trying the case then considers this evaluation and balances it against the need for the evidence in the
case before it. So, before the information is released, two judges have made an evaluation of the need
for secrecy. This two-step process underscores how closely the courts guard against violating the rule
of secrecy.
Note that the Douglas case dealt with releasing information for use in a lawsuit. This is one of the
exceptions to the rule of secrecy. Rule 6(e)(3)(c)(i) allows disclosure "when so directed by a court
preliminarily to or in connection with a judicial proceeding." The court defined "judicial proceeding"
narrowly in U.S. v. Baggett, 77 L.Ed 2d 785 (1983). Baggett had been under a grand jury investigation
for phoney commodities transactions. Eight months after Baggett pled guilty to two misdemeanors
(without an indictment ever being issued), the Internal Revenue Service requested disclosure under
Rule 6(e)(3)(c)(i) for use in an IRS audit. The Court found that a taxpayer has four options when faced
with an audit: (1) pay the tax, (2) petition the tax court for a reduction, (3) pay the tax, go through the
administrative process and then sue in the court of claims for a refund, or (4) do nothing and wait for
the IRS or the government to take steps to collect the tax. The Court found that an IRS audit was not a
judicial proceeding. The Court then said that numbers 2 and 3 (above) were judicial proceedings. The
question then, was whether the IRS audit was "preliminary to" either of the two judicial proceedings; if it
is, there may be a disclosure; if not, then no disclosure. The IRS argued that litigation was likely and it
is wise to prepare an administrative action well enough to be able to defend it in court; therefore, the
audit was "preliminary to" a judicial proceeding. The Court disagreed and said that the question was
one of the actual use to which the material would be put. The primary purpose of the disclosure must
be to assist in preparing for or conducting a judicial proceeding. The fact that a judicial proceeding
might or is likely to occur is not enough. The IRS is not required to resort to litigation after an audit; any
of the four options might be used by the taxpayer. So, once again, the Court has rule against
disclosure of grand jury information unless a definite need can be established.
As an investigator, you may feel that grand jury information should be made available to you under
Rule 6(e)(3)(a)(i) or (ii), which allow disclosure to a U.S. attorney. The Court keeps this exception
narrow also. In U.S. v. Sells Engineering, 77 L.Ed 2d 743 (1983), the Court ruled that 6(e)(3)(a) does
not include government attorneys who are litigating civil cases. The Court ruled that civil division
attorneys must apply for a court order to obtain grand jury information, they may not rely on the
exception for government attorneys. The Court then stated that the procedure to be used for release is
the same as was stated in Douglas Oil; the supervising court evaluates secrecy versus the need for
disclosure, makes a recommendation to the second court which balances the need for secrecy
recommendation against the need for disclosure in the case at hand.
With such strict controls placed on disclosure, the U.S. attorneys must be very careful about
disclosure of grand jury information; so, do not be surprised if a request for information is denied.
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