As highlighted in this prior post, in connection with the Cognizant Technology Solutions Foreign Corrupt Practices Act enforcement action concerning obtaining various permits in India, in early 2019 the DOJ (and SEC) also charged Gordon Coburn (former President and CFO of the company) and Steven Schwartz (former Executive Vice President and Chief Legal and Corporate Affairs Officer) with various FCPA offenses.
The case against the former executives remains active and recently Schwartz and Coburn filed motions seeking various forms of relief claiming that the government outsourced its investigation to Cognizant.
In this motion, counsel for Schwartz states:
“The Indictment in this case charges that the Defendants, as corporate officers of Cognizant Technology Solutions Corporation (“Cognizant”), authorized the payment of a bribe to an unidentified Indian government official to obtain a planning permit necessary for the construction of an office building in India. Specifically, the Indictment alleges that the bribe was paid by Cognizant’s contractor, Larsen & Toubro, Limited (“L&T”), and that Cognizant reimbursed L&T for payment of the alleged bribe through false change orders that L&T submitted to Cognizant and that Cognizant paid. The Defendants have pled not guilty and vehemently deny these allegations, which they contend are totally without merit.
But Cognizant is not merely the Defendants’ former employer and a central figure in this case. And its lawyers and employees are not merely witnesses to the events alleged in the Indictment. Rather, in close coordination with the Government—certainly with the Government’s encouragement and often based upon the Government’s explicit requests—Cognizant and its lawyers spent over two years investigating this case and presenting the fruits of its investigation to the Government. As part of this process, and to a degree unprecedented in internal investigations, Cognizant took direction from and provided information to the prosecutors ultimately responsible for charging, and now trying, this case. And those prosecutors, again to a degree never seen in criminal prosecutions, accepted the fruits of Cognizant’s investigation, essentially charging the case as it was brought to them by Cognizant’s lawyers, who as the representatives of a private party, operated without the constitutional constraints or obligations that apply to federal prosecutors and agents, including with respect to compelling the statements of the defendants.
Both the Government and Cognizant have argued, and will likely continue to argue, that there is nothing wrong with the Government interfacing with Cognizant’s counsel and accepting the fruits of an internal investigation. That is true, and the Defendants do not contend otherwise.
But that is not the issue. Instead, the issue presented here is whether and when a company’s conduct (by virtue of the incentives for the company, the involvement of the Government in its investigation, and the interaction between the two entities, overall) is “fairly attributable” to the Government for purposes of protecting the constitutional individual rights of targets of criminal investigations, and of criminal defendants. In other words, this motion seeks to determine not whether either Cognizant’s counsel or the Government did something “wrong” in their coordination of the investigation, but rather the consequences that flow when a private party, in pursuit of its own interests—and not subject to the Government’s overarching goal of doing justice and discovering the truth—performs governmental functions in the way that Cognizant did here.
In this case, and on this record, with the benefit of precedent, discussed below, that is both well-established and continuing to emerge, there is every reason to explore that question further. The record here, developed with the benefit of discovery obtained through extremely hard-fought litigation from both Cognizant and the Government, which have mightily resisted turning over the information brought to bear below, and continue to do so, shows an extraordinary degree of coordination between the Government and Cognizant at every stage of the investigation of this matter. It shows that in close coordination with the Government, and often at its specific request, encouragement or direction, Cognizant and its counsel insisted on employees’ cooperation with the investigation, including Schwartz’s August 28, 2016 and September 23, 2016 interviews; were guided by the Government with regard to the timing and substance of the interviews they performed; provided the Government with detailed updates, including witness interview readouts, credibility assessments, and summaries of key documents; and seized evidence and conducted forensic analyses addressed to evidentiary and related concerns of the Government. Cognizant sought to identify and address defenses to the criminal case against the Defendants that the Company and its counsel encouraged the Government to bring. Ultimately, Cognizant and its lawyers—acting as the Government’s investigators, created the road map for this investigation and prosecution. And the record shows that the Government followed this road map religiously, undertaking no meaningful independent investigation and repeatedly deferring to Cognizant’s self-serving narrative, a narrative which Cognizant crafted by improperly invoking the attorney-client privilege, though it had waived it, as this Court has found.
The record in this regard is already compelling, but it is not complete, including because the Defendants and the Court have not yet heard from Cognizant or its counsel, or from the Government lawyers who collaborated with them in the years before and after the case was charged. When the Court has heard the evidence of the nature and full scope of the actions of both the Government and Cognizant at the hearing it has ordered, and the issues discussed below have been fully developed, then the Court will be able to make the findings that will dictate the appropriate relief to be accorded for the constitutional violations which occurred here.”
Separately, in this motion Coburn’s counsel states:
“In May 2016, a team of experts with many years of federal investigative experience opened an investigation into allegations of Foreign Corrupt Practices Act (“FCPA”) violations at Cognizant Technology Solutions Corporation (“Cognizant”). By late August 2016, Gordon Coburn and Steven Schwartz were the targets of that investigation, and the U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) were its intended beneficiaries.
In the first several months of the investigation, the investigators conducted dozens of interviews of Cognizant employees and provided near-real-time updates on the progress of many of those interviews to prosecutors. The investigators interviewed company leadership – including Coburn and Schwartz – and did so under highly coercive conditions designed to compel participation in those interviews.
The investigators provided oral “readouts” of the substance of employee interviews, in most instances long before the prosecution team conducted interviews of its own. In addition to sharing with the prosecutors what the interviewees actually said during the interviews, the investigators repeatedly shared their assessments of the credibility of many of those interviewees with prosecutors.
The investigators also collected and reviewed a massive quantity of electronic documents, requesting direction from the prosecutors on what “search strategies” to employ in order to identify the most important documents for the prosecutors. Then the investigators combed through the resulting documentary record and provided multiple binders – hundreds of pages – of self-described “hot docs” to the prosecutors – again before those prosecutors conducted a single interview (and thousands more pages of identified “hot docs” after that first interview).
The investigators analyzed those records and offered to provide that analysis to the prosecutors, in order to ensure the prosecutors understood the significance of certain of those “complex” records.
And the investigators kept in close and regular contact with the prosecution team: for example, across a four-week period shortly after learning of the investigation in September 2016, there are records of at least 29 communications between the two teams. That close coordination continued throughout the remaining months of the investigation with dozens – or more – phone and email communications between these investigators and the prosecutors.
Any federal prosecutor would be grateful for such dogged and communicative investigators.
But, of course, here, the investigators were not federal agents, they were Cognizant’s private law-firm lawyers. And the entire investigation described above was done by Cognizant’s investigators, in close coordination with the government. Thus, at the critical initial stages of this case, the government chose to rely almost entirely upon a private investigation – freed of the strictures of the Constitution – to labor the oar. In consequence, by the time the government started rowing, Cognizant had already provided it with the cultivated fruits of a mature investigation along with a detailed roadmap for its case.
Through at least early 2017, when the government conducted its very first interview, it had already received the fruits of Cognizant’s investigation: large volumes of information – analyzed, summarized and interpreted for it by Cognizant, with a focus on Coburn and Schwartz – while seemingly doing very little work of its own. To wit, across the first seven months of the investigation:
- Cognizant conducted 44 interviews of its employees that were shared with DOJ, while DOJ did not conduct a single interview;
- Cognizant collected and reviewed hundreds-of-thousands of documents and repeatedly provided DOJ with binders of self-styled “hot docs,” again before DOJ conducted a single interview.
Importantly, there is nothing intrinsically improper with DOJ’s chosen investigative strategy. If the government elects to rely on a private investigative team to carry out all or part of an investigation, there is no reason why it should be prohibited from doing so. Indeed, as a matter of policy or of strategy, it may well be desirable for DOJ to be permitted to coordinate with, and rely upon, the activities of a company’s investigators, and to follow the roadmap given to it by the company. Certainly, various DOJ policies powerfully incentivize active cooperation with DOJ, and reward such cooperation handsomely.
But when DOJ relies on a private actor to carry out core governmental investigative functions, that has consequences. It must. The Constitution requires it: the government cannot evade its constitutional and statutory obligations by relying on a private actor to carry out government action.
Applying those constitutional protections is critical where, as here, the deputized private actor is the government’s own cooperating witness – and therefore has “obvious incentives to shift blame” from itself to others and to identify materials that would “exculpat[e] itself” in order to “dissuade the government from pursuing criminal charges against” it and, perhaps, to focus its attention on others.
As set forth in detail below, the evidence already produced powerfully supports the notion that, in various ways, Cognizant was de facto the government. Indeed, the evidence that Cognizant was de facto the government for interview purposes is at least as compelling as that which was present in United States v. Connolly, No. 16 CR. 0370 (CM), 2019 WL 2120523 (S.D.N.Y. May 2, 2019).
But, critically, the joint-investigative effort was not limited to the interviews. Far from it. As described in further detail below, throughout the course of this case, Cognizant has acted as an arm of the prosecution: time and again, DOJ delegated fundamentally governmental tasks to Cognizant, including interviews, document collection and reviews, factual and legal analysis, and the production of discovery. That too has constitutional implications. See United States v. Blumberg, No. 14-cr-458 (JLL), ECF No. 113 at 2 (D.N.J. June 7, 2016).
While the discovery ordered by this Court pursuant to the Rule 17 subpoenas has revealed aspects of the relationship between DOJ and Cognizant, the evidentiary hearing that this Court ordered in its Order of September 14, 2020 (the “Hearing”) will, we expect, further illuminate the nature of the relationship, and the consequences that flow from it. See Blumberg, No. 14-cr-458 (JLL), ECF No. 113 at 2 (D.N.J. June 7, 2016). Throughout this brief, we highlight additional facts we will seek to explore at the Hearing.
Accordingly, by this Motion – and pending the additional evidence to be adduced at the Hearing – Coburn moves this Court for the following remedies:
(1) The government should be directed to search Cognizant’s files for Brady material, to produce any such materials, and to provide a detailed report to the Court about that search and its results.
(2) The government should be precluded from using at trial any statements made by Coburn during Cognizant’s interview, as well as any evidence derived from those statements.
(3) If the Court finds that some or all of the investigation conducted by Cognizant is fairly attributable to the government, Coburn should be permitted to file supplemental briefing addressing whether the Due Process Clause of the Fifth Amendment requires the suppression of other evidence or dismissal of the Indictment.”
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