In re Criminal Investigation No. 1

BLOOM, Judge. The shock waves from the collapse of Old Court Savings & Loan Association weakened (or at least revealed the weakness of) the foundations of several other savings and loan institutions, precipitating a crisis that appears destined to keep the courts of this state and a good many of its lawyers supplied with litigation for quite some time. This appeal is part of that litigation; it arises from the financial difficulties of one of those troubled savings and loan institutions (hereinafter referred to as The Institution). 1 A Special Grand Jury investigating The Institution caused to be issued several subpoenas duces tecum, two of which ⁵⁹² are relevant here. One was issued directly to appellant, a former director and officer of The Institution, ordering him to appear before the Grand Jury with certain records relating to The Institution and its operations.

The other subpoena was issued to appellant’s accountant, directing the accountant to appear before the Grand Jury with records pertaining to appellant’s income taxes for the years 1980-1987. Upon receipt of the subpoena served upon him, appellant filed a motion to quash it, contending that the subpoena infringed upon the privilege against self-incrimination afforded him by both the Fifth Amendment to the federal constitution and Article 22 of the Maryland Declaration of Rights. Concomitantly, appellant notified his accountant that he intended to assert his privilege against self-incrimination relative to the income tax records held by the accountant. 2 The accountant was commanded to release the income tax records to appellant and, therefore, not to produce the files or copies to the Grand Jury. In response to his client’s demands, the accountant filed a motion, in the Circuit Court for Baltimore County, for a protective order and requested the court to instruct him whether he must comply with the Grand Jury’s subpoena or whether his client’s assertion of a Fifth Amendment privilege would override the subpoena.

A hearing on appellant’s motion to quash and his accountant’s motion for protective order was held on December 2, 1987. At the conclusion of the hearing, the court entered two orders. The first order denied appellant’s motion to quash and commanded him to comply with the subpoena served on him (with one restriction not relevant here); the second denied the accountant’s motion for protective order and directed the accountant to comply with the subpoena ⁵⁹³ served on him. This appeal, allegedly taken pursuant to the holding of the Court of Appeals in In re: Special Investigation No. 244, 296 Md. 80, 83-86 , 459 A.2d 1111 (1983), is from the order denying the accountant’s motion.

In accordance with an agreement made at the December 2, 1987, hearing, the circuit court stayed its order pending this appeal. Since no appeal was taken from the denial of appellant’s motion to quash, that order was not stayed. Appellant makes three contentions that he asserts warrant a reversal of the order to enforce the subpoena issued to the accountant. Specifically, he contends: 1.

The subpoena exceeds the gubernatorial authorization and is thus invalid. 2. The subpoena exceeds the reasonableness and relevancy limitations of the Fourth Amendment. 3. The subpoena, if enforced, violates appellant’s privilege against self-incrimination. 3 I The United States Supreme Court consistently has stated that a grand jury’s function should not, except in the most extreme situations, be interrupted, interfered with, or monitored too closely. Branzburg v. Hayes, 408 U.S. 665 , 92 S.Ct. 2646 , 33 L.Ed.2d 626 (1972); Costello v. United States, 350 U.S. 359 , 76 S.Ct. 406 , 100 L.Ed. 397 (1956); Blair v. United States, 250 U.S. 273 , 39 S.Ct. 468 , 63 L.Ed. 979 (1919); Hale v. Henkel, 201 U.S. 43 , 26 S.Ct. 370 , 50 L.Ed. 652 (1906). 4 Maryland has likewise extended the ⁵⁹⁴ same deference to the unfettered functioning of the grand jury.

Bartram v. State, 280 Md. 616 , 374 A.2d 1144 (1977); Bernard v. Warden, 187 Md. 273 , 49 A.2d 737 (1946); In Re: Report of Grand Jury, 152 Md. 616 , 137 A. 370 (1927); Pick v. State, 143 Md. 192 , 121 A. 918 (1923); Owens v. Owens, 81 Md. 518 , 32 A. 247 (1895); Blaney v. State, 74 Md. 153 , 21 A. 547 (1891); In Re: A Special Investigation No. 224, 54 Md.App. 137 , 458 A.2d 454 , cert. denied, 296 Md. 414 (1983). Notwithstanding these authorities, appellant has attempted to thwart the present grand jury investigation by asserting that the subpoena exceeds the authority granted to the Attorney General’s investigation. Specifically, appellant argues that the authorization by the Governor 5 is only for an investigation of The Institution and not for a tax investigation of himself. He concludes that if the Attorney General wants to investigate his personal income taxes then the Attorney General will need another gubernatorial authorization to do so as the present authorization does not permit a tax investigation of appellant.

Based on our decision in In Re: A Special Investigation No. 258, 55 Md.App. 119 , 461 A.2d 34 (1983), we believe appellant’s argument is premature. In that case, the late Judge Lowe stated that “[ajbsent an improper and unneces ⁵⁹⁵ sary harassment, we know of no constitutional right of one under grand jury investigation to obstruct, or even to impede, that investigation by inquiring into its procedural propriety which traditionally is (as nearly as possible) a jealously guarded secret.” 55 Md.App. at 123 , 461 A.2d 34 . Judge Lowe further noted that “we fail to see how a motion to quash the grand jury’s subpoena can give rise to a right to challenge the Attorney General’s role as adviser to that Grand Jury.” Id. In summation, Judge Lowe concluded that “we can see at this stage of the proceeding [the pre-indictment stage] absolutely no right or relevance, upon a motion to quash a grand jury’s subpoena, of appellants to review or ‘determine’ the Attorney General’s authority to investigate them.” 55 Md.App. at 127 , 461 A.2d 34 .

In light of these foregoing statements and because of the importance of allowing a grand jury to work without any interference, it would be incongruous for us to permit a challenge to the gubernatorial authorization of the Attorney General at this pre-indictment stage. Furthermore, such a challenge ordinarily could not be made because the subject of a grand jury investigation has no right to inspect the gubernatorial authorization prior to an indictment. In Re: A Special Investigation No. 258, 55 Md.App. at 127 , 461 A.2d 34 . Consequently, a subject under investigation by a grand jury should be unable to challenge, in good faith, the gubernatorial authorization because the investigatee ordinarily would not know the contents of the authorization until, and if, an indictment is handed down.

In short, the subject of a grand jury investigation has no right to attack the Attorney General’s authorization prior to the issuance of an indictment. If and when the subject is indicted he may move to quash the indictment, or if he is convicted upon that indictment, he can then launch an attack on the conviction, based upon the fact that the Attorney General lacked the authority to prosecute in the first instance. See, e.g., Bomhardt v. State, 71 Md.App. 609 , 526 A.2d 983 , cert. denied, 311 Md. 144 , 532 A.2d 1371 (1987). To permit appellant to challenge the Attorney General’s authorization ⁵⁹⁶ prior to a conviction or even prior to an indictment would send a message to other subjects of grand jury investigations to engage in, as Judge Moylan put it, “ingenious obstructionism.” See, In Re: A Special Investigation No. 224, 54 Md.App. at 139 , 458 A.2d 454 .

This we will not permit. We hold, therefore, that appellant’s assault upon the Attorney General’s authorization is, at this stage, premature. We have no hesitancy in stating, nevertheless, that were this matter before us we would unquestionably reject appellant’s contention that the Governor’s authorization was not broad enough to support an investigation into appellant’s tax records. At the December 2, 1987, hearing the Attorney General consented to make the gubernatorial authorization part of the record as an aid to the trial judge.

(The mere fact that the authorization has been made part of the record does not thereby create a right to challenge that authorization in the pre-indictment stage. See In Re: A Special Investigation No. 258, 55 Md.App. at 127 , 461 A.2d 34 .) That authorization, issued pursuant to Md. Const, art. V, § 3(a)(2) and signed by Governor Schaefer, granted the Attorney General power to investigate “the possibility of criminal conduct with respect to the financial affairs of [The Institution], its affiliated companies and associated individuals.” (Emphasis added.) The authorization permitted the investigation of various possible crimes, including “violations of the State tax laws.” Since appellant was an “associated individual” of The Institution and since the authorization permitted an investigation of tax law violations, it is so clear that the Attorney General’s investigation of appellant’s tax records by way of the subpoena was entirely authorized and thus appropriate that appellant’s contention to the contrary borders on the frivolous. II The Fourth Amendment prohibition against unreasonable searches and seizures restricts the investigatory power of a grand jury.

Hale v. Henkel, 201 U.S. 43 , 26 S.Ct. 370 , 50 ⁵⁹⁷ L.Ed. 652 (1906); In Re: Special Investigation No. 281, 299 Md. 181 , 473 A.2d 1 (1984); In Re: Special Investigation No. 249, 296 Md. 201 , 461 A.2d 1082 (1983). A subpoena duces tecum issued by a grand jury must be reasonable and relevant to the investigation. Okla.Press Pub. Co. v. Walling, 327 U.S. 186 , 66 S.Ct. 494 , 90 L.Ed. 614 (1946); United States v. Mackey, 647 F.2d 898 (9th Cir.1981); In Re: Special Investigation No. 281, supra.

In determining whether a particular subpoena is reasonable, the court needs to consider three requirements. 1. That the subpoena command only the production of materials relevant to the investigation; 2. That the subpoena specify the materials to be produced with reasonable particularity; and 3. That the subpoena command production of materials covering only a reasonable period of time.

In Re: Special Investigation No. 281, 299 Md. at 192-93 , 473 A.2d 1 (citing United States v. Reno, 522 F.2d 572 (10th Cir.1975)). Appellant asserts that the subpoena fails to meet the first and third requirements. The Attorney General argues that we should not reach this issue because appellant never raised the argument below. In order for an issue to be preserved for appeal, that issue must be raised and decided by the trial court.

Md. Rule 1085. This Court ordinarily will not entertain an issue that was not raised below but is raised for the first time on appeal. Kanaras v. State, 54 Md.App. 568 , 460 A.2d 61 , cert. denied, 297 Md. 109 (1983); White v. State, 7 Md.App. 416 , 256 A.2d 174 (1969); Gaylord v. State, 2 Md.App. 571, 235 A.2d 783 (1967). Throughout the pleadings and the hearing, appellant steadfastly asserted his privileges against self-incrimination, both state and federal, but not once did he assert any Fourth Amendment rights. 6 The ⁵⁹⁸ Fourth Amendment argument having been neither raised nor decided by the trial court, that issue is not preserved for this appeal. 7 Ill Appellant asserts that the subpoena issued to his accountant violates his Fifth Amendment privilege against self-incrimination.

In support of this position, he cites three cases. The first is United States v. Doe, 465 U.S. 605 , 104 S.Ct. 1237 , 79 L.Ed.2d 552 (1984), which involved a federal grand jury investigation of corruption in the awarding of county and municipal contracts. As part of that investigation, ⁵⁹⁹ subpoenas were issued to Doe, the owner of a sole proprietorship, commanding the production of certain business records of several of his companies. Doe filed a motion to quash the subpoenas which the Federal District Court granted except as to records required by law to be kept or disclosed to a public agency.

The District Court held that Doe’s act of producing the records would involve a compelled testimonial self-incrimination. The United States Court of Appeals for the Third Circuit affirmed, holding that the records were privileged by the Fifth Amendment and that Doe’s act of producing them would have a “communicative aspect of its own” in that the turning over of the records to the grand jury would admit their existence, possession, and authenticity. The Supreme Court affirmed in part, reversed in part, and remanded. In so doing, it held that the contents of the subpoenaed documents (which are equal in many respects to the ones subpoenaed in the case sub judice) were not privileged by the Fifth Amendment.

The Court noted that the Fifth Amendment protects the person asserting the privilege only from compelled self-incrimination. Where one prepared the records voluntarily, no compulsion would be present. In Doe , the Supreme Court noted that Doe did not claim that he prepared the documents involuntarily or that the subpoenas would force him to restate, repeat, or affirm the truth of the records. Hence, the Court held that the documents themselves were not privileged.

The Court went on to hold, however, that although the documents were not subject to Fifth Amendment protection, the act of producing them might be. That is, a subpoena that compels the holder of a document to perform an act could have a testimonial aspect with an incriminating effect. As the District Court made a finding of fact that the documents would incriminate Doe, the Supreme Court upheld the District Court’s order, affirmed by the Circuit Court, that Doe’s production of the documents would violate ⁶⁰⁰ his Fifth Amendment privilege. Accordingly, the Court concluded that the documents could not be compelled without a grant