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Afghanistan Withdrawal Signals End Date to Police Wartime Fraud

Aug. 30, 2021, 10:02 AM

The end of direct U.S. military involvement in Afghanistan may finally provide an end date for when federal prosecutors could bring wartime criminal fraud cases—30 years after the fraud occurred.

Under the Wartime Suspension of Limitations Act, enacted in 1948, statutes of limitation don’t start to run until “5 years after the termination of hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress.”

Statutes of limitation for fraud generally are five years, but that period doesn’t begin until the separate 5-year WSLA period ends.

That means prosecutors have up to ten years until after the end of a war to bring criminal fraud charges. If a war doesn’t end, neither of those filing periods can start, and the window for the government to pursue a case grows bigger and bigger.

The U.S.'s expansion of war powers since World War II has made it possible to put potential defendants in “perpetual limbo,” something Congress probably didn’t anticipate, the Ninth Circuit said in a recent case.

But now with the Afghanistan military mission concluding, this seemingly endless window to prosecute wartime contract fraud may get closing dates.

End in Sight?

President Biden on July 8 announced the military mission in Afghanistan would end Aug. 31, nearly 20 years after 9/11 and Congress’ war authorization. Despite the collapse of the Afghan government and challenges evacuating civilians that include an attack at Kabul’s airport, Biden plans to stick to the deadline.

The July 8 announcement came shortly after an appeals court voiced concern that America’s post-9/11 conflicts were leaving criminal defendants open to liability decades after their conduct under the WSLA.

In concluding that several kickback scheme counts against a former DOD official were timely, the U.S. Court of Appeals for the Ninth Circuit said the WSLA “unambiguously tolls the statute of limitations during any period of war or authorization of the use of the Armed Forces.”

But the court was “acutely aware—and somewhat concerned” that interpreting the WSLA in this way might toll the statute of limitations “for 20, 30, even 40 plus years,” it said in United States v. Nishiie on May 12.

Biden’s announcement will most likely mark the termination of hostilities under the WSLA, said Paul Swanson of Holland & Hart LLP in Denver. Swanson has written about the WSLA.

“Even if a formal ‘proclamation’ is not signed, this announcement provides the clear, public statement the act was intended to elicit from one of the political branches,” he said.

“Formal, public words, paired with deeds, should do the trick,” he said.

“I have to think President Biden’s expected announcement that the U.S. military involvement in Afghanistan has ended would suffice, assuming he gives ‘notice to Congress,’ which I understand to be a ministerial act,” said Anthony E. Fuller of Hogan Lovells in Boston and a former federal prosecutor. Fuller represented the government in a 2008 case where a district court ruled that the Afghanistan and Iraq wars ended in 2001 and 2003. Appeals courts have rejected that conclusion.

There would be no practical reason for a court to rule otherwise because the U.S. will have no military presence in Afghanistan, Fuller said.

If so, the WSLA’s five-year suspension period would start this year. Statutes of limitation would then start to run in 2026. With the usual five year statute of limitations for fraud, prosecutors would have until 2031 to bring a timely criminal fraud case, even for frauds that happened at the very beginning of the Afghanistan conflict—in 2001.

Iraq

And that’s even if the window closes. There may be complications suggesting the window could remain open, one of them being Iraq.

Congress issued two Authorizations for Use of Military Force, one for the Afghanistan war in September 2001, and one for the Iraq war in October 2002.

Even if the Afghanistan war is terminated, the AUMF for the Iraq War would probably still remain in effect and operate to continue the statutes of limitation under the WSLA, said Alexander F. Porter of Davis Wright Tremaine LLP in Los Angeles. Porter has also written about the WSLA.

“The Ninth Circuit in Nishiie was operating under the assumption that the WSLA is still in effect based on both the Afghanistan and Iraq AUMFs,” he said.

“As of today, the AUMFs for the wars in Afghanistan and Iraq still stand, and either one is sufficient to toll the statute of limitations,” said Christopher Peele of Ashcroft Sutton Reyes LLC in Austin, a former prosecutor. Peele represented the government in a WSLA case before the Fifth Circuit in 2012.

“Real life moves faster than jurisprudence, however, and the recent developments in Afghanistan provide a plausible basis for a court to revisit this issue,” he said.

Swanson, however, said the Iraq war ended last decade as far as the WSLA is concerned when then-President Obama announced the end of combat in 2010 and withdrew troops in 2011.

“Troops returned for ISIS-related missions later in the decade, and it sounds like Biden is promising to bring those troops back in part to provide some political cover for Iraq’s leadership,” Swanson said.

“But I don’t think the current troop presence in Iraq has any bearing on WSLA,” he said.

“Once the Afghanistan combat-troop presence is withdrawn, that ‘war’ will end too, and I think that the five-year WSLA wind-down starts,” he said.

Clear Requirements

Another complication is how appeals courts have found the WSLA has very clear and formal requirements for what it takes to end a war that arguably can’t be satisfied by a mere presidential speech.

The Eleventh Circuit in 2015 ruled in United States v. Frediani, for example, that the WSLA’s suspension of limitations was still in effect because of ongoing fighting in both wars. This made allegations that a contractor’s sales manager committed aircraft parts fraud timely under a 5-year statute of limitations despite his assertion that the conduct occurred seven years before the suit was filed.

A presidential proclamation must be published in the Federal Register, as President Truman did to mark the end of World War II, the Eleventh Circuit said. No president had issued such a proclamation with regard to Afghanistan or Iraq, it said.

The government can pursue a contracting fraud case until there is a formal presidential proclamation, said Cary O. Aronovitz of Holland & Knight LLP in Miami, a former prosecutor who represented the government in Frediani.

And the Fifth Circuit in 2012 ruled in United States v. Pfluger that the WSLA made fuel contract kickback claims against an Army lieutenant colonel timely even though the indictment was filed in 2010 and the conduct took place in 2003 and 2004. Combat in Afghanistan and Iraq was clearly ongoing in 2004, the court concluded.

Both appeals courts rejected the reasoning in a 2008 opinion by Judge Richard G. Stearns for the U.S. District Court for the District of Massachusetts, in United States v. Prosperi. There, the court determined that for WSLA purposes hostilities ended in Afghanistan in December 2001 when the U.S. recognized the Karzai government; and ended in Iraq in May 2003 after President George W. Bush’s “Mission Accomplished” speech.

Courts can’t “demarcate the end of hostilities. The statute makes clear that the political branches must make that determination,” the Eleventh Circuit said.

“Any policy concern for subjecting defendants to decades-long liability is subordinated to the WSLA’s unambiguous language,” the Ninth Circuit said in Nishiie.

The Ninth Circuit confirmed the WSLA is still actively tolling statutes of limitation for certain crimes against the government that occurred approximately 20 years ago, Peele said.

Fuller said that without a proclamation in the Federal Register, the DOJ could argue indefinitely that, as a technical matter, the wartime suspension of limitations still applied, as the Eleventh Circuit decided.

But “that’s a tough sell the further and further away we get from combat operations in Afghanistan,” he said.

To contact the reporter on this story: Daniel Seiden in Washington at dseiden@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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