FCPA sentencing transcripts are interesting and informative reads. Although there have been several recent FCPA trials, sentencing remains one of the few areas of FCPA enforcement in which someone other than the DOJ passes judgment on a FCPA defendant. Although the DOJ has secured a few long sentences recently (see here), general trends demonstrate that sentencing judges often do not see FCPA enforcement actions the same way the DOJ does.
Case in point, Judge Ellen Huvelle’s (D.D.C.) recent sentence of Ousama Naaman, the former agent of Innospec. See here for the prior post regarding Naaman’s 2010 plea. As noted in this prior post, the DOJ recommended a 90-month sentence for Naaman. However, as noted in this DOJ release, Judge Huvelle gave Naaman a 30-month sentence. That is a meaningful rejection of the DOJ’s position in-and-of-itself.
It is clear from reading the transcript that the DOJ wanted Judge Huvelle to follow its recommendation to establish a benchmark for future cases. Indeed, the DOJ has frequently made this argument in prior sentencing hearings ( i.e. Judge you need to give a stiff sentence because what you do in this case will affect future individual sentences).
During the hearing Nathaniel Edmonds (DOJ) stated as follows. “[W]hat this Court does with respect to Mr. Naaman will set a benchmark of what other courts will do, and that has an impact.” […] [W]e are bringing more of these enforcement efforts, other judges will look to what this court does with respect to Mr. Naaman and then sentence others below him if they believe their conduct is not as egregious.”
The DOJ then cited the usual statistics regarding corruption. “[T]he World Bank estimates that corruption is three percent of the world economy; a trillion dollars of bribes every single year. That is not something that the U.S. Government, even working with all of our foreign partners around the world, can scratch the surface in enforcing. The only way to try to change the corrupt conduct, to try to change the behavior is to change businesses, to change individuals from conducting, from choosing to commit these crimes of choice.”
Judge Huvell then stated as follows. “This analogy is not apt. And I don’t mean to suggest it’s like drugs, but, you know, the American companies want to do the business, and they engage in these practices to get the business and hire people to help them get the business. It’s like the demand in this country for drugs. We are not willing to give up operating in these countries, to say the least; nor should we. But you know, you are looking at a way to solve the problem that is somewhat limited in your vision, it seems to me. I mean, I cannot take this position that I, in some way, am really solving a large, worldwide problem of corruption. If you go to any other part of the world, the American companies want to participate, and they engage in practices that we have outlawed for good reason. I understand that. But just — I am not going to take on my shoulders what you are trying to put. I just don’t see it that way.”
Edmonds then stated as follows. “Let me just state very clearly that we have gone from a nascent fight against corruption where the Department of Justice was doing it essentially by itself, where we have now broadened that where Russia has passed new laws. China has passed new laws. I would not say that our vision, the U.S. Department of Justice’s vision, is short. It would say it’s long-term. This is not a project which is going to be five years. It is not a project that’s ten years. This is a project which is thirty years. And that Your Honor, I think, is the most important thing to remember, that your sentence with Mr. Naaman will last beyond any period of incarceration that Mr. Naaman faces, that what you have here will serve as precedent for the U.K., because the U.K. will key off the decisions and the sentence that you have for Mr. Naaman …”.
Judge Huvell refused to bear the cross the DOJ wanted her to bear just because some other judges in the world might follow her lead. Judge Huvell then stated as follows. “It is a mixed, sort of complicated situation. I, for one, have traveled a lot in this world, and it is very complicated to say that our morality is necessarily that of other peoples. And I don’t suggest that we should not try. But to say that in the early 2000’s, that I should ignore context, that because Iraq has contributed — or collaborated with us in order to clean it up — [Naaman] cannot be the poster child that Mr. Edmonds [DOJ] would like.”