Although FCPA Professor has highlighted several examples, Adam Davidson’s recent New Yorker article about the Trump Organization in Azerbaijan (see here for the original post highlighting several concerns about the article) and his subsequent comments and writing about the matter are in a league of their own.
In the article, Davidson asserts:
“[T]he Trump Organization may have broken the law in its work with the Mammadov family. The Foreign Corrupt Practices Act, passed in 1977, forbade American companies from participating in a scheme to reward a foreign government official in exchange for material benefit or preferential treatment. The law even made it a crime for an American company to unknowingly benefit from a partner’s corruption if it could have discovered illicit activity but avoided doing so.”
From there, Davidson uses selective quotes and information to support his narrative.
As I highlighted in this original post about the article, there were several aspects of it from an FCPA perspective that were concerning. When I began to participate in Twitter conversations last week about the article, Davidson went on a Twitter rant about my comment:
“Spoke to the journalist for 45 minutes, he didn’t like the answers I gave and said I was in “defense mode” I told him I was in “law mode”
Best I can tell, Davidson has deleted his responses, but I captured images of them in relative real time.
In short, Davidson publicly stated that my concerns with the legitimacy and/or viability of an FCPA enforcement action against Trump / Trump Organization were “unique to [me]” that “no one else shared them” and were “according to [me] and [me] alone so far.”
In case you are wondering, in response to Davidson’s statement “you are not the law” I responded “Correct, what the FCPA means is what the FCPA says and how courts have interpreted it.”
Fast forward to the days after Davidson’s article during which he made the media rounds talking about this article.
In an NPR interview, the following exchange occurred:
NPR: This law, the Foreign Corrupt Practices Act, is clearest when an American bribes a foreign official. And the Trump Organization told you the money is going the other way, that they’re actually profiting from this. So what could actually be illegal here?
DAVIDSON: So this is actually a debate. I’d say nearly every expert in the FCPA said it’s very possible there was a violation here. But several said it would be tricky to prove it because you would need to show that the Trump Organization profited through the corruption that they enabled through giving something of value to a foreign corrupt official.
That’s a mouthful. But the Trump Organization’s assertion is, hey, we didn’t give them anything of value. It doesn’t have to be money, just anything of value. And they gave their name, their reputation, their brand value. And as we know, the president values his – the brand value of his name very highly. And – and that put a sheen, a kind of American-safe sheen to an otherwise corrupt operation.
SHAPIRO: So it sounds like a tough case.
DAVIDSON: I think it’s a very tough case. And, you know, the Department of Justice tends to like home runs. They like – they tend to like 100 percent cases, 98 percent cases. They don’t like tough cases. But I think when it’s the president of the United States, it’s very different than if it’s a case against, you know, just some generic real estate developer.
And we, the American people, need to know, is our president in business with really shady people? Do really shady people have information about him? That’s a different kind of need than the decision-making process that normally goes into one of these prosecutions.”
Similarly, in responding to questions about the article, Davidson stated in response to the below question:
“Why hasn’t he been charged and why haven’t there been investigations under the Foreign Practices law? —@m4ndypants
If the Trump Organization were nothing more than a relatively small (though famous) development/licensing firm in Manhattan, it is highly unlikely that this case would ever be prosecuted. It’s an extremely difficult case to win, requiring a lot of investigation in a country—Azerbaijan—that has little incentive to help investigators. And it’s a relatively small-potatoes case, compared to the multi-billion-dollar examples of corruption that F.C.P.A. prosecutors typically go after. [Here again, Davidson exhibits poor knowledge of overall FCPA enforcement activity]. Several former D.O.J. prosecutors told me that if a junior prosecutor presented this case to her bosses at Main Justice, they would tell her to find an easier, more promising case to work on.
My view is that Trump becoming President transformed this from a challenging, obscure case into a crucial one that requires a special prosecutor or other type of independent investigator. The point is less about whether or not the Trump Organization violated a particular law and far more about the nature of the company’s relationships with corrupt officials in countries all over the world. We know they have such relationships, but we don’t know much about them.”
In other words, as Davidson’s own comments make clear, several FCPA experts and/or former DOJ prosecutors apparently expressed reservations about the legitimacy and/or viability of an FCPA enforcement action against Trump / Trump Organization.
However, and this is the salient point, you will find none of this in Davidson’s extensive piece published in the New Yorker.
In addition, one concern I raised in my initial post about the article was that Davidson seemed to imply a casual relationship between the Baku deal being finalized and Trump’s 2012 statements about the FCPA.
As I wrote:
“Sorry to spoil the implied causation, but here are the facts concerning the context of Trump’s 2012 remarks (as previously discussed on FCPA Professor numerous time). Trump’s mid-May 2012 comment came at the height of public awareness of Wal-Mart’s FCPA scrutiny – scrutiny focused on alleged payments in Mexico to obtain various licenses and permits. Indeed, Trump’s comments (the video is here go the approximate 14 minute mark) were made in the context of a discussion about Wal-Mart’s scrutiny.”
In responding to questions about the article, Davidson stated in response to the below question:
“Minor detail … but is there a reason @adamdavidson didn’t say Trump’s call re: bribes was referring to a Walmart case? #context —@bleu_ruby
As I wrote in my article, Donald Trump discussed the F.C.P.A. during an appearance on CNBC’s Squawk Box, in May, 2012, the same month that his company finalized its deal in Azerbaijan. It’s true that his comments came after other commenters discussed a case of Walmart potentially violating the F.C.P.A. in Mexico. However, Trump spoke broadly and clearly about the law, in general, and about how paying bribes was the cost of doing business globally. He voiced specific concerns about the law that suggest it was on his mind. That his comments came after a discussion of Walmart didn’t seem relevant to me.”
One writes an article about a specific person and his specific business organization and includes specific comments this specific person made about the FCPA in attempt to link these comments to a narrative in the story, but the context of the comments “didn’t seem relevant.”?
You gotta be kidding me.
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