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Rewind – In The Words Of Judge Leon

JudgeLeon

“Bribery” (however defined) is bad.

The Foreign Corrupt Practices Act outlaws a certain type of bribery.

Therefore, in the minds of some, all FCPA enforcement actions are good – regardless of enforcement theory, regardless of law enforcement conduct, and regardless of outcome.

Ten years ago this month, Judge Richard Leon (U.S. District Court for the District of Columbia) disagreed an provided a blistering statement in dismissing a flawed DOJ FCPA prosecution.

In terms of background, in January 2010 the DOJ announced criminal charges against 22 executives and employees of companies in the military and law enforcement products industry for engaging in a scheme to pay bribes to the minister of defense of an African country.

However, there was no actual involvement from any minister of defense. Rather, FBI agents, with the assistance of an individual who had already pleaded guilty to real, unrelated FCPA offenses (Richard Bistrong), posed as representatives of a Gabonese minister. While it was not the first use of proactive, undercover investigative techniques in an FCPA investigation, it was certainly the largest and most dramatic use of such techniques in the FCPA’s history, and the full force of the government’s surveillance capabilities were used against individuals from mostly small private companies located across America.

In announcing the criminal charges, Assistant Attorney General Lanny Breuer called the manufactured case a ‘‘turning point’’ in the DOJ’s FCPA enforcement program and otherwise trumpeted that the charges represented the ‘‘largest single investigation and prosecution against individuals in the history of DOJ’s enforcement of the FCPA.’’ All but one of the charged individuals was arrested at the industry’s leading trade show in Las Vegas, and in a sophomoric statement Breuer said, ‘‘This is one case where what happened in Vegas doesn’t stay in Vegas.’’

In a press release that foreshadowed the conduct of the FBI agents involved in the sting operation, the FBI stated that the undercover operation was like a ‘‘ruse [that] played out with all the intrigue of a spy novel.’’ A good spy novel often involves sex, drugs, and criminals, and the FBI’s conduct in carrying out the manufactured case touched upon all such subjects. Indeed, the FBI agents openly wondered who would portray them when Hollywood made a movie about the case.

The so-called Africa Sting cases were assigned to Judge Richard Leon. Leon immediately expressed strong skepticism of the DOJ’s enforcement theories and the difficulties of trying such a large group of defendants. Leon ultimately decided that the defendants would be tried in four separate groups. The first Africa Sting trial started in May 2011 and involved four defendants. At the close of DOJ’s case, Leon dismissed a substantive FCPA charge against one defendant, dismissed another substantive FCPA charge against another defendant, and dismissed the money laundering count against all defendants. In July 2011, Leon declared a mistrial as to all remaining counts against all defendants.

At this point, prudence might have suggested a reevaluation of DOJ’s ‘‘turning point’’ prosecution. However, DOJ quickly announced that it would retry the remaining charges against the first group of defendants. In addition, DOJ plowed ahead against the second group of six defendants, and the second trial in the manufactured case began in September 2011. At the close of DOJ’s case in December 2011, Leon dismissed the conspiracy charge against all defendants. Because one defendant faced only that conspiracy charge, he was exonerated by Leon’s decision. The trial proceeded, the charges went to the jury, the jury deliberated, and in January 2012 the jury found two defendants not guilty. The jury hung as to the remaining defendants, and once again Leon declared a mistrial as to all remaining counts against the remaining three defendants.

The jury foreman then went public to express dismay over the DOJ’s case (see here).

Shortly thereafter, the DOJ moved to dismiss with prejudice the criminal charges against all of the remaining Africa Sting defendants. DOJ’s filing stated that ‘‘continued prosecution of this case is not warranted under the circumstances.’’

Judge Leon granted the motion and in doing so stated:

“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.”

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