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Six Months For The Greens … Plus The Friday Roundup

By on August 13, 2010 in China, Debarment, FCPA Sentences, Giffen, Greens, H-P, Reputational Damage, SciClone Pharmaceuticals, Siemens

In September 2009, Gerald and Patricia Green were found guilty by a federal jury of substantive FCPA violations, conspiracy to violate the FCPA, and other charges. According to the DOJ release (see here) the Los Angeles-area film executives were found guilty of engaging in “sophisticated bribery scheme that enabled the defendants to obtain a series of Thai government contracts, including valuable contracts to manage and operate Thailand’s yearly film festival.”

As noted in the DOJ release:

“The conspiracy and FCPA charges each carry a maximum penalty of five years in prison, and each of the money laundering counts carries a maximum penalty of up to 20years in prison. The false subscription of a U.S. income tax return carries a maximum penalty of three years in prison and a fine of not more than $100,000.”

Sentencing was originally set for December 17, 2009, was delayed several times, and, at one point, was removed from the calendar altogether (see here).

U.S. District Court Judge George Wu of the Central District of California reportedly wanted to learn more about other FCPA sentences as well as Mr. Green’s health issues.

The DOJ requested a 10 year sentence for both Gerald and Patricia Green.

The DOJ stated that the “court must decline defendants’ remarkable invitation to join the wholesale speculation of FCPA ‘pundits’ as to whether corporate settlements are ‘shielding’ to corporate executives from punishment.”

In closing, the DOJ urged the court to “disregard defendants’ efforts to obscure the landscape of FCPA sentencing, which generally reflects significant prison terms for convicted individuals.”

According to this report, Judge Wu yesterday sentenced the Greens, before a packed courtroom, to six months in prison, followed by three years probation (six months of which must be served as home confinement).

According to the report, Judge Wu “also set a restitution figure of $250,000” but “if the Greens, who have had their accounts frozen and assets seized since being arrested in 2007, can prove that none of the $1.8 million they paid in bribes to Thai officials can be recovered, then they will only have to pay $3,000 in restitution.”

Does the “landscape of FCPA sentencing” truly reflect “significant prison terms” as stated by the DOJ?

True, any prison term is significant for a defendant and his/her family and friends.

But with a top sentence of 60 months (Charles Jumet – see here), the 366 day sentence for Frederic Bourke in November 2009 (see here), the 15 month sentence for Jason Edward Steph and the 366 day sentence for Jim Bob Brown both in January 2010 (see here) and now the 6 month sentence for the Greens – is this yet another instance in which DOJ’s FCPA rhetoric does not match reality?

*****

H-P news that does not involve its former CEO, what others are saying about the Giffen Gaffe, SciClone’s stock drop, and Siemens $1 billion customer … it’s all here in the Friday roundup.

H-P Inquiry Escalates

According to a story in today’s Wall Street Journal by David Crawford, the DOJ “has asked Hewlett-Packard Co. to provide a trove of internal records as part of an international investigation into allegations that H-P executives paid bribes in Russia, according to people familiar with the investigations.”

According to the story, the DOJ request “came after German prosecutors complained H-P had refused to provide them with all of the records they requested” and after “H-P initially argued that the German request for bookkeeping records, some of which are five years old, imposed an ‘undue hardship’ on the company.”

The article indicates that the DOJ “asked H-P to comply voluntarily with the request and hasn’t subpoenaed the records” and that “H-P has yet to provide some records” but is “cooperating with the investigations.” According to H-P, the investigation
“involves people that have largely left the company and matters that happened as much as seven years ago.”

What Others Are Saying About Giffen

It’s been one week since the Giffen Gaffe (see here).

Here is what others are saying about the enforcement action that began with charges that James Giffen made “more than $78 million in unlawful payments to two senior officials of the Republic of Kazakhstan in connection with six separate oil transactions”, yet ended with a misdemeanor tax violation against Giffen and an FCPA anti-bribery charge against a functionally defunct entity (The Mercator Corporation -in which Giffen was the principal shareholder, board chairman, and chief executive officer) focused merely on two snowmobiles.

Scott Horton, writing at Harper’s Magazine (see here) noted that “[t]he outcome is a huge embarrassment to federal prosecutors, who had invested a decade in resources in the effort to convict Giffen of FCPA and related violations.”

Horton, who has been following the case for years, highlighted how the “case has been the focus of political manipulation concerns for years” and closed with this paragraph:

“Kazakhs have long claimed that their government’s strategy of resolving the Giffen case by using the right levers with the American administration–a process that led them to hire former attorneys general and high-profile retired prosecutors, private investigators, and public-relations experts–would be successful. The outcome in the Giffen case appears to ratify that view. The notion of an independent, politically insulated criminal-justice administration in America has just taken another severe hit.”

Steve LeVine, author of The Oil and The Glory page at Foreign Policy, noted (here) that the Giffen resolution is “a considerable comedown for the federal government” and that Giffen’s lawyer “understood correctly that he could set up a collision between the Justice Department and the CIA in which the latter would probably prevail.”

The FCPA and Stock Price

What affect, if any, does an FCPA disclosure or resolution have on a company’s stock price?

It’s an issue I’ve explored before (see here) and best I can tell the evidence is inconclusive and the answer is – it depends.

In the case of a company that does business almost exclusively in China disclosing an FCPA inquiry focused on China, the answer is that disclosure of the FCPA inquiry matters – and quite a bit.

On Monday, SciClone Pharmaceuticals Inc., a Delaware company based in California, disclosed in a 10-Q filing (here) as follows:

“On August 5, 2010 SciClone was contacted by the SEC and advised that the SEC has initiated a formal, non-public investigation of SciClone. In connection with this investigation, the SEC issued a subpoena to SciClone requesting a variety of documents and other information. The subpoena requests documents relating to a range of matters including interactions with regulators and government-owned entities in China, activities relating to sales in China and documents relating to certain company financial and other disclosures. On August 6, 2010, the Company received a letter from the DOJ indicating that the DOJ was investigating Foreign Corrupt Practices Act issues in the pharmaceutical industry generally, and had received information about the Company’s practices suggesting possible violations.”

SciClone’s business is focused primarily on China with 90+% of its revenue derived from China sales. Thus, it is not surprising that an FCPA inquiry focused on China had a material impact on the company’s stock price.

As noted in this Reuters story, news of the FCPA inquiry sent SciClone’s shares, at one point, down 41% to a 52 week low.

Siemens $1 Billion Customer

In December 2008, Siemens agreed to pay $800 million in combined U.S. fines and penalties to settle FCPA charges for a pattern of bribery the DOJ termed “unprecedented in scale and geographic scope.” According to the DOJ, for much of Siemens’ operations around the world, “bribery was nothing less than standard operating procedure.”

The Siemens enforcement action remains the largest FCPA settlement ever (even though Siemens itself was not charged with FCPA anti-bribery violations).

On the one year anniversary of the Siemens enforcement action, I ran a post – Siemens – The Year After (see here) which highlighted how the U.S. government continues to do substantial business with the company it charged with engaging in a pattern of bribery “unprecedented in scale and geographic scope.”

This U.S. government business has helped Siemens outperform its competitors in a difficult recessionary environment and much of the company’s recent success is the direct result of government stimulus programs around the world.

Using Recovery.gov (a U.S. government website designed “to allow taxpayers to see precisely what entities receive Recovery money ..”), I highlighted how several Siemens’ business units have been awarded several dozen contracts funded by U.S. taxpayer stimulus dollars.

It is against this backdrop that Paul Glader’s recent piece in the Wall Street Journal “Siemens Seeks More U.S Orders” caught my eye.

According to the article, Siemens Corp. (the U.S. division of Siemens) currently brings in about $1 billion a year from the U.S. government, a figure the division hopes to double by 2015.

Eric Spiegel, chief executive of Siemens Corp., is quoted in the article as saying: “[o]ne of the beauties of the federal-government spending is it didn’t drop off during the recession.”

To that, I’ll add that one of the unfortunate beauties of engaging in bribery the U.S. government terms “unprecedented in scale and geographic scope” is no slow down in U.S. government contracts in the immediate aftermath of the enforcement action.

It’s one of the FCPA greatest headscratchers – FCPA violaters are and remain some of the U.S. government’s biggest suppliers and contracting partners.

As I’ve noted in numerous prior posts, efforts are underway to try to change this. See here, here and here.

*****

A good weekend to all.

The Giffen Gaffe

By on August 9, 2010 in BAE, Bourke, FCPA Related Charges, FCPA Trials, Giffen, Kazakhstan, Mercator Corp, Oil and Gas Industry, State Department

Perhaps one day the true story will be told about the DOJ’s prosecution of James Giffen.

I don’t pretend to know what happened behind the scene other than to know that something significant occurred behind the scene.

That conclusion is compelled when an original indictment (see here) charging “Giffen with making more than $78 million in unlawful payments to two senior officials of the Republic of Kazakhstan in connection with six separate oil transactions, in which the American oil companies Mobil Oil, Amoco, Texaco and Phillips Petroleum acquired valuable oil and gas rights in Kazakhstan” is resolved via a one-paragraph superseding information (see here) charging a misdemeanor tax violation.

Sure, DOJ can say that it prosecuted a functionally defunct entity, The Mercator Corporation – in which Giffen was the principal shareholder, board chairman, and chief executive officer – with violating the FCPA’s anti-bribery provisions. Yet that criminal information (see here) merely alleges that “Mercator caused the purchase of two snowmobiles that were shipped to Kazakhstan for delivery to KO-2” (a senior official of the Kazakh Government).

You read that correctly.

From an FCPA perspective this entire, nearly decade-long prosecution, was reduced to allegations about two snowmobiles for a Kazakh official.

So what was that something significant that occurred behind the scene?

I don’t know.

But I do know this.

Part of Giffen’s defense was that his actions were taken with the knowledge and support of the Central Intelligence Agency, the National Security Council, the Department of State and the White House. The DOJ did not dispute the fact that Giffen had frequent contacts with senior U.S. intelligence officials or that he used his ties within the Kazakh government to assist the United States. With the court’s approval, Giffen sought discovery from the government to support such a public authority defense and much of the delay in the case was due to the government’s resistance to such discovery and who was entitled to see such discovery.

Perhaps it was that public airing of the information in these documents would be embarrassing to the U.S. government or impact U.S. foreign relations with a key oil and gas producing country.

If so, it is troubling to think that our government condones bribery, when done with the approval or the wink and nod of government officials, while aggressively prosecuting commercial actors – often times based on untested and dubious legal theories.

For the record, Giffen pleaded guilty (see here) last Friday to a one-count criminal information charging him with willfully failing to supply information on tax returns regarding foreign bank accounts in violation of 26 USC 7203. The information charges, and Giffen pleaded guilty to, filing a U.S. individual income tax return which failed to report that he maintained an interest in, and signature and other authority over, a bank account in Switzerland in the name of Condor Capital Management, a British Virgin Islands corporation he controlled. In pleading guilty, Giffen also relinquished right, title and interest he may have had, directly or indirectly, in several named Swiss bank accounts.

Pursuant to the plea agreement, Giffen’s sentencing range will be 0 to 6 months and the applicable fine range will be $250 to $5,000.

For the record, Mercator also pleaded guilty (see here) last Friday to a one-count criminal information charging it with violating the FCPA’s anti-bribery provisions. According to the information, Mercator “advised Kazakhstan in connection with various transactions related to the sale by Kazakhstan of portions of its oil and gas wealth.” The information alleges that between 1995 and 2000 Mercator was paid approximately $67 million in success fees for its work in assisting the Kazakh Ministry of Oil and Gas Industries develop a strategy for foreign investment in the oil and gas sector and coordinating the negotiation of numerous oil and gas transactions. The information charges that certain senior officials of the Kazakh government (including KO-2) had the authority to hire and pay Mercator and that Mercator was therefore “dependant upon the goodwill” of the officials. The one-paragraph statutory allegation merely states that Mercator “caused the purchase of two snowmobiles that were shipped to Kazakhstan for delivery to KO-2.”

As indicated in the plea agreement, the DOJ and Mercator could not agree on whether the 1998 Sentencing Guidelines or the 2009 Sentencing Guidelines apply – an issue that will be left for the court to decide. If the 2009 guidelines apply, the plea agreement sets forth a fine range of $650,000 to $1.3 million. If the 1998 guidelines apply, the plea agreement sets forth a fine range of $30,000 to $60,000.

Whether Mercator’s and/or Giffen’s actions were indeed taken with the knowledge and support of the Central Intelligence Agency, the National Security Council, the Department of State and the White House, the following paragraph from the Mercator plea agreement would seem relevant:

“Because the offense involved an elected official or a public official in a high-level decision-making or sensitive position, the offense level is increased 4 levels pursuant to U.S.S.G. 2C1.1(b)(3).”

That provision (see here) defines “public official” to include, among other categories, an individual “in a position of public trust with official responsibility for carrying out a government program or policy; acts under color of law or official right; or participates so substantially in government operations as to possess de facto authority to make governmental decisions.”

DOJ releases in FCPA enforcement actions are typically peppered with get-tough, this sends a message type of language. The release (see here) in the Giffen / Mercator enforcement action does not contain any quotes from DOJ officials.

William Schwartz of Cooley Godward Kronish LLP (here), a former Assistant United States Attorney in the United States Attorney’s Office for the Southern District of New York where he was Deputy Chief of the Criminal Division, represented both Giffen and Mercator.

So, what to make of the Giffen Gaffe.

It seems that Giffen prevailed not because of the facts or the law, but because he possessed significant leverage over the government in that he asserted his actions were taken with the knowledge and support of the Central Intelligence Agency, the National Security Council, the State Department and the White House.

Few FCPA defendants can make a similar claim. Thus, resolution of the Giffen case would seem to have little or no effect on the nuts and bolts of future FCPA enforcement actions.

Yet, resolution of the Giffen case does raise some troubling issues as to the DOJ’s enforcement of the Foreign Corrupt Practices Act.

For starters, the Giffen case and the Frederick Bourke case (see here for prior posts) generally marked the beginning of the FCPA’s resurgence. Regardless of the outcome of Bourke’s Second Circuit appeal, the trial phase ended with the sentencing judge saying:

“After years of supervising this case, it’s still not entirely clear to me whether Mr. Bourke is a victim or a crook or a little bit of both.”

In both the Giffen and Bourke cases, the DOJ made spectacular allegations only to see these enforcement actions end with a whimper.

The Giffen resolution would also seem embarrassing for the Justice Department which actively preaches the transparency and anti-corruption gospel message around the world while calling on other countries to increase enforcement of their own bribery laws.

However, what does it say about transparency in our country when a case that begins with criminal allegations of more than $78 million in unlawful payments to senior Kazakh officials ends with a misdemeanor tax violation and a largely meaningless FCPA enforcement action against a functionally defunct entity focused merely on two snowmobiles?

The Giffen resolution should further enrage segments of the business community that justifiably see a double standard in that certain business practices seem tolerated when done in connection with government business or policy, yet aggressively prosecuted, often times based on untested and dubious legal theories, when done in connection with a purely commercial transaction.

The Giffen Gaffe is troubling enough in isolation.

Coupled with another bribery blunder from approximately six months ago, it is an open question whether the government’s enforcement of the FCPA, to borrow a parliamentary phrase, would survive a no-confidence vote.

In February, the DOJ alleged (see here) that BAE, the largest defense contractor in Europe and the fifth largest in the U.S. as measured by sales, “provided substantial benefits” “through various payment mechanisms both in the territorial jurisdiction of the U.S. and elsewhere” to a Saudi official “in a position of influence” to award fighter jet deals. The DOJ stated that BAE “provided support services to the [Saudi official] while in the territory of the U.S.” and that these benefits “included the purchase of travel and accommodations, security services, real estate, automobiles and personal items.” The DOJ alleged that over $5 million in invoices for benefits provided to the Saudi official were submitted by just one BAE employee during a one year period. Yet resolution of the BAE enforcement action contained no FCPA charges.

Sure the U.S. may prosecute the most bribery cases in terms of shear numbers compared to other countries.

Yet, as is becoming increasingly obvious, many of those cases are settled via privately negotiated resolution vehicles that are not subjected to any meaningful judicial scrutiny and are based on dubious and untested legal theories.

On the flip side, when allegations of egregious or widespread bribery are alleged, the charges are not even FCPA anti-bribery violations.

Before another U.S. government official goes abroad to spread the anti-corruption gospel, preach transparency, and question other countries commitment to prosecuting bribery, it would seem that our government and Justice Department first need to examine its own enforcement of the FCPA.

Giffen Update

By on July 19, 2010 in Enforcement Agency Policy, Giffen, Kazakhstan

When your case has slogged along for over seven years, a two week delay is a minor occurence.

In any event, James Giffen’s court hearing scheduled for last week has been delayed until July 29th reports Bloomberg’s David Glovin in this interesting piece. For more on the Giffen case (see here).

As Glovin notes, the long delay in the Giffen case has spawned “conspiracy theories” and open guessing “whether the U.S. remains committed” to this case.

For starters, Giffen is accused of funneling payments to foreign officials in Kazahstan, including its current President Nursultan Nazarbayev, a U.S. ally who met with President Bush in 2006 “to discuss ways to expand U.S. access to Kazakh oil,” according to Glovin.

Adding to the intrigue, Giffen has claimed, as Glovin notes, that “U.S. intelligence services, including the Central Intelligence Agency, authorized him to pay off Kazakh leaders.” Giffen’s public authority defense has caused most of the delays in the trial as the government has fought to withhold or redact many classified documents.

Over at Harper’s Magazine (see here) Scott Horton asks the question – “why is this case languishing?”

Horton states:

“Over the past decade, I discussed the case many times with Kazakhstani officials and businessmen. They were uniformly intrigued by it and keen to learn the details of their government’s darker practices—details that have steadily emerged from the case. They were also all of the same view: this case would ultimately go nowhere because it was not in the interest of the United States to expose damaging information about President Nazarbayev. Moreover, several offered that the Kazakhstani government fully understood how to ‘spin’ the American system by hiring prominent lobbyists and consultants and engaging the right political figures. It would be able to forestall the case, they assured me. I would reply that the American system didn’t work that way—that our Justice Department was independent and that prosecutorial decisions were insulated from such lobbying. Truth is, I was never myself absolutely convinced of that, and I always felt a bit naïve saying it.”

Horton concludes with this statement:

“Today, Justice Department spokesmen tell Congress that battling corruption in foreign business dealings is a high priority. They argue that corruption is undermining the war on terror, costing taxpayers billions of dollars in Iraq and Afghanistan. But the handling of the Giffen case provides skeptics with plenty of reason to doubt the sincerity of the Justice Department’s claims. Within the government there are no shortage of career personnel who believe that a properly delivered bribe to a foreign government official is a necessary sort of compromise. A government that winks at corruption in the supposed name of national security may have a hard time prosecuting it in a commercial setting.”

Honest Services Fraud and the FCPA

By on June 22, 2010 in Enforcement Agency Policy, FCPA Jurisprudence, FCPA Related Charges, Giffen

While much of the white-collar bar awaits the Supreme Court’s decisions in the trio of honest services fraud cases on its docket (Jeffrey Skilling, Conrad Black and Bruce Weyhrauch) why not talk about the FCPA and honest services fraud!
What is honest services fraud? Stay tuned for the Supreme Court’s decisions.

For present purposes, honest services fraud is part of the mail and wire fraud statutes and is found at 18 USC 1346 which simply states that the term “scheme or artifice to defraud” includes a scheme or artifice to deprive another of the intangible right of honest services.

What does this have to do with the Foreign Corrupt Practices Act?

It turns out, not much, but that is not how the DOJ saw it when charging James Giffen in 2004. (For more on the Giffen case see here).

The Giffen superceding indictment focuses on charges that he made unlawful payments totaling more than $78 million to the former Prime Minister and Oil Minister of Kazakhstan in violation of the FCPA.

In addition to the FCPA charges, the indictment also alleged that Giffen’s actions violated 18 USC 1346 by depriving the citizens of Kazakhstan of the honest services of their government officials.

Yes, you did read that correctly – the DOJ alleged that Giffen deprived the citizens of Kazakhstan of the honest services of their government officials. That is why the Giffen honest services fraud charge is one of the more curious “tag-a-long” charges ever in an FCPA enforcement action.

Unlike most FCPA defendants (corporate and individual) Giffen mounted, and still is mounting, an aggressive legal defense.

In 2004, Giffen moved to dismiss portions of the charges that alleged a scheme to deprive the citizens of Kazakhstan of the honest services of their government officials. He asserted that application of the honest services fraud theory of Section 1346 to Kazakhstan impermissibly extended the mail and wire fraud statutes to cover activities beyond Congress’ original intent.

Judge William Pauley of the Southern District of New York agreed with Giffen and granted his motion to dismiss portions of the charges that alleged a scheme to deprive the citizens of Kazakhstan of the honest services of their government officials. See U.S. v. Giffen, 326 F.Supp.2d 497 (S.D.N.Y. 2004).

In so holding, Judge Pauley stated that the DOJ offered “the slenderest of reeds to support its expansive interpretation.” Among other things, Judge Pauley noted that the DOJ could not point to “any decision where a court upheld application of the honest services theory in an international setting involving a foreign government and its citizens.”

When the DOJ pointed to “two 25-year old indictments” charging a similar theory, Judge Pauley noted that the DOJ “has not unearthed any published decision on the issue” and that the DOJ “conceded that there were no court decisions addressing the validity of the two 25-year old indictments.” Judge Pauley further stated that just because certain U.S. Attorneys were able to obtain indictments “under an intangible rights theory, grounded between a foreign government and its citizenry, is not the kind or quality of precedent this Court need consider.”

Accordingly, Judge Pauley concluded that “Congress did not intend that the intangible right to honest services encompasses bribery of foreign officials in foreign countries” and that “application of Section 1346 to Giffen [was] unconstitutional.”

*****

As FCPA practitioners well know, many current FCPA legal theories are aggressive, untested and not supported by any case law or other meaningful precedent or guidance.

If challenged, would a judge (like Judge Pauley in Giffen) conclude that the DOJ offered the “slenderest of reeds” to support its expansive interpretations?

What case law would the DOJ cite to support certain of its aggressive interpretations (such as employees of seemingly “commercial” enterprises being “foreign officials” under the FCPA)? Would DOJ not have to concede that there are no court decisions addressing the validity of its interpretations?

All interesting (and important) questions to ponder while awaiting the Supreme Court’s honest services fraud decisions.

James Giffen Update

By on June 3, 2010 in FCPA Trials, Giffen, Guest Posts, Kazakhstan

The FCPA enforcement action against James Giffen goes back a long way.

April 2003 to be precise (see here).

The case concerns allegations that Giffen made approximately $80 million in payments to senior Kazakhstan officials in connection with numerous deals in which American companies acquired oil and gas rights in Kazakhstan. In defense, Giffen has implicated the CIA and much of the delay in prosecuting this case revolves around access to classified documents.

The case is still active as documented in this recent Main Justice piece by Lisa Brennan.

Few have been following the Giffen case closer than Steve LeVine (see here). LeVine is author of The Oil and the Glory (see here).

A key figure in LeVine’s book is James Giffen.

In this guest post, LeVine profiles next Monday’s hearing in the Giffen case.

*****

Next week, James Giffen — the former chief oil adviser to Kazakhstan President Nursultan Nazarbayev — returns to court in New York for the longest-running U.S. foreign bribery case in history. His strategy — to gum up the works in the hope of getting all or most of the charges dropped — has thus far appeared ingenious: Seven years after being led away in handcuffs from JFK Airport, Giffen appears none-too-close to trial. But will it ultimately pay off?

If the strategy does prevail, the Giffen case could send an important signal to bribers with financial wherewithal — you can wait out the Department of Justice.

A key question at the moment is whether Giffen’s lawyers — in the vein of their already-bold, go-for-broke approach — can plausibly, and as early as next Monday, successfully motion for dismissal of the charges on the basis of his Sixth Amendment right to a speedy trial.

William Schwartz, Giffen’s chief lawyer and a former assistant U.S. Attorney in the Southern District where Giffen’s case is being heard, declined to comment on the question of a Sixth Amendment motion when I emailed him. But I rang up lawyers specializing in the Foreign Corrrupt Practices Act — the law applied to foreign bribery cases — and they made the across-the-board observation that Giffen’s strategy may not be strong enough to achieve such a straight-forward victory.

In his defense, Giffen asserts that the Central Intelligence Agency either knew or should have known all along that he was diverting millions of dollars from U.S. oil companies — a total of some $80 million — to Nazarbayev and other powerful Kazakhs. When he advanced the strategy, it was exquisitely timed — in among the strongest periods of the George W. Bush Administration, with its hyper-sensitivity about the release of even unclassified documents — under the premise that the CIA was unlikely to disgorge cables and what-not that would validate Giffen’s claims. And if the CIA did refuse to so cooperate, Giffen could claim compellingly that he couldn’t receive a fair trial.

Up to this point, Giffen has proven correct — the CIA has been as slow as molassas, and has consequently tested the patience of federal Judge William Pauley. Yet, that doesn’t necessarily add up to a successful Sixth Amendment motion, experts tell me. To win, Giffen would have to show an outside reason why the long delay has occurred, and that he is being harmed by it. But as a former U.S. prosecutor who didn’t want to be identified told me, “When much of the litigation is instigated by the defendant, the defense would be hard-pressed to claim that it’s been denied a speedy trial.” As for hardship or harm, Giffen hasn’t been sitting in jail, but rather whiling away his time at home in Westchester County near the Winged Foot Golf Club.

Even so, said Richard N. Dean, a Washington-based FCPA lawyer with long experience in the former Soviet Union, that doesn’t mean that Giffen won’t prevail. He sees a more fundamental issue at stake — “I just don’t know if [the prosecution] has a case or not,” says Dean, who is a partner at Baker & McKenzie.

That is, it’s true that the CIA has dragged its heels, but so has the prosecution itself — it hasn’t seemed at all in a rush to bring the case to trial. That makes Dean wonder “how strong they think their case is, whether they believe they can overcome the defense’s assertion” of the CIA defense.

Schwartz, in other words, probably can’t abbreviate the current snail’s-pace pre-trial process: Judge Pauley is unlikely to grant a Sixth Amendment motion.

There’s always the chance that government prosecutors will demonstrate renewed spine in Monday’s hearing, and make it plain that they intend to go to trial soon — the Justice Department certainly doesn’t wish to give bribe-givers or their lawyers the idea that they can use delaying tactics to wiggle out of an FCPA case. In that event, Schwartz would need to prepare for a knock-down, drag-out jury trial that would reveal embarrassing details about his client’s luxurious, heavy-partying life abroad.

Yet, given the case thus far, one gets the impression that one or both sides wish the case would simply go away. If this is in Schwartz’s thinking, he must patiently hope that the prosecution elects to save face by dropping at least some of the more onerous charges, and perhaps then persuade Giffen to plead to lesser violations of the law.

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