ultimately gave two years later when it came back --

SEN. SESSIONS: But basically, you said, you felt the sentence was too heavy as mandated, and you wanted the prosecutor to review the recommendation, and seek review by higher officials in the Department of Justice, which you have a right to do, I think. I think that's healthy thing to do. And, but they didn't agree.

MR. LYNCH: They did not agree. Absolutely, there's not, there's no question about that, senator. And there's no question the second circuit thought I was wrong, told me so. They've done it on other occasions.

SEN. SESSIONS: But not too many.

MR. LYNCH: Not too many. But if they do, then I have to follow what the, what they say. And I've always tried to follow what the higher court tell me is the law.

SEN. SESSIONS: My time (has expired ?).

SEN. SCHUMER: Senator Klobuchar.

SEN. AMY KLOBUCHAR (D-MN): Thank you very much, chairman. Thank you to both of our nominees and their families. I just wanted to first of all, acknowledge Ms. Smith, who is, I'm proud to congratulate, because she's also a fellow graduate of the University of Chicago Law School. I've had a very big University of Chicago day. I actually introduced Cass Sunstein at his nomination hearing this morning. And we're in the middle of an economic crisis, Mr. Lynch, and I'm eager to hear more about what you think are the role of the tax division in ensuring the fair application of the tax laws and then enforcing the laws, and bringing those who cheat the laws to justice.

Judge Lynch, you have had a distinguished record on the bench for the last ten years, and you were in (ph) public service long before that, as a federal prosecutor, and as counsel to a number of investigative commissions and independent counsels. I do note, just reading your biography here, that you served as an assistant U.S. Attorney and chief of the criminal division under two Republican administrations. And I know I had a good exchange there with Senator Sessions.

I was going ask you if you wanted to clarify. You were saying you wanted to clarify the difference between the cases, on in which you put someone away who was a child pornographer, or engaged in child pornography until he was 70. And this case, where you felt that a shorter sentence was warranted.

MR. LYNCH: Well, in both cases the crime, the principal crime was transmission of child pornography over the internet. Neither of these individuals made the pornography, or were in the commercial distribution of pornography. The older man, however, had a record of pedophilia, certainly had a past history of child abuse. He also engaged with the undercover officer who was pretending to be first a mother, and then a child, in seductive behavior, and attempting to engage the child ultimately in sexual activity.

He had, made no pretense of recognizing that he had a problem. Either defended or denied his actions at all times, and seed to me to be a rather dangerous individual. Pablo Cruz (ph) was 18 years old. He had started engaging in this collection of images before he was 18 years old. He had no record of any sexual activity of any kind as far as anyone knew whatsoever. He acknowledged that he had a problem, and wanted to seek treatment for it.

His, I asked the government at the sentencing, the ultimate sentencing, when I had discretion it didn't matter, when it was a mandatory sentence, or I thought it was a mandatory sentence. But I asked the government if they had any information for me about young people who may be attracted to child pornography, whether there's scientific evidence that such people pose a danger, whether there's any evidence about whether early treatment makes a difference, or whether this is something that's ingrained in somebody from an early age. And they told me they didn't really know. They didn't have any evidence one way or the other. And there may be such evidence, I don't know. But in that situation, it seemed to me that that a lesser sentence was appropriate in that case.

SEN. KLOBUCHAR: Thank you very much for that explanation. Ms. Smith, one thing that I've asked a number of nominees for the Department of Justice is, really stemming out of our own experience in Minnesota, where a U.S. attorney was put in who was more of a political appointment. There were some huge problems with management that resulted in the office.

When attorney general McCavey (ph) came in, he put in a different U.S. attorney, and things have been much calmer, more calm and under control. And it always had been a gem of an office. And I saw first hand the problem of politicizing the office, and office, when I was county attorney. The biggest county in Minnesota for eight years, I worked extensively with the U.S. Attorney's office, and I saw that destruction. And I know there's also been morale issues at the Justice Department. I wonder if you could just talk briefly about how you see that is improving, and what you see your role will be in that.

MS. SMITH: Thank you, senator. I, I'm aware of the, some of the past problems at the department. And I just want to say at the outset I, for the tax division, and I guess across the department, politics should play no role in enforcement of our tax laws. I guess I'm happy to say that from some of the past problems at the tax division, I think fared pretty well in that regard. And I know that there's a large number of outstanding attorneys in the division. And I look forward to working with them and maintaining the highest standards of integrity, as I have a deep appreciation for that from my time as a career lawyer at the department.

SEN. KLOBUCHAR: Thank you. Could you talk about the role you see of the tax division in combating financial fraud, as we're seeing more and more of these cases from Bernie Madoff to a number of white collar cases we're seeing across the country?

MS. SMITH: Thank you, senator. Yes, we're in a difficult economic time lately, and I think it's important, the division plays an important role in enforcing our tax laws. And they must do so fairly and consistently so that tax payers have confidence in the system. And I, if I'm so confirmed, I know the department already coordinates with U.S. attorney's office around the country in prosecuting cases. And I look forward to continuing to do that. Often times, the tax cases are the ones that actually get prosecuted if the evidence is not developed in other aspects. And so, I think the tax division plays an important role in doing that.

SEN. KLOBUCHAR: I think that's a good point. And the other thing I saw, even in our state courts, was just prosecuting some of these cases. We had one involving eight airline pilots who were pretending they lived in another state that didn't have income taxes, and had post offices box (ph) there. And eleven new (ph) departments of the state said they literally had, I don't know, hundreds, a lot of money. Thousands and thousands and thousand dollars, hundreds of thousands dollars come in after that case. Because it set up the (ph) deterrent effect.

And I know that earlier this year, the federal tax division had a huge success when the federal district judge accepted a deferred prosecution agreement between UBS, where UBS agreed to pay 780 million in fines, while acknowledging that it participated in a scheme to defraud the U.S. Do you believe this has sent a message to other companies that might be helping tax payers to defraud the U.S? And how significant of a problem do you believe that these offshore tax havens are?

MS. SMITH: Yes, thank you, senator. Yes. And just to clarify at the start, I am not a part of the department, so I know no non- public information about the case. But it has received a lot of publicity, and I do think that part of the role of the tax division is to, there's not unlimited resources, unfortunately. So they have to pick cases that need to be prosecuted, and sometimes the cases get live publicity, and they do serve as a deterrent to others.

And I hope that that will be the case with the UBS case. And in terms of offshore tax avoidance, that is a growing problem. And I know the division has been actively engaged on that. And I, I look forward, if confirmed to continuing that, because I think that the problem of the international tax avoidance is a growing problem. And I look forward to working closely with the IRS and other folks at Treasury to try to combat that problem.

SEN. KLOBUCHER: Thank you very much.

SEN SCHUMER: I've asked all the questions that I have. But I'm going to call on Senator Sessions for a second round.

SEN. SESSIONS: Thank you. Ms. Smith, I think the tax division of the U.S. Department of Justice is a very important thing. What is it, 350 lawyers, most of them are career lawyers, who've deeply immersed in the complexities of the U.S. tax law. They have established certain precedents that they try to adhere to over the years. They decide what kind of cases that need to be defended, what kind of defenses on appeal they need to make, what kind of defenses not to make.

It's a very technical matter. I remember another New Yorker, Rudy Giuliani, when he was leaving as U.S. attorney, and he had a different opinion than, I guess it was former President Bush had about who should replace him. And he at one point in exasperation said, well, I'd like him to appoint somebody who can at least contribute to the discussion every now and then, in reference to a nominee that he thought had no experience in the work of U.S. attorney. So you have virtually no experience in tax, tax work, it seems to me. First, would you tell us what tax experience you have? How would you characterize that, and as you come into this very important office with quite a number of superb attorneys?

MS. SMITH: Thank you, senator. I, I've spent the last several years litigating complex financial litigation, extremely complex. I've worked in-house at TYCO, and I was responsible for the huge, sprawling consolidated multi district litigation involved, rising out of their Kozlowski era. And I came in after the fact to help clean that up and put the company on a right, the right course.

That case involved many different allegations of security fraud. There were very complex accounting issues. There were five restatements (ph) by the company involved in that litigation, and there were also some tax issues. And I, I have to say, senator, that I delved in deeply to that. And often times knew the facts of the accounting issues, things (ph) better than most of the people involved in the case. I worked closely with our accounting experts, and I believe that my financial background would serve me well in this position.

SEN. SESSIONS: Well, admittedly (ph) that's just not much. I usually think that the nominations should be of a persons who already have experience in some years in these areas. I just got to tell you, that's troubling to me. I don't know why that would be necessary to choose someone who doesn't have a lot of experience in the area. What about management experience? Have you had much management experience?

MS. SMITH: Yes, senator. When I was at Skadden Arps here in DC, I used to manage large teams of attorneys and legal assistants. And also in my role at TYCO, which was a huge litigation, I managed all of our outside counsel and over a hundred contract attorneys. And my role was probably not the traditional in-house counsel role. I actually was driving the strategy, and reviewing all the briefs and advising on who should be working on what projects.

And I assigned personally all of the outside counsel individually to depositions or other matters on the case.

SEN. SESSIONS: Are you familiar with the tax division's standards on illegal tax shelters?

MS. SMITH: Senator, I have read some things that, as I've said, I'm not in the department yet. So I am sure that I will read more if I'm so confirmed.

SEN. SESSIONS: Well you have a good academic record, and have had success in the private sector. That I don't doubt. But I'm just a bit uneasy, to me, to have someone with so little experience in this position. I don't have any information that you lack integrity or a good work ethic. So I just want to raise those questions. I may submit a few written questions to you along that line.

MS. SMITH: Thank you, senator.

SEN. SESSIONS: Judge Lynch, I don't know that I asked you. We debated it last time, when you did a memorial address for Justice Brennan, who you clerked for. And it was always sort of a significant matter to me that he dissented on every death penalty case, which I thought was breathtaking. Because he declared that the 8th amendment, cruel and unusual punishment, prohibition, outlawed the death penalty. Within the constitution itself, there's quite a few references to capital crimes, to not taking life without due process, and every state at the time the constitution was adopted had a death penalty, and so did the federal government.

So the people who adopted the constitution had no idea that someone would take the cruel and unusual punishment language 200 years later, and say the constitution prohibits the death penalty. Now, we can all disagree on it. But, so I guess, let me ask, and you praised him at that memorial address, and said that you should interpret the constitution, or at least Justice Brennan did in light of what happens today. And not some 18th century text book, as I recall. So do you mean that a appellate judge is free to take the constitution and just give it meaning, that's been established for 200 years, a new meaning? Because it's today and not then?

MR. LYNCH: Of course not, senator. The constitution is a written document. That's what gives it its power and its legitimacy. That's why, unlike many countries, statutes that are passed here are subject to judicial review, because the people established a constitution. And it's only the constitution that they established, the written constitution, that gives any judge the authority to say that something is unconstitutional. That's not some free range power of the judge. That's because the constitution, as it exists, as it's written, is the law of the land.

What changes is society, not the constitution. And there is certainly, as we all know, problems that come up in our society that the framers had no idea of. Recently the Supreme Court decided a case about whether, not that recently anyway, a few years ago, a case about whether the technology that could look inside somebody's house from outside constituted a search. Now, James Madison, I don't think, would have had much thought about that, of course. But the principle in the constitution talks about reasonable and unreasonable searches and seizures.

And a court is going to have to look at the contemporary problem and apply to that the principles that are adopted in the constitution. And there's nothing in a dictionary from the 18th century that's going to help with that. There are, of course other, of course we do know what the framers thought about the searches and seizures. And we should look back to that for guidance in applying it to these new problems.

SEN. SESSIONS: Well, I think that's correct. But I don't think, and I'm not going to ask you to criticize the man who gave you a job as a law clerk on the U.S. Supreme Court, which is quite an honor to achieve. But I will. I think that's not the principle he used. This was not a question of high tech examples of search and seizure. It was an absolute reversal of the plain textual language of the court, by twisting one clause, and casing it to override a whole bunch of other clauses. Fortunately, no members of the court now adhere to that view, but at the time two did, and many thought the court may continue that line of reasoning. But fortunately they've drawn back.

MR. LYNCH: Well --

SEN. SESSIONS: Those are issues that are important. I think you have to give, as Professor Ben Austine (ph) of Duke once said, if you respect the constitution, really respect it, you will enforce it like it's written, not like you'd like it to be. And in the long run, all our liberties are better protected in that way. Mr. Chairman, I appreciate your courtesy in allowing me to ramble on. I think these are important questions. And I intend to give both these nominees a fair evaluation.

SEN. SCHUMER: Thank you, Senator Sessions. And appreciate your questions and desire to be very fair here. I'm going to ask unanimous consent that we submit, there are 33 letters in the record supporting the nomination of Mary Smith. I'd like to pay particular attention, or note particularly the letter from Nathan Hockman. He was the former person who occupied the position for which Mary Smith has been nominated, and says he has complete in her, which I think is a pretty good recommendation, particularly in light of Senator Sessions' legitimately asking the experience you have had in the division. If there are no more questions, we're going to hold the record open for a week. A week, so people can submit written questions. We thank both the witnesses and your families. I'm sure they're both proud of you, and look forward to considering both of your nominations. With that, the hearing's adjourned.

END.

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