U.S. v. Hoskins And The Big Picture
This prior post highlighted the Second Circuit’s recent decision in U.S. v. Hoskins in which the court rejected the DOJ’s expansive jurisdictional theory of prosecution against Lawrence Hoskins, a U.K. national.
This post continues the analysis by highlighting various “big picture” issues.
Legislative History Matters
In large part, the Second Circuit’s opinion was based on the FCPA’s legislative history demonstrating once again that legislative history matters.
Second Circuit Rejects DOJ’s Expansive Jurisdictional Theory Of Prosecution In U.S. v. Hoskins
Appellate decisions construing the Foreign Corrupt Practices Act are extremely rare. Thus, many in the FCPA community have been awaiting the Second Circuit’s long-awaited (oral argument was held in March 2017 – see here) decision in U.S. v. Hoskins.
In this decision, the court rejected the DOJ’s expansive jurisdictional theory of prosecution against Lawrence Hoskins, a U.K. national. In many respects, the Second Circuit’s decision was based on the FCPA’s legislative history – demonstrating once again that the legislative history matters (see here for a prior post).
Firtash Files Motion To Dismiss DOJ FCPA And Related Charges Brought In 2014
As highlighted in this prior post, in April 2014 the DOJ announced the unsealing of a criminal indictment charging six individuals “with participating in an alleged international racketeering conspiracy involving bribes of state and central government officials in India to allow the mining of titanium minerals.”
Among those charged was Dmitry Firtash, a high-profile Ukrainian businessman.
Prior to the April 2014 unsealed indictment, Firtash was arrested in Austria and thereafter paid $174 million to post bail. Responding to the U.S. criminal charges, as noted in this prior post, Firtash released a video which insisted he is an innocent party caught at the center of a “battlefield for the two biggest global players of Russia and the USA.”
A Case Study In Risk Aversion Or What Happens When Defendants Fight Back
[This post is part of a periodic series regarding “old” FCPA enforcement actions]
Previous posts here and here highlighted the 2001 DOJ/SEC FCPA enforcement action against KPMG Siddharta Siddharta & Harsono (KPMG-SSH) and Sonny Harsono and Baker Hughes regarding alleged improper payments in connection with an Indonesia tax assessment. All of the defendants resolved the enforcement actions without putting the DOJ/SEC to its burden of proof (the risk aversion portion of this post).
However, also in 2001 the SEC charged Eric Mattson (the former CFO of Baker Hughes) and James Harris (the former Controller of Baker Hughes) with Foreign Corrupt Practices Act offenses based on the same substantive allegations. Unlike the other defendants, as highlighted in this post, Mattson and Harris fought back – a process that resulted in a federal court judge dismissing the FCPA charges against them.
Other Recent Supreme Court Rebukes Of Enforcement Theories Relevant To FCPA Enforcement
U.S. v. McDonnell – the unanimous Supreme Court decision earlier this week vacating the former Virginia governor’s criminal convictions – was relevant to Foreign Corrupt Practices Act enforcement because the key issue in McDonnell , the proper meaning of the term “official action,” is term that also appears in the FCPA’s anti-bribery provisions.
In the FCPA’s nearly 40 years of existence, the Supreme Court has never addressed an FCPA issue. It is unlikely that the Supreme Court will address an FCPA topic anytime soon because of how the government has chosen to enforce the FCPA (the vast majority of corporate enforcement actions are resolved without any meaningful judicial scrutiny and the vast majority of corporate enforcement actions lack individual prosecutions)
Thus, when thinking about how the Supreme Court might address certain FCPA issues, one has to analogize to other relevant Supreme Court decisions.
This post highlights other recent Supreme Court decisions, in addition to McDonnell, to rebuke enforcement theories relevant to FCPA enforcement.