Last week’s ABA sponsored National Institute on the Foreign Corrupt Practices Act in Washington, D.C. included an interesting panel discussion on FCPA trials.
Panelists included David Krakoff (Buckley Sandler – here who successfully represented John Mushriqui in the Africa Sting case and who currently represents Mark Jackson in an on-going SEC enforcement action), Paul Calli (Carlon Fields – here who successfully represented Stephen Giordanella in the Africa Sting case), Greg Andres (here who recently joined Davis Polk after serving as Deputy Assistant Attorney General of the Criminal Division) and Neil MacBride (U.S. Attorney for the Eastern District of Virginia). The panel was moderated by Jan Handzlik (Venable – here who successfully represented Keith Lindsey and Lindsey Manufacturing).
The focus of the panel was whether FCPA trials are unique. This post highlights the comments of the DOJ (plus Andres who very much spoke from the DOJ perspective, not surprising since he was the Deputy AG during the string of recent DOJ FCPA setbacks) and defense counsel.
MacBride began by carrying forward the DOJ’s FCPA talking points - namely that “DOJ enforcement of the FCPA is not going away.” MacBride said that one should not infer from the DOJ’s recent FCPA defeats that it will be retreating from this enforcement space or that sting operations will be taken off the table. As to whether FCPA trials are unique, MacBride said that “FCPA cases are not materially different from other complex white collar cases” and that it would be a “mistake” to view FCPA cases differently.
Andres began by noting that juries care about foreign bribery and he ticked off DOJ trial victories in the Haiti Teleco case, the case against Gerald and Patricia Green, and the case against Frederic Bourke. As for the Lindsey Manufacturing case, Andres reminded the audience that the jury actually convicted the defendants. Andres said that he did not agree with Judge Matz’s decision vacating the jury verdicts and dismissing the case (see here for the prior post). Andres also stated that FCPA cases are triable, that juries care, and that the DOJ has learned lessons from its recent string of FCPA defeats.
Krakoff, Calli, and Handzlik (all defense counsel in recent DOJ FCPA trials) persuasively argued that FCPA trials are indeed unique.
Krakoff stated that many of the elements of an FCPA anti-bribery offense (such as foreign official and corrupt intent) are murky and lend themselves to an in-depth development of the facts. He stated that it is not simply enough for the DOJ to demonstrate that some money passed hands, rather the DOJ must alo establish corrupt intent, what the defendant knew, and what the defendant intended. Krakoff also stated that a typical FCPA case involves agents and that there is some level of opaqueness as to what agents in any particular case may be doing. He stated that the use of agents in FCPA cases makes such cases different and requires an in-depth development of the facts at trial. Krakoff contrasted the prevalent use of agents in FCPA cases with other business fraud cases which typically do not involve agents. Krakoff also stated that a typical FCPA case often involves a business or an individual in good faith trying to do business in a foreign country and that in many cases the defendant has assurances that there is no “funny business going on.”
Calli, in his comments, also discussed the topic of good faith in the Africa Sting cases. He said that the irony of the many videotapes and recordings the jury saw and heard in the case was that the DOJ was trying to use this evidence as a sort of “gotcha” moment. However, Calli said that the jury saw and heard from the evidence was that issues went “over person’s heads” and that there was no “discernible recognition of anything.” Calli said that much of the evidence the DOJ offered in the Africa Sting case showed that the defendants lacked corrupt intent.
In his role as moderator of the panel, Handzlik also shared his view on why FCPA trials are unique. He stated that ”in the FCPA sphere you have people doing business in foreign markets, who are trying to sell their products, the defendants are not trying to kill people, they are not intent on committing fraud.” He stated that many FCPA defendants are legitimate business persons simply trying to sell something. Handzlik also spoke of agents in the FCPA context and how in many of the recent trials the DOJ’s evidence and focus was mostly directed towards an agent and the DOJ attempted to use a quasi respondeat superior-like theory by trying to impute agent knowledge and intent to the defendants. Handzlik noted that this is not the law and the DOJ’s quasi respondeat superior-like theories on this issue need to be flushed out pre-trial.
As the defense attorneys persuasively demonstrated, FCPA trials do indeed present some unique issues. It remains a mystery why the DOJ can’t accept this fact.