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Looking Back On February 21st

February 21, 2011

Two years ago today, for the first time in FCPA history a motion to dismiss was filed, with the benefit of a detailed and complete overview of the FCPA’s extensive legislative history on the “foreign official” element (see here for my declaration) ,challenging the DOJ’s interpretation that employees of alleged state-owned or state-controlled enterprises are “foreign officials” under the FCPA.

The Carson “foreign official” challenge lead to other “foreign official” challenges in the Lindsey Manufacturing and John O’Shea matters, as well as the 11th Circuit appeal pending in the Joel Esquenazi and Carlos Rodriguez matter – the first time in FCPA history that “foreign official” will be directly before an appeals court.  You of course are entitled to your own opinion as to the end results in the Carson, Lindsey Manufacturing and O’Shea matters, including whether “foreign official” impacted the results.  (See prior posts here and here).

It is interesting to note that since the Carson “foreign official” challenge two years ago, there has been no new case in which an individual has been charged with an FCPA anti-bribery violation based on the theory that SOE employees are “foreign officials.”

February 21, 2012

One year ago today, the DOJ moved to dismiss the Africa Sting cases after suffering several losses in the first two sets of trials.   (See here for the prior post).  The dismissal occurred shortly after the jury foreman in the second trial wrote this guest post published on FCPA Professor.

In granting the DOJ’s motion, Judge Richard Leon stated as follows.

“This appears to be the end of a long and sad chapter in the annals of white collar criminal enforcement.  Unlike takedown day in Las Vegas, however, there will be no front page story in the New York Times or the Post for that matter tomorrow reflecting the government’s decision today to move to dismiss the charges against the remaining defendants in this case.  Funny isn’t it what sells newspapers.

The good news, however, is that for these defendants, agents, prosecutors, defense counsel and the Court we can get on with our professional and personal lives without the constant strain and burden of three to four more eight week trials hanging over our heads.

I for one hope this very long, and I’m sure very expensive, ordeal will be a true learning experience for both the Department and the FBI as they regroup to investigate and prosecute FCPA cases against individuals in the future.

Two years ago, at the very outset of this case I expressed more than my fair share of concerns on the record regarding the way this case has been charged and was being prosecuted.  Later, during the two trials that I presided over I specifically commented again on the record regarding the government’s very, very aggressive conspiracy theory that was pushing its already generous elasticity to its outer limits.  Of course, in the second trial that elastic snapped in the absence of the necessary evidence to sustain it.

In addition, in that same trial, I expressed on a number of occasions my concerns regarding the way this case had been investigated and was conducted especially vis-a-vis the handling of Mr. Bistrong.  I even had an occasion, sadly, to chastise the government in a situation where the government’s handling of the discovery process constituted sharp practices that have no place in a federal courtroom.

Notwithstanding all of this water over the dam, and there has been a lot of water, I’m happy to see and I applaud the Department for having the wisdom and courage of its convictions to face up to the limitations of its case as revealed in the past 26 weeks of trial and the courage to do the right thing under the circumstances.

Having served at the higher levels of the Department, I know that that was not an easy decision.  They never are, when so much has been invested, and the agents and the prosecutors are so convinced of the righteousness of their position.  I for one however am confident this will be in the end a positive, if not painful, lesson that results in better prosecutions of individuals in the future under the FCPA.  As for the defendants, I hope the healing process is a swift one and that they get back to their normal lives in the very near future.

Finally, I would be remiss if I did not comment on the tireless and spirited effort by the defense counsel from all over the country who came here to try these very lengthy and complicated cases under difficult circumstances and some even pro bono.  Their hard work and effective advocacy are a testament to how strong our criminal defense bar is nationwide.

As so without further adieu I grant the government’s motion to dismiss.  The defendants are excused.”

With Judge Leon’s words, the world changed for twenty-two individuals and their families.  Yet the wounds inflicted and damage done to their real reputations and real careers will never fully heal.

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