I'm not a very sympathetic character," admits Larry Duncan, a veteran of the oil patch who's rarely looked for sympathy. He certainly received none from a federal jury, which 16 months ago convicted him of violating the U.S. trade embargo against Libya. Since then, Duncan's been relegated to legal purgatory, chain-smoking his way through the months while waiting to receive his sentence from U.S. District Judge Lynn Hughes.
Duncan had run afoul of the International Emergency Economic Powers Act, a federal law that grants the president authority to deal with "unusual and extraordinary" foreign threats to national security. In 1986, President Reagan, in retaliation for Libyan-sponsored acts of terrorism, invoked the law to ban U.S. trade with Libya. Duncan now contends that Reagan -- and every other president who's invoked the IEEPA -- wrongfully usurped the power of Congress. That's not exactly a novel argument: Executives of major American oil companies have publicly criticized the unilateral economic sanctions that prevent the companies from doing business with Libya and the other blacklisted countries.
But the 59-year-old Duncan isn't an executive of a large oil company, nor is he a gentleman who enjoys arguing the fine points of constitutional law. He's a beer-swilling former roughneck with a ready command of expletives -- and apparently, a midlevel wheeler-dealer being made to suffer for corporate transgressions.
In 1991, after Duncan's small oil-service company lost its major client, he took a job with D&G Oilfield Services, which was owned by an old friend, Terry Kirk. D&G assigned Duncan to handle the needs of Rompetrol, the national oil company of Romania.
Rompetrol was interested in drilling for oil in the deserts of northern Africa. But there was a problem: A drilling operation's machinery consumes large amounts of diesel fuel, and the cost of transporting diesel to remote areas can be prohibitive. Rompetrol wanted a technical solution: a "topping plant" -- basically, a small, portable refinery -- that could produce the fuel on-site by refining the crude pumped from the ground.
Duncan bought a topping plant from a Houston company, Basic Equipment and Supply -- a perfectly legal transaction. But when he arranged to ship the plant to Rompetrol's North African headquarters in Tripoli, he violated the trade ban.
Duncan contends that the plant was ultimately destined for Algeria, not Libya, but federal prosecutors make a convincing case that Duncan was actively seeking a way around the law. During his trial, they described the plant's convoluted shipping route -- including ports in England and Italy -- as an effort to conceal the plant's eventual destination. They pointed out that Duncan bought the plant not as a representative of D&G, but under the name of his old Mexican venture, Petroserv -- another attempt at camouflage. And most damning of all, they introduced a note found in Duncan's briefcase in July 1992. In the note, Duncan told a business associate that it would be safer to ship the topping plant out of Mexico rather than the U.S., lest it be confiscated by Customs.
The jury was unanimous in voting to convict Duncan, who could receive up to 51 months in prison. Since 1992, the Justice Department has filed charges in 22 cases for violations of the International Emergency Economic Powers Act. (Twelve of those cases, like Duncan's, involve alleged trade with Libya.) Of the individuals accused, 19 have received jail time, one was acquitted and another died before going to trial. In four cases, the defendants received only fines. Still pending are the trials of eight people -- including chess champion Bobby Fischer, accused of participating in a $5 million dollar chess match in violation of the IEEPA.
Duncan was added to that list in 1994, when he and two higher-ranking D&G officials -- owner Kirk, an American citizen, and his associate Ian Beckford, a Brit -- were indicted in the topping plant case. In the two and a half years since, both Kirk and Beckford have remained fugitives outside the U.S. Realizing that the two might never return to stand trial, the Justice Department agreed not to prosecute the two as individuals -- meaning that neither would face jail time. In exchange, the pair agreed to have their company plead guilty and pay a $100,000 fine. Kirk and Beckford also forfeited any claim to the topping plant, which the government had seized. (The arrangement must still receive the approval of Judge Hughes.)
Houston attorney Joel Androphy represents Kirk and Beckford. Although he was happy that his clients will probably avoid jail time, he says that the possible incarceration facing Duncan is reflective of the Justice Department's penchant for sticking it to the little guy.
Certainly, corporations have admitted worse transgressions without anyone's serving time. In July 1995, Dallas-based Halliburton pleaded guilty to charges that officials of Welex, one of its Houston divisions, violated the Libyan trade sanctions three times by exporting pulse neutron generators, radioactive tools used to measure the porosity of potential wells. Though government officials claimed that the generators could have been used to detonate nuclear weapons, no Halliburton officials were charged. Instead, the company simply agreed to plead guilty to exporting products to Libya without a license and paid a $3.8 million fine.
"Those who are the most vulnerable and the least able to defend themselves are the individuals who often seem to be the targets of government prosecution," says Androphy. "And it's really nonsensical to go after a Larry Duncan, who was such a small cog in this alleged operation. But Larry Duncan doesn't have the financial ability to buy off the prosecution."
With the help of a federally appointed public defender, Duncan is attempting to have his conviction set aside on grounds that the International Emergency Economic Powers Act is unconstitutional.
So far, Hughes has yet to rule on the matter; some observers believe the 16-month delay in sentencing indicates that the judge is carefully considering the constitutional question. But the judge has also indicated that he may lean toward the defense's argument. During a hearing in February 1996, Hughes expressed reservations about a law that allows the president, rather than Congress, to determine which countries Americans can trade with.
The judge then ordered both sides to provide him with briefs supporting their positions on the constitutionality of the International Emergency Economic Powers Act.
"We feel it gives unfettered discretion to the president to decide what is a crime and when it would be a crime," says federal public defender Thomas Berg, who represents Duncan. "That is something Congress normally does when it enacts a penal statute. We feel that this particular statute, which allows the executive branch to fill in the blanks, violates the separation of powers doctrine and is an unlawful delegation of authority by Congress."
Justice Department attorneys decline to comment on the matter, but, in documents they have submitted to the court, they point out that Congress reviews the law every two years.
If Hughes rules in Duncan's favor, the government would almost certainly appeal to the 5th Circuit. The case could eventually be heard by the Supreme Court.
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Meanwhile, Duncan continues to live with legal uncertainty. From the time of his indictment until late last year, Duncan says he was unable to work in the oil business because his problems with the federal government had ruined his reputation. He spent that time living in a friend's garage apartment.
For much of his life Duncan had worked in the oil fields of South America and Mexico. After his conviction Duncan's passport was confiscated by the government, further hampering his ability to work. Last December, however, Judge Hughes ordered that Duncan's passport be returned. Since then, Duncan says he's been back in the jungles of South America, managing an oil drilling operation. (He declines to be more specific.)
Temporary freedom doesn't satisfy Duncan. Since his legal problems began, he has rarely attempted to hide his contempt for the federal government -- especially those parts connected to his case, including prosecutors, the judge deciding his fate and even the public defender appointed to represent him. In the past two and a half years, he has become a prolific letter writer, peppering his correspondence to government officials and members of the media with suggestions of what federal authorities can do to various parts of their anatomies.
In a recent letter, Duncan urged Hughes to reach a sentencing decision soon: "Enough is enough, your honor. As I used to say when I settled my disputes with my fists, 'Let's get it on.'