Monday, November 15, 2010

Kevin Ring Convicted Yet DOJ Wants More in an Honest Services Statute

According to a DOJ Press Release, "a federal jury in Washington convicted Kevin A. Ring, a former lobbyist who worked with Jack A. Abramoff, on five counts related to a scheme to corrupt public officials by providing a stream of things of value."  The Press Release states that:

"The jury found Ring guilty on one count of conspiring to corrupt congressional and executive branch officials by providing things of value to them and their staff in order to induce or reward those who took official actions benefitting Ring and his clients.   In addition, Ring was convicted of one count of paying a gratuity to a public official and three counts of honest services wire fraud for engaging in a scheme to deprive U.S. citizens of their right to the honest services of certain public officials.   The jury acquitted Ring on three counts of honest services fraud.   A previous federal jury failed to reach a verdict in the case and the court declared a mistrial."

Interestingly, this verdict comes on the heels of a response by Assistant AG Lanny Breuer to a question by Senator Patrick Leahy, where Breuer claims that there is a need to revise the honest services statute post Skilling. The Court's decision in the Skilling case had limited honest services to "bribery and kickbacks."  Breuer's first answer to a question posed to him tells of two cases where honest services premised on self-dealing was charged - but in both instances he says that it was in addition to bribery charges.  If bribery was present in these two cases, then why should Congress revise the mail fraud statute?  DOJ fails to present a specific need for this legislation.

Breuer then proceeds to state that "without a legislative fix, it will be more difficult and, in some instances, impossible to prosecute federal officials, as well as state and local officials for significant corrupt conduct."  See letter -Download Breuer_Answers  But he can provide no cases and his reasoning for not using existing statutes like section 208 is because this statute is not a predicate for a RICO charge, while mail fraud does serve this function. Is Assistant AG Breuer telling us that he can't circumvent the limits of RICO without this mail fraud fix? Is he saying that Congress should extend a statute so that he can get around congressional intent in the RICO statute?  It's also, he says, because he needs honest services as a predicate for Title III wiretaps. Here again is he saying that he can't circumvent the limits of Title III wiretaps without having a loose mail fraud statute that allows DOJ to use and abuse their discretion. 

With a conviction in the Ring case, it is hoped that the Senate will look closely at the rationale offered by DOJ for needing to expand the honest services provisions of the mail fraud statute. It is also hoped that DOJ will think twice about allowing the possible use of mail fraud to circumvent the existing RICO and wiretap mandates. It is a sad day when prosecutors ask for more power in a statute so that they can use it to circumvent existing laws. 

(esp)

November 15, 2010 in Fraud, Verdict | Permalink | Comments (0) | TrackBack (0)

Sunday, November 14, 2010

DOJ Settles Seven FCPA Cases and Announces New Minimum Standards for Corporate FCPA Compliance Programs

Michael Volkav of Mayer Brown writes:

The Department of Justice and Securities and Exchange Commission (SEC) resolved seven FCPA cases last week involving the oil and gas industry.  The cases involved bribes to numerous foreign officials relating to the import of goods and materials in foreign jurisdictions.  To resolve the investigations each company entered into a deferred prosecution agreement and a total of nearly $122 million in fines were paid. 

Each of the Deferred Prosecution Agreements included an attachment entitled “Corporate Compliance Program,” which reflect DOJ’s current position on minimum standards for FCPA compliance programs.  The standards require, among other things,

i.       clearly articulated and visible policies against violations of the FCPA,

ii.      visible corporate support of such policies,

iii.     implementation of compliance standards and procedures designed to reduce FCPA violations, and

iv.     the assignment of responsibility for the implementation and oversight of such policies, standards and procedures to “one or more senior corporate executives.”

 (mv)

November 14, 2010 | Permalink | Comments (2) | TrackBack (0)