In 2013, the DOJ criminally charged Lawrence Hoskins (a United Kingdom national and former senior vice president for the Asia region for France-based Alstom) with conspiracy to violate the FCPA’s anti-bribery provisions among other charges. (See here for the prior post). The conduct at issue alleged occurred between 2002 and 2004.
Six years after being charged and approximately 15 years after the alleged conduct at issue took place, this morning in federal court in New Haven, Connecticut the trial of Hoskins will begin.
As stated by the DO in 2013:
“[Hoskins] together with others, allegedly paid bribes to officials in Indonesia – including a member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara, the state-owned and state-controlled electricity company in Indonesia – in exchange for assistance in securing a $118 million contract, known as the Tarahan project, for the company and its consortium partner to provide power-related services for the citizens of Indonesia. To conceal the bribes, the defendants retained two consultants purportedly to provide legitimate consulting services on behalf of the power company and its subsidiaries in connection with the Tarahan project. The indictment, however, alleges that the primary purpose for hiring the consultants was to use the consultants to pay bribes to Indonesian officials.”
Unlike certain of his co-defendants who pleaded guilty, Hoskins put the DOJ to its burden of proof and at the trial court level argued in a motion to dismiss that the FCPA charges should be dismissed “on the basis that [the indictment] charges a legally invalid theory that he could be criminally liable for conspiracy to violate the FCPA even if the evidence does not establish that he was subject to criminal liability as a principal, by being an “agent” of a “domestic concern.” (See here for the prior post).
As stated by the trial court judge in a 2015 decision (see here), the disputed issue was “whether a nonresident foreign national could be subject to criminal liability under the FCPA, even where he is not an agent of a domestic concern and does not commit acts while physically present in the territory of the United States, under a theory of conspiracy or aiding and abetting a violation of the FCPA by a person who is within the statute’s reach.” The judge answered the question no and concluded that accomplice liability could not extend to Hoskins under the circumstances of the case and thus granted the motion to dismiss. After the DOJ’s motion for reconsideration was rejected, the DOJ appealed to the Second Circuit – representing a rare opportunity in the FCPA’s 40 plus year history for an appellate court to interpret the FCPA.
In its 2018 decision (see here for the prior post), the Second Circuit court rejected the DOJ’s expansive jurisdictional theory of prosecution. As stated by the court:
“[W]e are asked to decide whether the government may employ theories of conspiracy or complicity to charge a defendant with violating the Foreign Corrupt Practices Act (“FCPA”), even if he is not in the categories of persons directly covered by the statute. We determine that the FCPA defines precisely the categories of persons who may be charged for violating its provisions. The statute also states clearly the extent of its extraterritorial application. Because we agree with the district court that the FCPA’s carefully-drawn limitations do not comport with the government’s use of the complicity or conspiracy statutes in this case, we AFFIRM the district court’s ruling barring the government from bringing the charge in question.”
Notwithstanding the above, in its opinion the Second Circuit allowed the government to pursue FCPA charges based on the factual issue of whether Hoskins was “an agent of a domestic concern.” As stated by the court:
“Provided that the government makes this showing, there is no affirmative legislative policy to leave his conduct unpunished, nor is there an extraterritorial application of the FCPA. Accordingly, the government should be allowed to argue that, as an agent, Hoskins committed the first object by conspiring with employees and other agents of Alstom U.S. and committed the second object by conspiring with foreign nationals who conducted relevant acts while in the United States.”
Back at the trial court level, during the summer of 2019, Hoskins said “enough is enough” as he sought dismissal of the remaining charges based on violations of the Speedy Trial Act and his constitutional rights to a fair and speedy trial. (See here for the prior post). As highlighted in this prior post, the trial court judge denied the motion.
As summarized in this Law360 article:
“The Prosecution’s Position
Prosecutors allege that even though Hoskins left Alstom in 2004, he helped negotiate contracts with consultants that set the gears in motion for bribes that were paid from 2005 through 2009.
Prosecutors have contended in case documents that the executive was acting “on behalf” of Alstom’s U.S. subsidiary when he negotiated the contracts, and thus meets the “agent” standard imposed by the Second Circuit.
Money laundering charges present another path to a conviction, with the prosecution alleging Hoskins misrepresented the nature of the contracts and the associated payments.
Money laundering charges don’t involve proving up any agent-principal relationship, and instead will simply focus on the details of the contracts that Hoskins negotiated, and thus could prove harder to dispute, according to Cadwalader’s Moreno.
“It’s much more transactional — what was the person’s role in that specific transaction?” he said.
Fry Wernick, a former assistant chief of the DOJ’s FCPA unit who joined Vinson & Elkins LLP this summer, said that FCPA cases are “hard to prove on documents alone,” and so cooperating witnesses are key to the prosecution. Hoskins’ alleged conspirators have pled guilty, and several including Rothschild and former Alstom Power executive Larry E. Puckett, are likely to testify at trial.
“The manner in which they testify and whether they can present compelling pictures of Hoskins’ involvement is going to go a long way to deciding whether the government gets a conviction or not,” Wernick said.
Hoskins’ defense is likely to focus on his argument that the FCPA can’t be applied to him, and that even if he did do work for Alstom’s U.S. subsidiary, it never had authority over him, and thus can’t have been its agent.
Wernick said the fact that Hoskins is a foreign national, whose role at Alstom was as “effectively the boss” of the U.S. subsidiary, means “there’s some logic to the defense’s approach here.”
Hoskins has asserted in proposed jury instructions that prosecutors must prove the U.S. subsidiary had ‘control’ over his day-to-day activities.
He contends that because the first alleged bribe wasn’t paid until 2005, a year after he left Alstom, he can prove that he “withdrew” from the conspiracy before the law was broken, and has asked that the jury be instructed to this effect.”
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