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SFO Given Green Light to Complete Plea Agreement With BAE

An additional development from the U.K. to report. A previous post (see here) discussed the efforts of Corner House Research and Campaign Against Arms Trade, two British non-profits, to derail the SFO’s plea agreement with BAE.

Earlier this month, a U.K. High Court prohibited the SFO “from taking any steps in its prosecution of BAE” “until the determination of the application for permission to apply for judicial review or further order.”

As is being reported today, the permission to apply for judicial review has been refused. In a two-page order, the judge wrote that: “it is only in the most exceptional case that the court will think it right to interfere with a prosecutorial decision such as this;” that the SFO “applied the guidelines … properly” and that the SFO’s decision to resolve the matter in the way it did was not “unlawful.”

According to this release, Corner House and Campaign Against Arms Trade “are taking legal advice on whether or not to appeal the decision.”

A spokesperson for one of the groups said that “we are obviously disappointed by the Judge’s decision to refuse permission,” and that the ruling “implies that the law allows a giant company to pay a small financial penalty for ‘accounting irregularities’ rather than be charged and tried in open court on more serious criminal charges.” According to media report, a BAE spokesperson said that this recent decision is “a matter between the two campaign groups and the SFO.”

In a related development (see here), Austrian prosecutors are reportedly continuing to investigate BAE’s agent Alfons Mensdorff-Pouilly. (See here for a prior post).

ALSTOM – Corruption Investigation Enters the Boardroom

The U.K. Serious Fraud Office (“SFO”) issued this release today which states that “[t]hree members of the Board of ALSTOM in the UK have been arrested on suspicion of bribery and corruption, conspiracy to pay bribes, money laundering and false accounting, and have been taken to police stations to be interviewed by the Serious Fraud Office.”

According to the release, search warrants were executed at five ALSTOM businesses premises and four residential addresses. The operation, involving “109 SFO staff and 44 police officers” is code-named “Operation Ruthenium” and centers on “suspected payment of bribes by companies within the ALSTOM group in the U.K.” According to the release, “[i]t is suspected that bribes have been paid in order to win contracts overseas.”

SFO Director Richard Alderman, in a very DOJ-like statement, noted that “[t]he SFO is committed to tackling corruption” (presumably so long as it does not involve BAE) and that the SFO is “working closely with other criminal justice organizations across the world” and is “taking steps to encourage companies to report any suspicions of corruption, either within their own business or by other companies or individuals.”

ALSTOM (see here) “is a global leader in power generation and rail infrastructure.” One of the company’s major competitors is Siemens. ALSTOM’s shares are listed on the Paris Stock Exchange.

Daimler – Yet Another Bribery, Yet No Bribery Case

In a criminal information filed yesterday (see here) in U.S. District Court for the District of Columbia, the DOJ alleges that:

“[b]etween 1998 and January 2008, DAIMLER made hundreds of improper payments worth tens of milions of dollars to foreign officials in at least 22 countries – including China, Croatia, Egypt, Greece, Hungary, Indonesia, Iraq, Ivory Coast, Latvia, Nigeria, Russia, Serbia and Montenegro, Thailand, Turkey, Turkmenistan, Uzbekistan, Vietnam, and others – to assist in securing contracts with government customers for the purchase of DAIMLER vehicles valued at hundreds of milions of dollars. In some cases, DAIMLER wired these improper payments to US. bank accounts or to the foreign bank accounts ofU. S. shell companies in order to transmit the bribe. In at least one instance, a US. shell company was incorporated for the specific purpose of entering into a sham consulting agreement with DAIMLER in order to conceal improper payments routed through the shell company to foreign governent offcials. Certain improper payments even continued as late as January 2008. In all cases, DAIMLER improperly recorded these payments in its corporate books and records.”

However, in what is becoming a distubring and troubling new norm (i.e. Siemens, BAE) Daimler was NOT charged with FCPA antibribery violations.

Stay tuned for additional analysis of the 78 page criminal information.

Potpourri

Back in active blogging “mode” here on the campus of the Sweet 16 bound Butler Bulldogs after an enjoyable few days in Washington D.C. where I participated in Georgetown Law’s Combating Global Corruption Conference. It was nice to see some familiar faces, connect faces to some names I have met through this blog, and to meet new people. The title of my presentation and upcoming paper in the Georgetown Journal of International Law is “The Facade of FCPA Enforcement” and I will post in the coming days a short abstract of the paper as well as my presentation slides.

In the meantime, some items of note.

Africa Sting

Christopher Matthews at Main Justice continues to follow the Africa Sting case and has this report of yesterday’s hearing.

Shearman & Sterling Update

Shearman & Sterling pioneered the concept of keeping track of FCPA enforcement actions in an “FCPA Digest” (see here) and it supplements the digest with occasional “Recent Trends and Patters” update. For the latest, see here from Philip Urofsky & Danforth Newcomb.

FCPA Compliance in Phnom Penh

Looking for additional evidence that the FCPA is indeed a hot topic. How about this article from Phnom Penh Post of Cambodia. As noted in the article, a recent FCPA seminar, hosted in part by the American Chamber of Commerce, attracted more than 100 local business leaders.

I wonder if anywhere in the discussion of Siemens and/or BAE the point was made that neither of these entities were charged with FCPA antibribery violations?

Further, I remain perplexed by the curious (and frequent) tendency of FCPA conferences including representatives from FCPA violators – a regional compliance officer for Siemens Singapore presented at the seminar.

Polish Up The Resume

Do you know a thing or two about the FCPA?

Does foreign bribery enforcement policy interest you?

Do you like to design and conduct FCPA training sessions?

Do you like to publicly speak on FCPA issues?

If you answered yes to these questions, the DOJ has a job for you!

Title – Deputy Chief, Fraud Section – FCPA.

The current DOJ Deputy Chief, Fraud Section – FCPA is Mark Mendelsohn. His pending departure has been discussed and confirmed for some time now.

Last Friday, DOJ posted this job opening.

Looking for an extra perk? You will be covered by this, and other, blogs!

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