Archive for the ‘Double Standard’ Category

What’s The Difference?

Tuesday, July 7th, 2015

JebAs readers no doubt are aware, since August 2013 JP Morgan has been under FCPA scrutiny for its alleged hiring of so-called Chinese princelings (family members of alleged Chinese officials) to curry favor with Chinese officials in a position of influence over its business.

JP Morgan’s FCPA scrutiny soon lead to an industry sweep of the financial services industry concerning hiring practices in China and other Asian countries. Among the other banks under scrutiny are: Bank of New York Mellon Corp., Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sach Group Inc., Morgan Stanley, and UBS AG.

Given the industry, the FCPA scrutiny has generated a significant amount of critical commentary.  For instance, in this Wall Street Journal editorial former SEC Commissioner Arthur Levitt called the FCPA scrutiny of the financial industry “scurrilous and hypocritical.”  He wrote:

“If you walk the halls of any institution in the U.S.—Congress, federal courthouses, large corporations, the White House, American embassies and even the offices of the SEC—you are likely to run into friends and family members of powerful and wealthy people.”

Double standard aside, in response to the FCPA scrutiny FCPA Inc. churned out clients alerts and other publications regarding best practices for hiring family members of foreign officials.

The following best practices were rightly noted (see here and here).

  • Check the educational and professional qualifications of the individual being considered for employment and ensure that they are appropriate for the position being filled.  Evidence that a relative of a government official was hired into a position for which he or she was not qualified will likely result in a finding that they were hired for improper purposes.
  • Ensure that the salary and treatment given to the relative of the government official is commensurate with the position and consistent with other individuals in a similar position.  Evidence that the relative of the government official is receiving a salary significantly higher than other individuals at a similar level and occupying similar positions suggests the additional funds may be provided to influence the related government official.
  • Confirm that the position was not created specifically for the relative of the government official.  Evidence that the position was created for a specific person will suggest that the company’s sole purpose in hiring the individual was to gain influence with the government official.
  • Make certain that, to the extent possible, the responsibilities of the relative of the government official do not fall in the realm of conduct over which the government official holds regulatory or other decision making authority.  For example, a relative of a government official charged with bank oversight should not be hired as the compliance officer for a bank subject to that authority.  Similarly, the hiring decision-maker should be independent of the business unit that may interact with the government official.
  • “An individual whose sole qualification for a prestigious Wall Street gig is a powerful mother or father in the … government should raise red flags.” If an individual “is not otherwise qualified for the position at [a] financial services company, the DOJ and SEC will ask about the basis for the hiring.”

Against this backdrop, as highlighted in this recent New York Times article:

“As [former Florida Governor and Republican Presidential Candidate Jeb] Bush sought to create a personal fortune for himself and his family after eight years in public office, he found a ready source of income: speeches sponsored by corporations and industry trade groups, including some that benefited from his administration’s policies.

Since 2007, Mr. Bush has delivered about 260 paid speeches, earning around $10 million in the process, according to records provided this week by his presidential campaign. The speeches, combined with his consulting and investment businesses, rapidly transformed his finances: His and his wife’s net worth soared to at least $19 million from $1.3 million over the past eight years.

The wealth he amassed from the speaking circuit pales in comparison to that collected by Hillary Rodham Clinton, a Democratic candidate. But it underscores the ease with which political figures can turn their public prominence into private riches.”

As relevent to the FCPA scrutiny of the financial services industry, as recently highlighted here by the Wall Street Journal, a release of Mr. Bush’s tax returns reveals that “over about six years as an adviser for the defunct Wall Street bank Lehman Bros. and later Barclays PLC, Mr. Bush earned, on average, between $1.3 million and $2 million.”

If the above bullet-point best practices were asked in connection with Mr. Bush’s adviser positions with Wall Street Banks, would what the answer be?

If the answers turned out to be the same as the answers regarding Wall Street’s FCPA scrutiny for allegedly hiring Chinese princelings, what’s the difference?

Let’s call a spade a spade.

We have princelings in this country too as well as individuals who bounce in and out of politics and “private” life so often that they are effectively part of the political class regardless of the precise moment in time in which the question is posed.

Senator Grassley Is Right To Ask The Questions That Need To Be Asked

Monday, July 6th, 2015

GrassleyBecause Senator Chuck Grassley is a Republican and Hillary Clinton is a Democrat, it would be easy to dismiss the underlying issues as merely political gamesmanship.

However, if that is your reaction to this recent letter from Senator Grassley to U.S. Attorney General Loretta Lynch (and others) it would be unfortunate because the underlying issues go to the glaring double standard that has frequently been highlighted on FCPA Professor.

The double standard being how business interactions with “foreign officials” seem to be subject to different standards than business interactions with U.S. officials.

Senator Grassley’s letter concerns allegations first raised in this New York Times article (see also here) concerning the “Clinton Foundation’s tie to a number of investors involved in a business transactions that resulted in the acquisition of Uranium One, owner of U.S. based Uranium assets, by a subsidiary of Rosatom, a Russian government owned company.

As stated in Senator Grassley’s letter:

“[D]uring critical stages of the acquisition approval, interested parties made large donations – some in the millions of dollars – to the Clinton Foundation while Ms. Hillary Clinton held the position of Secretary of State. When millions of dollars flow to decision makers who have substantial discretion to provide support for or against approval of controversial transactions, public confidence in the integrity of the process requires a commitment to transparency and responsiveness to oversight inquiries.”

The Uranium One deal is merely one of several criticisms or concerns of financial ties between the Clinton Foundation and various business interests.  See here, here, here, here, here, here, here, here, here and here. In fact, new revelations and findings are so numerous it is hard to keep up.

In this recent Breitbart news article I stated as follows.

“When asked if the donations to the Clinton Foundation by defense contractors including Boeing (which subsequently received State Department approval of sales of their products to foreign governments) constituted a violation of domestic bribery statues, Law School Professor and Foreign Corrupt Practices Act (FCPA) expert Michael Koehler tells Breitbart News, “I’ll answer that question by quoting a former law professor who was fond of saying ‘if it walks like a duck and quacks like a duck chances are it is a duck’”

I was an intern in the Clinton White House and I generally admired the Clintons.  However, with each new revelation or finding, it is hard not to see several potential double standards.

After all, several FCPA enforcement actions have been based on donations to charities or foundations favored by “foreign officials” and/or things of value provided to family members of “foreign officials.”

Recently, I was contacted by an individual who has a brother in federal prison for violating the FCPA.  The individual asked why is my brother in federal prison while Hillary Clinton is running for President?

As a professor, I always strive to give substantive, well-reasoned answers to questions? However, with this one, I was left scratching my head.

Euphemisms, Code Words and Metaphors About Bribery And Corruption

Monday, June 15th, 2015

double standardThis recent post on the FCPA Blog highlighted euphemisms, code words, and metaphors used by corporate employees in certain bribery and corruption cases.

All worthy observations.

But also consider that several institutional euphemisms, code words and metaphors are used to describe what many would call bribery and corruption here in the United States.

Consider U.S. government diplomats who act as “marketing agents” for U.S. companies and help broker sales with foreign governments.  As detailed by the New York Times:

“The king of Saudi Arabia wanted the United States to outfit his personal jet with the same high-tech devices as Air Force One. The president of Turkey wanted the Obama administration to let a Turkish astronaut sit in on a NASA space flight. And in Bangladesh, the prime minister pressed the State Department to re-establish landing rights at Kennedy International Airport in New York. Each of these government leaders had one thing in common: they were trying to decide whether to buy billions of dollars’ worth of commercial jets from [a U.S. company] or its European competitor, Airbus. And United States diplomats were acting like marketing agents, offering deals to heads of state and airline executives whose decisions could be influenced by price, performance and, as with all finicky customers with plenty to spend, perks. […] To a greater degree than previously known, diplomats are a big part of the sales force, according to hundreds of cables released by WikiLeaks, which describe politicking and cajoling at the highest levels.”

In short, is there a difference between the U.S. government using public taxpayer money to offer or pay a foreign government to induce the government to purchase U.S. company product and a company using private shareholder money to offer or pay a foreign official to induce the government to purchase its product?  Why does the U.S. government construct programs around the former and call it “foreign military financing” or “foreign military sales” while criminally prosecuting the later as bribery?

As to this issue, it has been noted that “the [U.S.] government wants to give the impression that it is law-abiding and others are not when the same behavior is engaged” in by both and that “when the government itself gives bribes in foreign countries every day of the week, they just call it foreign aid.”

Does the difference highlight that in the United States the dividing line between bribery and no bribery is subtle and dependent on the source of the money and influence? It has been noted:

“It’s not that the United States lacks corruption, [...]— or even pervasive corruption.  It’s just not of the low-level and petty variety like the kind [in certain emerging market countries like Africa], not most of the time anyway.  In America, corruption is concentrated at the highest levels of society — and it masquerades [under different names].”

Similarly, the subtle differences between foreign bribery and U.S. bribery have been described:

“The idea of corruption … is simple bribery — cash changing hands. It’s the proverbial cash in the piano or the freezer. Corruption is reduced to bribery. In fact, today’s most savvy power brokers are engaged in a kind of corruption that is much more subtle and more difficult to detect. Today’s most corrupt players, at least in the West, don’t need this quid pro quo corruption. They are far beyond that. That’s for the little players. That’s for the small fry.”

Bribery ought to be bribery pure and simple and subtle distinctions ought not be drawn on the source of the money and influence.  Doing so merely creates a distinction without a difference.  Indeed, perhaps because of this uncomfortable truth regarding the U.S. crusade against bribery, U.S. government enforcement agencies frequently employ overblown and inconsistent rhetoric when describing FCPA enforcement.

As to certain U.S. examples of what many would consider bribery and corruption, the legality of such conduct has been countenanced by the U.S. Supreme Court in both Citizens United and McCutcheon because, in the words of the court, “ingratiation and access are not corruption.” Likewise, as to corporate lobbying in the U.S., the Second Circuit recently stated:

“Lobbying has been integral to the American political system since its very inception.  […] In order to more effectively communicate their clients’ policy goals, lobbyists often seek to cultivate personal relationships with public officials. This involves not only making campaign contributions, but sometimes also hosting events or providing gifts of value such as drinks, meals, and tickets to sporting events and concerts.”

Yet, it is difficult to square the above judicial logic with the allegations in many FCPA enforcement actions which equate “ingratiation and access,” with a certain type of public official, or providing various things of value to a certain type of public official, as corruption.

Regarding unchecked political contributions in the U.S., President Jimmy Carter termed it “legal bribery of candidates.” Recall that President Carter signed the FCPA into law in 1977 and was praised for doing so.

How should we react to President Carter speaking out about another form of bribery?

So yes euphemisms, code words, and metaphors are often used by corporate employees in certain bribery and corruption cases.

However, we also have several institutional euphemisms, code words and metaphors to describe what many would call bribery and corruption here in the United States.

A Bi-Partisan Edition Of The Double Standard

Wednesday, June 3rd, 2015

Bipartisian

Numerous previous post on FCPA Professor have highlighted the double standard between enforcement of the Foreign Corrupt Practices Act and enforcement of 18 U.S.C. 201, the domestic bribery statute.

After all, in many respects the FCPA was modeled after the domestic bribery statute and it has very similar elements to the FCPA’s anti-bribery provisions.

The theme explored in the numerous double standard posts is how business interactions with “foreign officials” seem to be subject to different standards than business interactions with U.S. officials.  The issues that arise include the following:

  • Why do we reflexively label a “foreign official” who receives “things of value” from private business interests as corrupt, yet generally turn a blind eye when it happens here at home or call it something different such as participation in the political process?
  • Is the FCPA enforced too aggressively or is enforcement of the U.S. domestic bribery statute too lax?
  • Ought not there be some consistently between enforcement of the FCPA and the domestic bribery statute?

Consider the following.

A billionaire business executive bankrolls a high-ranking politician’s campaign, finances the politician’s legislative agenda, and subsidizes the politician’s “personal finances, as the rising politician and his wife grappled with heavy debt and big swings in their income.”

Or consider the following.

A company supports (and indeed would benefit from) the trade agenda of a high-ranking government official and hosts the official at its company headquarters for a speech.  During the visit, the company gives the official a hard to obtain product that the company knows is subjectively valued by the official.

In both scenarios, a prudent FCPA practitioner would immediately see the “red flags;” counsel the companies at issue to conduct an internal investigation as to the conduct at issue and related conduct; and – mindful of the enforcement agencies guidance and cognizant of the carrots and sticks they posses – likely suggest voluntarily disclosure of the investigative findings.

But wait.

The above high-ranking government officials were not “foreign officials” – they were U.S. government officials.

The first scenario involves Republican Senator and Presidential hopeful Marco Rubio.

According this New York Times article:

“[Billionaire auto dealer Norman Braman] has left few corners of Mr. Rubio’s world untouched. He hired Mr. Rubio, then a Senate candidate, as a lawyer; employed his wife to advise the Braman family’s philanthropic foundation; helped cover the cost of Mr. Rubio’s salary as an instructor at a Miami college; and gave Mr. Rubio access to his private plane.

The money has flowed both ways. Mr. Rubio has steered taxpayer funds to Mr. Braman’s favored causes, successfully pushing for an $80 million state grant to finance a genomics center at a private university and securing $5 million for cancer research at a Miami institute for which Mr. Braman is a major donor.

Even in an era dominated by super-wealthy donors, Mr. Braman stands out, given how integral he has been not only to Mr. Rubio’s political aspirations but also to his personal finances.”

[...]

Pressed on his financial ties to Mr. Braman, Mr. Rubio said in an interview that he saw no ethical issue. “What is the conflict?” he asked. “I don’t ever recall Norman Braman ever asking for anything for himself.”

He acknowledged that Mr. Braman had approached him about state aid for projects, such as funding for cancer research, but said that he had supported the proposals on their merits.”

The second scenario involves President Obama.

As highlighted here during Obama’s recent visit to Nike headquarters to promote his trade agenda, the company provided Obama, an avid basketball player and fan, with an exclusive pair of top secret Air Jordan sneakers as well as a pair of specifically designed presidential sneakers in a custom presidential box.

I’d like to think that President Obama has countless reasons to support his trade agenda and is unlikely to be influenced one iota by Nike providing him something of value.

By why then do FCPA enforcement actions simplistically allege that foreign officials (who no doubt have countless reasons to engage in the discretionary acts that underlie the FCPA scrutiny) are influenced by handbags, evenings at Karaoke bars, flowers or even cigarettes?  (In case you wondering, those are actual allegations from recent FCPA enforcement actions).

While you ponder the above questions, just remember, in the words of a high-ranking DOJ official:

“We in the United States are in a unique position to spread the gospel of anti-corruption, because there is no country that enforces its anti-bribery laws more vigorously than we do.”

Friday Roundup

Friday, May 1st, 2015

Roundup2Exasperated, skittish, checking in, scrutiny alerts and updates, and for the reading stack.  It’s all here in the Friday roundup.

Exasperated

This recent post highlighted Assistant Attorney General Leslie Caldwell’s recent speech in which she stated – in reference to FCPA internal investigations – “we do not except companies to aimlessly boil the oil.”

This recent Law360 article notes that some attorneys are exasperated by Caldwell’s remarks.  The article states:

“[D]efense attorneys have balked at the idea that they’re spending too much time or money on investigations they’re conducting in large part for the government’s sake, saying they’re not willfully adding unnecessary work to an FCPA probe.

Many companies still feel like they’re being forced to walk the fine line between investigating problems thoroughly enough to satisfy the government without making it seem like they’re holding something back or impeding an investigation, according to Day Pitney LLP partner Bob Appleton.

“On the one hand they’re saying, ‘Be fast and don’t do an over-thorough job,’ but on the other hand, they’re saying, ‘If you only partially disclose you’ll get in trouble,’” said Appleton, a former assistant U.S. attorney.

And the costs of an investigation aren’t just limited to what a company self-reports, since the government will often then ask how the company can be sure the problem isn’t popping up anywhere else, according to Colleen P. Mahoney, partner at Skadden Arps Slate Meagher & Flom LLP.

“One of the biggest challenges is the expense after it starts,” Mahoney said about FCPA investigations at a Practicing Law Institute event Friday.

At the PLI event, SEC enforcement chief Andrew Ceresney said it was up to a company to decide what law firm to retain and how deep to investigate a potential bribery matter.

“We’re not micromanaging your internal investigation,” he said.”

Numerous posts on FCPA Professor have highlighted the staggering amount of pre-enforcement action professional fees and expenses (see also “FCPA Ripples“).

Speaking of which, Key Energy Services disclosed yesterday $18 million in expenses – for the first quarter of 2015 -”related to the previously disclosed Foreign Corrupt Practices Act (“FCPA”) investigations.”

I’ve had several conversations with FCPA practitioners about this issue.  For what it is worth, the common response is something along the following lines: FCPA practitioner agrees that pre-enforcement action professional fees and expenses have spun out of control in many instances, but FCPA practitioner insists that his/her firm is not part of the problem.

Other practitioners are also pushing back as to other aspects of Caldwell’s recent speech – namely “what cooperation looks like”.  In this recent post on the FCPA Blog an anonymous contributor states:

 ”When client companies and I have opted to cooperate early on and open up all information and records to the DOJ investigative units, I have seen the FCPA investigative team to be less interested in whether facts or evidence show violations or point to evidence raising red flags, as to how the client (and lawyer also) is bowing and mewling in anguish and sorrow before the government.

Provided the client is willing to genuflect and cry out mea culpa and beg for mercy (all three are required) there can be a happy and acceptable outcome in correcting corporate deficiencies and reaching an early valid resolution.

Executives who have somewhat less capacity to grovel underfoot are punished with the promise of crippling expansions of the process including raids and countless subpoenas to uninvolved officers, employees, consultants and accountants.

My experience is that this is not based on early findings of probable cause, but rather a haughty outrage that there was insufficient willingness to self-immolate.”

Skittish

Much has been written about whether the FCPA and its enforcement deters foreign investment.  (See here for instance).

Companies obviously make foreign investment decisions based on a host of legal and non-legal risks and thus empirically separating and measuring the impact of FCPA enforcement on foreign investment decisions is difficult.  Moreover, despite the general rise in FCPA enforcement concerning conduct in certain high risk jurisdictions such as China, India, and Brazil, there continues to be vast amounts of foreign direct investment in those countries by companies subject to the FCPA prohibitions.

Any “evidence” that the FCPA and its enforcement deters foreign investment thus tends to be anecdotal.

Following up on this prior post regarding Cambodia, the Phnom Penh Post reports:

“Despite high-profile US companies like Coca-Cola announcing plans to expand their footprint in the Kingdom, foreign investment from the US remains low compared to regional heavyweights. Large US businesses appear reluctant in setting up in the Kingdom due to corruption concerns, an unpredictable regulatory environment, and a lack of economic attractiveness that allows US interests to thrive.

[...]

Corruption remains one of the major factors keeping US companies away. According to an American Chamber of Commerce survey for 2015, 82 per cent of American businesses in Cambodia were dissatisfied with corruption – the second highest in the region after Laos.”

Checking In

Way back in 2010, Steven Jacobs, the former President of Macau Operations for Las Vegas Sands Corp., filed a civil lawsuit against Las Vegas Sands (LVS) in which Jacobs alleged various improprieties at LVS including in the FCPA context.

As noted in this Bloomberg article, Sheldon Adelson, the billionaire founder and chairman of LVS, recently testified in open court about the case and stated, among other things, that “after four years of investigating, they [the DOJ and SEC]  haven’t found a shred of evidence yet.”

Scrutiny Alerts and Updates

CSC / ServiceMesh

CSC is a Virginia-based IT company and in October 2013 it acquired acquire ServiceMesh, a cloud management company.  Various reports note that Eric Pulier, the former CEO of ServiceMesh, and head of the ServiceMesh division within CSC since ServiceMesh was acquired by that company, has left the company.

CSC sent the following statement to media about Pulier’s departure:

“On March 26, 2015 Eric Pulier was notified that his actions involving payments from the ACE Foundation—an organization founded by Mr. Pulier and not related to CSC—to former IT executives of Commonwealth Bank of Australia, a CSC client, violated CSC’s code of conduct related to conflicts of interests and appearance of improprieties. Mr. Pulier was further notified that these violations were grounds for termination of his employment.”

PTC

In this release, PTC stated:

“We have, since making a voluntary disclosure to the U.S. Securities and Exchange Commission and the Department of Justice, been cooperating to provide information to those agencies concerning expenditures by certain of our business partners in China and by our China business, including for travel and entertainment, that apparently benefitted employees of customers regarded as state owned enterprises in China. This matter involves issues regarding compliance with laws, including the U.S. Foreign Corrupt Practices Act. Negotiations with the SEC to reach a resolution of its investigation have begun but have not been concluded. We expect to begin negotiations with the Department of Justice to resolve its investigation in the near future. Resolution of this matter is likely to include fines and penalties. Given the uncertainty regarding whether settlements can be reached and, if reached, on what terms, we are not able to estimate a range of reasonably possible loss with regard to any such settlements and have not recorded any liability in connection with this matter. If settlements are reached, we believe that the associated financial liability could be material to our results of operations for the fiscal period in which the liability is recorded. Further, any settlement or other resolution of this matter could have collateral effects on our business in China, the United States and elsewhere.”

Braskem SA

Brazil-based Braskem recently disclosed in an SEC filing:

“In the context of anti-corruption allegations against certain individuals and entities in Brazil, including Petrobras, we were mentioned in allegations of improper payments made in order to receive favorable treatment in connection with certain contracts that we are party to with Petrobras. We have not received notice of any proceeding or investigation involving us that has been commenced in Brazil or the United States in connection with these allegations.

Although we have certain procedures in place, we have implemented additional procedures and controls to monitor our compliance with applicable anti-corruption laws and as a result of the recent allegations against us, have engaged Brazilian and U.S. legal counsel to conduct a voluntary internal investigation of this matter.  If any of these allegations prove to be true, or if we or any of our subsidiaries, or joint venture partners fails to comply with any of these laws, we could be subject to applicable civil or criminal penalties, which could adversely affect our overall performance.”

[…]

In early March 2015, declarations made by defendants in lawsuits filed against third parties were made public, in which Braskem and two of its former executive officers were cited in allegations of supposed improper payments between 2006 and 2012 to benefit the Company in raw-material supply agreements entered into with Petrobras. As of April 24, 2015, to the knowledge of the management, Braskem has not received any notification of the filing of any proceeding or investigation by Brazilian or U.S. authorities.

In light of such facts, the Company’s Management and Board of Directors approved in April the internal plan for investigation into the allegations (“Investigation”) to be carried out by law firms experienced in similar cases in the United States and in Brazil.  The law firms will work under the coordination of an ad hoc committee formed by members of its Board of Directors, specially created for this purpose.

In addition, the following measures have already been taken:

i)    Voluntary announcement about the Investigation and periodical updates sent to regulatory agencies of capital markets in Brazil (Securities and Exchange Commission of Brazil – CVM) and the United States (Securities and Exchange Commission – SEC, and the Department of Justice – DOJ);

ii)    Publication of two Material Fact notices and one Notice to the Market to clarify the news reports and to keep shareholders and the market informed of actions taken by the Company;

iii)   Updating the Audit Board and external auditors about the progress of the Investigation and of the actions already taken.

Braskem and its subsidiaries are subject to a series of anticorruption and anti-bribery laws in the countries where they operate. To reduce the likelihood of infringement of such laws, a series of procedures and controls were implemented and are continuously being improved.

On the other hand, if any of the allegations proves to be true, the Company may be subject to material penalties envisaged in law. At this moment, the Company Management believes that it is not possible to estimate the duration or outcome of the Investigation and, consequently, whether it will have any impact on future financial statements.

The Management is committed to taking all the necessary measures to clarify the facts and will keep the market informed of any progress on this matter.”

United Technologies

Recently, the company disclosed:

“As previously disclosed, in December 2013 and January 2014, UTC made voluntary disclosures to the United States Department of Justice (DOJ), the Securities and Exchange Commission (SEC) Division of Enforcement and the United Kingdom’s Serious Fraud Office to report the status of its internal investigation regarding a non-employee sales representative retained by United Technologies International Operations, Inc. (UTIO) and IAE for the sale of Pratt & Whitney and IAE engines and aftermarket services, respectively, in China.  On April 7, 2014, the SEC notified UTC that it was conducting a formal investigation and issued a subpoena to UTC.  UTC continues to cooperate fully with the investigations and has responded to requests for documents and information.  The DOJ and SEC also continue to request information, and the SEC issued a second subpoena on March 9, 2015 seeking documents related to internal allegations of alleged violations of anti-bribery laws from UTC’s aerospace and commercial businesses, including but not limited to Otis businesses in China.  Because the investigations are ongoing, we cannot predict the outcome or the consequences thereof at this time.”

For the Reading Stack

The NY Times goes in depth regarding the U.S’s attempt to extradite Dmitry Firtash, a Ukrainian national criminally indicted in April 2014 along with others (see here for the prior post).  According to the article:

“An Austrian judge will issue a crucial ruling in the case on Thursday at an extradition hearing here, where Mr. Firtash’s lawyers will argue that his arrest — on charges of bribing officials in India to secure a titanium mining deal that never materialized — was really an effort by the United States to remove him from public life in Ukraine, where he controls major business interests and still holds considerable clout. The Justice Department has repeatedly declined to discuss the case because it is an active prosecution, but the United States attorney’s office in Chicago, which led the investigation, has flatly denied any political motivations.

[...]

Andras Knopp, a Hungarian businessman and longtime associate of Mr. Firtash’s who is also charged in the case, said that the United States authorities had made no effort to extradite him, or even to talk to him about the case, even though he was at the center of the Indian titanium deal …”.

*****

The most recent edition of the always informative Debevoise & Plimpton FCPA Update is here.  Among the topics discussed are developments in India including potential amendments to the Prevention of Corruption Act providing for liability for a commercial organizations whose employees bribe but also creating a defense for a commercial organization commercial organization if it can prove it had “adequate procedures” in place to prevent bribery.

*****

This Bloomberg article (“The Dinner Proposal That Led United Into Corruption Probe”) begins:

“United Airlines Inc. was seeking hundreds of millions of dollars in public investment for the airport in Newark when its chief executive dined with New Jersey Governor Chris Christie’s top Port Authority official in September 2011.

Jeffery Smisek, United’s chief executive officer, wanted funding for several projects, including an estimated $600 million extension of the PATH train from downtown Newark to the airport, as the airline worked through its merger with Continental Airlines.

Halfway through dinner at Novita, an Italian restaurant in Manhattan, Port Authority Chairman David Samson surprised the group with a request of his own. He complained that he and his wife had grown weary of the trip to their weekend home in Aiken, South Carolina, because the best flight out of Newark was to Charlotte, North Carolina, 150 miles away. Until 2009, Continental had run direct service from Newark to Columbia, South Carolina, 100 miles closer.

In a tone described by one observer as “playful, but not joking,” Samson asked: Could United revive that route? An awkward silence fell over the table.

Though the United CEO didn’t agree to the request at the dinner, according to the accounts of some who attended, the airline ultimately added the money-losing route that became known as “the chairman’s flight.” Now federal prosecutors are looking into whether its genesis crossed the line from legitimate bargaining into illegal activity.”

*****

A good weekend to all.