- FCPA Professor - https://fcpaprofessor.com -

Paris Court of Appeals Rules That US FCPA Guilty Plea Deprives Accused of Rights Under European Convention and Bars Further Proceeding in France

Today’s post is from Frederick Davis [1] (Debevoise & Plimpton – Paris).

A decision of the Paris Court adds a new element to the debate over “international double jeopardy:” in a striking ruling, it held that a person who had pleaded guilty in the United States to FCPA violations could not be prosecuted for the same offense in France because the US guilty plea – which the Court concluded had been forced upon him – deprived him of his right to self-defense protected by the European Convention on Human Rights.

On March 11, 2011, former UK solicitor Jeffrey Tesler entered into a written plea agreement [2] with the DOJ whereby he agreed to plead guilty to certain counts of an indictment against him charging him under the Foreign Corrupt Practices Act; on February 28, 2012, this plea agreement was formally accepted by the federal court in the Southern District of Texas, and a judgment of conviction [3] entered.  On November 30, 2010, following a lengthy investigation in France by an investigating magistrate (juge d’instruction), he was bound over for criminal trial for alleged violation of the French anti-bribery statute, Article 435-3 of the Penal Code [4], apparently for the same facts underlying the US investigation.

[5]

In a decision dated September 2016, but which has circulated only recently, the Paris Court of Appeals ruled that Tesler could not be prosecuted in France.  Its key reasoning was that by pleading guilty in the US, Tesler put himself under an obligation not to contradict any of the factual or legal representations he had made there, and therefore was powerless to defend himself in French court without fear of violating his plea agreement and incurring the wrath of US prosecutors.  In the words of the appellate court (my translation):

[Tesler’s guilty plea] prohibited him from contradicting his acknowledgement of guilt for fear that the US authorities would walk away from their agreement and reopen the prosecution against him, thus depriving him of his ability to insist on his innocence without abandoning his right against self-incrimination or his right of self-defense.

The Court further emphasized that the US guilty plea had not been the result of a free choice by Tesler stating:

“It is difficult to conclude that this situation resulted from a considered and personal decision by the accused (even if surrounded by lawyers) when faced with American judicial authorities armed with such powers and capable of proceeding against him to obtain particularly lengthy sentences (several decades) if he refused to plead guilty.”

The decision contributes a new element to the already complex debate about whether people and companies have any defenses against prosecutions in multiple countries.  The general principle is that they do not because so-called double jeopardy principles (known in Europe as ne bis in idem) only protect against multiple prosecutions by the same sovereign.  As noted [6] in this space, a 2015 decision in France relied on the International Covenant on Civil and Political Rights [7] (“ICCPR”) to bar French prosecution after a US negotiated outcome.  As I have explained elsewhere [8], that decision is based on attackable reasoning, and is being appealed with an uncertain outcome.  The new decision, which is based on entirely different grounds, is sure to have an impact on cross-border investigations, at least between the United States and France, and raises interesting questions about justice principles in the two countries.

While the Paris Court was clearly animated by a belief that US criminal procedures lack fairness, the perverse effect may be to encourage recourse to US negotiated outcomes for the simple reason that its ruling means that a US plea precludes prosecution in France, while the same would clearly not be the case were the situation reversed.  In this, the Court’s ruling under the ECHR is functionally similar to other decisions, noted above, under the ICCPR, since while France will enforce individual rights under that Convention, the United States will not [9].

The notion that a carefully negotiated guilty plea by a wealthy defendant advised by experienced counsel, and apparently in strict compliance with US procedures, is nonetheless “involuntary” will appear preposterous to US lawyers and prosecutors; on its face, the court’s ruling would undermine the validity of virtually any US guilty plea. This may create tensions in discussions between prosecutors in the two countries.  It is the opinion of the author, however, that the perception is already widespread in Europe that US prosecutors exercise far too much power with far too little judicial supervision, a point of view that this decision will encourage.

And finally it is worth reflecting on exactly what “defense” the Court felt was undercut by the US guilty plea.  An American might consider it commonsensical that there would be consequences if someone denied responsibility for acts solemnly admitted elsewhere.  But in France (and elsewhere in continental Europe) the right of self defense implies a right to some testimonial flexibility.  Generally speaking, criminal defendants are encouraged to speak on their own behalf (among other reasons, because a strong inference of guilt may often be drawn from their failure to do so), but they are not put under oath.  The reason for this is a widespread belief that it is unfair to force on a defendant the stark choice between insisting on silence (and leaving the prosecutor’s case unrebutted) and risking a perjury prosecution at the hands of the same prosecutor.  This has led to the concept – which does not appear in any text, but is openly discussed in France – of a so-called “right to lie.”  Even before this decision, there has been frequent anecdotal comment, and one published article, [10] criticizing provisions in many US Deferred Prosecution and Non-Prosecution Agreements where a defendant formally agrees not to contradict elsewhere anything said in the agreement. This provision is clearly intended by US prosecutors to avoid the public relations fiasco of a defendant insisting on innocence even after expressing contrition in a formal agreement, but in France is disparaging called a “muzzle clause,” and is widely viewed as a pernicious example of the extraterritorial reach of US criminal procedures.

FCPA Institute - Denver (May 4-5)

A unique two-day learning experience ideal for a diverse group of professionals seeking to elevate their FCPA knowledge and practical skills through active learning. Learn more, spend less. CLE credit is available.

Learn More & Register [11]