MEMORANDUM

VINCENT L. BRODERICK, District Judge.

I.

Defendant Norman Turkish has moved for dismissal of the indictment against him or for suppression of evidence, claiming that the attorneys who represented him in the investigatory phases of this case had a conflict of interest, that he did not waive any rights to object to the conflict, and that the government exploited the conflicted position of his prior attorneys.

An evidentiary hearing was held before me on July 12 through 14, 1978. On the basis of the evidence (or lack thereof) adduced at the hearing, I have determined that defendant's motion should be denied. This memorandum sets forth the reasons for that denial.

II.

In June, 1976 the New York County District Attorney initiated an investigation ("the investigation") into the Crude Oil Market on the Cotton Exchange.

Bear Stearns Co. ("Bear Stearns") is a company which, inter alia, acts as broker and dealer in the trading of commodities futures. In connection with the investigation, a grand jury subpoena duces tecum was served upon Bear Stearns in August, 1976; the subpoena called for the production of certain records relating to trades in the Crude Oil Market.

Turkish is a limited partner of Bear Stearns, and he specializes in commodities futures. The law firm of Paul, Weiss, Rifkind, Wharton Garrison ("Paul Weiss") was retained by Bear Stearns in August, 1976 and represented Bear Stearns and various Bear Stearns employees, including Turkish, throughout the investigations by the District Attorney and the United States Attorney's office.

On April 13, 1978 indictments were filed against Turkish and others in New York County and in this court. The federal indictment charged him with conspiracy to defraud the United States, evasion of income tax and filing of false tax returns.

When Turkish was indicted, Paul Weiss suggested to him that he obtain new counsel and actively assisted him in a painstaking search, recommending to him, among others, the attorneys who represented him in making this motion.

The United States Attorney's Office used before the federal grand jury and plans to use at trial evidence obtained by the District Attorney, in addition to evidence obtained through its own investigation begun in February, 1978.

Turkish's motion arises out of the representation by Paul Weiss during the investigations not only of Turkish but also of Bear Stearns and other Bear Stearns employees. Turkish contends that the multiple representation violated Canon 5 and related rules of the American Bar Association's Code of Professional Responsibility (as amended 1976) ("the Code") in that Paul Weiss had a conflict of interest in its multiple representation. He further contends that the District Attorney. and the government exploited his attorneys' allegedly conflicted position.

III

In the criminal context multiple representation is always troubling. After indictment the situations will be rare indeed where conflict of interest does not exist, whether or not it has yet become apparent. See, e. g., Salomon v. LaVallee, 575 F.2d 1051, 1053 (2d Cir. 1978), "the perils of joint representation for co-defendants at trial have become increasingly clear." Before indictment the potential for conflict is always there although identification of the areas of potential conflict may be considerably more difficult since precise charges are not available to pinpoint those areas.

Judicial scrutiny in the criminal context of multiple representation by attorneys, and of conflict or potential conflict of interest in connection therewith, has been focussed to date on the stages of 1) pre-indictment grand jury investigation and 2) trial. Judicial attention has generally been directed to multiple representation of witnesses before grand juries by prosecutors who claim that such representation impedes the grand jury's investigation. See, e. g., In re Taylor, 567 F.2d 1183 (2d Cir. 1977). In the trial stage the issue has been raised by defendants, who claim that conflicts in multiple representation situations have deprived them of the effective assistance of counsel, ( Salomon v. La Vallee, supra; United States v. Carrigan, 543 F.2d 1053 (2d Cir. 1976); United States v. Mari, 526 F.2d 117 (2d Cir. 1975), cert. denied, 429 U.S. 941, 97 S.Ct. 359, 50 L.Ed.2d 311 (1976)), and by appointed counsel who protest that they cannot effectively represent multiple defendants in a criminal trial ( Holloway v. Arkansas, 435 U.S. 475, 98 S.Ct. 1173, 55 L.Ed.2d 426 (1978).

With respect to post-indictment situations certain procedures have evolved and are still evolving. While a person in a criminal context is entitled to counsel of his choice ( United States v. Sheiner, 410 F.2d 337, 342 (2d Cir.), cert. denied, 396 U.S. 825, 90 S.Ct. 68, 24 L.Ed.2d 76 (1969)), the court is required to ascertain, when more than one defendant is represented by the same counsel, "whether a conflict exists to the degree that a defendant may be prevented from receiving advice and assistance sufficient to afford him the quality of representation guaranteed by the Sixth Amendment." Each defendant is to be "fully advised by the trial court of the facts underlying the potential conflict and be given the opportunity to express his views." United States v. Carrigan, supra, 543 F.2d at 1055. If, after being advised, a defendant opts to continue with the joint representation, he bears the burden, in a post-trial challenge, to show that prejudice has resulted. If there has been no inquiry, the government bears the burden of showing that there was no prejudice. Salomon v. LaVallee, supra, 575 F.2d at 1055.

In the grand jury investigation phase, problems surface less frequently, and the evolution of ground rules has been less obvious. The Court of Appeals for this Circuit has suggested the applicability of the post-indictment procedures to problems which arise in the grand jury context. See In re Taylor, supra, 567 F.2d at 1186.

As one regresses from the trial context through grand jury investigation to the initial stages of a prosecutor's investigation, resort to a court for assistance and guidance becomes more difficult. No charges have been formulated, the direction the investigation is to take may not have been charted, and, so far as persons touched by the investigation are concerned — clients and counsel alike — the guideposts may be scarcely visible. Is it a serious investigation? What information does the prosecutor have? What is he after? Whom is he after? Is there any reason to be concerned? How concerned? Resort may be had to the prosecutor to seek answers to these questions, but most will probably remain unanswered because the prosecutor is unwilling, or perhaps more often unable, or perhaps both, to respond.

Often persons called by a prosecutor in the initial stages of an investigation do not seek counsel, when they would have been well advised to do so. Where several have been summoned they may seek joint counsel. Expense will invariably be a factor — obviously joint representation is more economical. If those summoned in the investigation work for an entity, the entity may retain counsel to represent itself and its employees and officers, as did Bear Stearns herein. If the investigation comes to naught this works out well; if the investigation culminates in indictment of some of those jointly represented hindsight often — perhaps almost invariably — indicates that separate representation from the outset would have been advisable.

But in the initial stages of an investigation, who is to catalyze consideration of the possibility of separate representation for those who are called or interviewed? The individuals who are jointly represented know what they did and did not do, but they may not know the importance of individual representation. The jointly retained attorney, if he is experienced in criminal matters — often he is not — may well believe that individual representation from the outset is advisable. But he knows only what he has been told by the individuals he represents, and if any of the individuals has done or omitted to do things which may expose such an individual to indictment, the chances are very good that he will not inform counsel — particularly if the jointly retained attorney is being paid by the individual's employer. The prosecutor in the early stages of an investigation may have no idea where, or to whom, the investigation will lead. Until grand jury proceedings begin there is no judge related to the matter who can act as a catalyst.

Constitutional rights are, to be sure, not violated by multiple representation of those called in the early stages of a criminal investigation, but if the investigation ultimately culminates in the indictment of one or more, but less than all, of those jointly represented, those indicted may turn out to have been less than adequately represented. A catalyst is needed to alert those threatened by the criminal process to the need for individualized, and independent, representation. With no judge involved the only possible catalysts are the attorney retained on a multiple representation basis and the prosecutor.

IV

Multiple representation and potential problems associated therewith are addressed under Canon 5 of the Code, which mandates "Exercise [of] Independent Professional Judgment on Behalf of a Client." Disciplinary Rule 5-105 instructs that a lawyer should decline employment or should cease multiple employment "if it would be likely to involve him in representing different interests . . . [unless] it is obvious that he can adequately represent the interest of each [client] and . . . each consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each." See also A.B.A. Standards Relating to the Defense Function 3.5 (Approved Draft, 1971); Code Ethical Considerations EC 5-14 through 5-20.

The Code recognizes that "[w]hether a lawyer can fairly and adequately protect the interests of multiple clients depends upon an analysis of each case. In certain circumstances, there may exist little chance of the judgment of the lawyer being adversely affected by the slight possibility that the interests will become actually differing . . ." EC 5-17. See also Holloway v. Arkansas, supra, 435 U.S. at 482, 98 S.Ct. at 1178, "[I]n some cases multiple defendants can appropriately be represented by one attorney; indeed, in some cases, certain advantages might accrue from joint representation."

That multiple representation may be appropriate does not excuse defense counsel from raising the question of a possible conflict with the clients involved in the multiple representation. The clients then may object or consent to the multiple representation.

The Supreme Court has held, in connection with waiver of one's Sixth Amendment right to effective assistance of counsel, that "determination of whether there has been an intelligent waiver . . . must depend, in each case, upon the particular facts and circumstances surrounding that case, including the background, experience, and conduct of the accused." Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461 (1938). These factors are appropriate also in determination of whether a client has consented to multiple representation.

Paul Weiss attorneys were called as witnesses at the hearing on Turkish's motion to dismiss, but Paul Weiss itself was not a party and hence did not participate in the examination of witnesses or in the presentation of evidence. I make no finding, therefore, with respect to whether Paul Weiss' representation during the investigation accorded with the requirements of Disciplinary Rule 5-105, except to note that I have not found, and counsel have not drawn my attention to, any cases in which the question of multiple representation in the course of the initial stages of a criminal investigation has attracted judicial scrutiny.

The Code can also be read to place responsibility upon the prosecutor with respect to multiple representation in a criminal investigation. Canon 1 imposes upon every lawyer — this would include prosecutors — the duty to "Assist in Maintaining the Integrity and Competence of the Legal Profession." Violation of DR 5-105 constitutes a violation of Disciplinary Rule DR 1102(A), which provides that "A lawyer shall not Violate a Disciplinary Rule." Under Disciplinary Rule 1-103(A), "[a] lawyer possessing unprivileged knowledge of a violation of DR 1-102 shall report such knowledge to a tribunal or other authority empowered to investigate or act upon such violation." See also Estates Theatres, Inc. v. Columbia Pictures Indus., Inc., supra, 345 F. Supp. at 98.

In the situation where an indictment has been filed, the case is then before a court, and if a defense counsel is involved in multiple representation in apparent violation of DR 5-105, the government must notify the court. See DR 1-103(A). Where no indictment has been filed and the conduct is not in connection with an appearance before a grand jury, recourse to the court is difficult. And since there is an active criminal investigation under way, it is also difficult to identify any appropriate "other authority empowered to investigate or act upon such violation" — the secrecy which a criminal investigation requires might prevent recourse to any grievance committee.

In most instances, the prosecutor will not know whether or not defense counsel has raised with his clients the conflict problem. He therefore will not know whether DR 5-105 and so DR 1-102 have been violated and whether it is necessary to alert the client. Some supplemental procedure is necessary to anticipate — and to provide against — conflicts of interest which may inhere where there is multiple representation of those called in connection with a pre-grand jury criminal investigation. In such situations, in my judgment, the prosecutor should initially raise the question of the danger of conflict of interest in connection with multiple representation with the attorney who represents several clients and, if that does not prove fruitful, with the clients themselves. See, e. g., Securities Exchange Com'n. v. Csapo, 174 U.S.App. D.C. 339, 343, 533 F.2d 7, 11 (1976) (Lumbard, J., sitting by designation): "The SEC properly fulfilled its duty by informing those who came before it whether their lawyer had appeared on behalf of others and, if so, the possible conflicts which might arise."

The prosecutor's action or actions should be memorialized in written memoranda. If he has contact with the clients, it should if possible take place in the presence of the clients' attorney. Moreover, the prosecutor should limit the communication to the clients to raising the prospect of a conflict of interest and should refrain from discussing the subject matter of the representation.

V

However, the failure by the prosecutor earlier to raise the conflict problem with Turkish is not grounds, in the context of this case, for the dismissal or suppression sought by Turkish.

Turkish is an intelligent, experienced individual who goes about the selection of lawyers very carefully. Although Paul Weiss was retained by Bear Stearns, Turkish had had prior experience with that law firm: Kleinbard of Paul Weiss, who worked on the Bear Stearns and Turkish representations in connection with the Crude Oil investigations, had previously been retained by Turkish to represent him in a personal matter. Turkish knew very well that Paul Weiss would be representing Bear Stearns and other Bear Stearns officers and employees. He knew that Paul Weiss' posture in the representation would be one of cooperation with the District Attorney's Office since he was consulted with respect to, and participated in the adoption of, that posture. At that stage both Turkish and Bear Stearns denied (as Turkish does today) any knowledge of wrongdoing. Bear Stearns acted in the Crude Oil Market only through Turkish, and both were professedly interested in seeing the District Attorney's Office educated in the intricacies of commodities trading in general and the Crude Oil Market in particular so that its representatives would be persuaded that there was no wrong-doing and would go away.

There was no evidence submitted at the hearing of actual conflict of interest. To the extent that there was a potential conflict of interest, I find Turkish was aware of it. He chose to continue to have Paul Weiss represent him, thereby waiving any objection he might have to that representation.

No evidence was offered at the hearing before me of any specific damage which has been suffered by Turkish as the result of the multiple representation. Thus there was no evidence that the District Attorney (or the government) has received information which it would not otherwise have received, nor that Turkish followed a course of conduct during the pre-indictment stage which he would not otherwise have pursued. There is no evidence that Paul Weiss represented him otherwise than it would have represented him if he had been its only client.