Compliance Corner

“We’ve got to conduct ourselves like men”

If you haven’t seen (or heard) last week’s episode of Bill Moyers’ Journal on PBS called LBJ’s Path To War, it’s something special. The hour-long program consists almost entirely of excerpts from President Johnson’s recorded phone calls with advisors and congressional leaders. He’s talking to them about the Vietnam problem. The program covers the period from November 1963, when Johnson took office after JFK’s assassination and there were about 15,000 U.S. advisors on the ground in South Vietnam, until the end of 1965, when the build-up had reached 184,000 combat forces and there was no end in sight. . . .

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Jefferson And Bourke Are Released On Bail

Surprising news from the federal courthouse in Alexandria, Virginia. William Jefferson is free pending appeal of his conviction in August on 11 corruption counts. Last week U.S. District Court Judge T.S. Ellis III sentenced him to 13 years in prison. But the judged ruled on Wednesday that Jefferson can remain free during his appeal, which will likely take at least a year. . . .

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M&A Surge Means More FCPA Action

Mergers and acquisitions are back. Seeking Alpha just said: “Over the past few weeks, there has been a resurgence in acquisition activity, fueling an already strong market rally. This news has spanned all regions of the economy ranging from the transportation sector (Burlington Northern being taken over by Berkshire Hathaway) to pharmaceuticals (Schering Plough being acquired by Merck). Most recently, in the consumer sector, Kraft announced its intention to take over confectionery giant Cadbury while Hewlett Packard announced plans to buy 3com.” . . .

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Guilty Plea In (Old) Panama Bribes Case

A Virginia man pleaded guilty on Friday, November 13th to being part of an overseas bribery conspiracy that began in 1996 and ended in 2003. Charles Paul Edward Jumet, 53, was charged in federal court in Richmond, Virginia under a two-count criminal information. He admitted conspiring with others to violate the Foreign Corrupt Practices Act by making corrupt payments to government officials in Panama and giving a false statement to the FBI about how he paid some of the bribe money. . . .

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Jefferson Sentenced To 13 Years

Former nine-term congressman William Jefferson, 63, was sentenced on Friday to 13 years in prison. He was found guilty on 11 of 16 corruption charges, including one count of conspiracy to violate the Foreign Corrupt Practices Act. He was acquitted of the single substantive FCPA charge he faced. . . .

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Frederic Bourke’s Big Bet

Let’s talk about Mr. Bourke. He was sentenced Tuesday to a year and a day in jail and fined a million dollars for conspiring to violate the FCPA and lying to FBI agents. People in the courtroom said when he was convicted, Bourke was shocked. So apparently he never expected the jury to find him guilty. But when he was sentenced, he was happy and relieved. So he must have been expecting a lot worse. And that probably means the DOJ never offered him a deal with so little jail time. . . .

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Blackwater And The FCPA

The New York Times alleged yesterday that executives at the private military security firm formerly known as Blackwater Worldwide authorized secret payments of about $1 million to Iraqi officials that might have violated the Foreign Corrupt Practices Act. The payments were “intended to silence [the officials’] criticism and buy their support after a September 2007 episode in which Blackwater security guards fatally shot 17 Iraqi civilians in Baghdad,” the Times said. . . .

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Bourke Gets A Year In Prison

Frederic Bourke, the American entrepreneur who led a charmed life and whose prosecution brought new prominence to the Foreign Corrupt Practices Act, has been sentenced to a year and a day in prison and fined $1 million for investing in a bribe-tainted deal in Azerbaijan and then lying to FBI agents about it. . . .

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Toss Jefferson’s FCPA Conspiracy Count

Before getting to William Jefferson, this reminder: Frederic Bourke is scheduled to be sentenced in Manhattan today (Tuesday, November 10) at 2:30 pm. He could be jailed for up to ten years for conspiracy to violate the Foreign Corrupt Practices Act and lying to federal investigators.

Now Jefferson: He’ll learn his sentence this Friday in Alexandria, Virginia. Prosecutors want him jailed for 27 to 33 years. And once again there’s a question whether the jury found Jefferson guilty of any FCPA-related offense. This time the answer could influence how long he’ll spend behind bars. Here’s the issue. . . .

A Tweet Too Far?

Last week, the U.S. ambassador to Kenya, Michael Ranneberger, made a very strange announcement. He confirmed on his Twitter page that the U.S. government had denied a visa to Kenya’s attorney general Amos Wako. What’s strange is that as far as we know, it’s the first time an American official has ever revealed a visa determination under Presidential Proclamation 7750. That’s the executive order giving the State Department the power to exclude foreign kleptocrats, their families and friends. Before now, those decisions had always been made — and kept — in complete secrecy. . .

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Gotham City East And West

In the western China municipality of Chongqing, a special deployment of 25,000 police officers was called in to fight organized crime. Chongqing city proper has around five million people but the region– called the “municipality” — has closer to 32 million (California’s population is about 36 million). Last month, police said they had so far detained 4,893 suspected gangsters and formally arrested about 1,500. Among the 30 or so municipal officials being held are a former deputy police commissioner and the head of the justice bureau, Wen Qiang. . . .

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The FCPA’s Imperialist Myth

Elizabeth Spahn, a professor at the New England School of Law, stopped by this week. She left a comment about Andy Spalding’s latest post. In it, she cited her recent article that asks the questions: Why is there so little legal scholarship regarding international bribery? Why aren’t law professors training their students on the issue? Why, she asks, don’t legal educators want to talk about international anti-corruption initiatives? . . .

Read the entire post at The FCPA Blog www.fcpablog.com

Professor Podgor Pops The Question

With so much to lose by going to trial, how many organizations and people will plead guilty to white collar crimes they didn’t commit? Ellen Podgor of Stetson University College of Law and the White Collar Crime Prof Blog asks that question in her latest essay, “White Collar Innocence: Irrelevant in the High Stakes Risk Game.” She looks at three defendants who claimed their innocence at trial but were convicted — Arthur Andersen LLP, Jamie Olis, and Jeffrey Skilling. And three who pleaded guilty and avoided trials — KPMG, Gene Foster, and Andrew Fastow. The second group, she says, enjoyed reduced sentences and finite results. . . .

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How Appealing Are Bourke’s Chances?

On the subject of Frederic Bourke — the wealthy entrepreneur convicted in July of conspiring to violate the Foreign Corrupt Practices Act and lying to FBI agents — we now know what issues his lawyers plan to raise on appeal. Most relate to what Bourke knew and intended — his mens rea. In a recent pleading arguing for his release pending the appeal, his lawyers said: . . .

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The FCPA’s Thwarted Intent

The first time we heard from Andy Spalding, a lawyer on a year-long Fulbright Research Grant in Mumbai, India, he floored us with the idea that the Foreign Corrupt Practices Act causes corruption and hurts poor people. We just heard from him again, this time about the way the Justice Department explains the purpose of the FCPA and approaches enforcement. We’ll let Andy speak for himself (because he does it so well). Here’s what he said: . . .

Make That Sixteen . . .

The Foreign Corrupt Practices Act researcher Cody Worthington responded to our post Their Days Are Numbered. To our list of thirteen people waiting to be sentenced for violating or conspiring to violate the FCPA, he suggested we add three more. Here they are . . .

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Senegal’s Big Send-Off

In Dakar, the capital of the West African country of Senegal, the IMF’s regional representative was given a farewell dinner two months ago. After three years in the post, Alex Segura was heading back to his native Spain. As the evening ended, President Abdoulaye Wade handed Segura a going-away gift. It was cash — €100,000 and $50,000. Segura boarded his flight and left the country, cash in hand. In later explaining Segura’s actions, the IMF said he was worried about missing his plane and concerned about finding a place to stash the cash safely in Senegal. . . .

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Their Days Are Numbered

We count at least thirteen people waiting to be sentenced for violating or conspiring to violate the Foreign Corrupt Practices Act. Both offenses carry a prison term of up to five years. And for substantive offenses the fine can be up to $250,000 or twice the gross gain produced by the bribes. Those listed either pleaded guilty or were convicted at trial. Their names (linked to posts describing their guilty pleas or convictions) are followed by current sentencing dates. The dates often slip, so we’ll try to stay on top of any changes. . . .

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Russian Graft:The Video

Hermitage Capital Management, once the largest foreign investor in the Russian stock market, has accused police officials, bankers, judges and lawyers of working with gangsters to steal $230 million from the company and using its documents to obtain another $230 million from the Russian treasury through fraudulent tax refunds. Hermitage’s latest complaint, according to the Washington Post, accused “several bureaucrats in two Moscow tax agencies of involvement in the crimes and lists more than 30 suspicious tax refunds issued by the agencies between 2006 and 2008, as well as the account numbers of the recipients.” . . .

Read the entire post on The FCPA Blog www.fcpablog.com

Halliburton May Face U.K. Charges

Halliburton disclosed Friday in its latest SEC filing that the U.K.’s Serious Fraud Office (SFO) may bring civil claims or criminal charges against it under various British laws. In February this year, Halliburton and its former subsidiary, Kellogg Brown & Root LLC, admitted paying Nigerian officials at least $182 million in bribes for contracts awarded between 1995 and 2004 to build liquefied natural gas facilities on Bonny Island, Nigeria. The companies agreed with the U.S. Justice Department to pay a $402 million criminal fine, with Halliburton paying $382 million of that amount. Halliburton also agreed with the Securities and Exchange Commission to be jointly liable with KBR to pay $177 million in disgorgement. . . .

Read the entire post on The FCPA Blog www.fcpablog.com