January 20, 2012
New Scholarship - Globalized Corporate Prosecutions
I highly recommend Professor Brandon L. Garrett's new piece in the Virginia Law Review titled, "Globalized Corporate Prosecutions." The abstract states:
"In the past, domestic prosecutions of foreign corporations were almost unheard of. This has changed dramatically just in a few years. Federal prosecutors now advertise a muscular approach targeting major foreign firms and even entire industries. High-profile prosecutions of foreign firms have shaken the international business community. Very little has been known about these cases; scholars assumed such prosecutions were rare or would not result in convictions. After all, corporate criminal liability is itself a form of American Exceptionalism. Few foreign countries hold corporations criminally accountable. To study U.S. prosecutions of foreign firms, I assembled a database of more than 300 publicly reported corporate guilty plea agreements from the past decade and I analyzed previously unexamined U.S. Sentencing Commission data archives on corporate prosecutions. Not only are large foreign firms prosecuted with some frequency, but more surprising, they typically plead guilty and are convicted. In this Article, I explore the puzzle of that unnoticed guilty plea dynamic and the disquieting problems raised by convictions of foreign firms generally. Federal prosecutors have dramatically expanded enforcement against foreign firms in several areas. I develop theoretical justifications for the evolving prosecution approach. Yet I conclude by arguing that prosecutions of foreign firms should be more clearly limited and evaluated. A series of reforms could accomplish that goal, including prosecutorial guidelines incorporating norms of comity, foreign law and governance norms. Unless prosecutors and courts carefully assess these important prosecutions, U.S. prosecutors will not remain preeminent the global corporate criminal law enforcers."
The Lesson of Joe Paterno
Yesterday's New York Times has an extremely lengthy but disappointingly unilluminating article about the firing by the Penn State Board of Trustees of legendary football coach Joe Paterno (and also Penn State president Graham Spanier) for purportedly failing to take adequate action after being informed that former coach Jerry Sandusky had molested a boy in a Penn State locker room shower (discussed earlier here, here). The article reports that the Board telephoned Paterno and said, "The Board of Trustees has determined effective immediately you are no longer the football coach." Paterno immediately hung up. Shortly thereafter, his wife called the Board and said, "After 61 years he deserved better."
I agree with Mrs. Paterno. In the months since the Penn State grand jury report became public, I have seen nothing that to me indicates that Paterno acted improperly by promptly reporting the alleged incident to his superiors, even if not to law enforcement.
The lesson of Paterno's firing appears to be that, even if not required by statute or internal rule, one in authority in a corporation, government agency, institution of learning, or similar entity, should protect himself by reporting any tenable allegation of sexual abuse, whether or not substantiated and whether or not he believes it, to law enforcement. While such a rule might protect the reporter from termination, it might lead to a heyday for defamation lawyers, as well as severe harm to innocent people.
January 19, 2012
Indicting Criminal Defense Counsel for Trial Misconduct
Mike Scarcella over at the BLT Blog has an interesting piece titled, D.C. Attorney, Charged In Scheme, Fights Prosecutors Over Evidence. But what sounds unusual here is that the attorney is charged based upon testimony from a client that he represented, who is now cooperating with the government and the charges stem from alleged misconduct during the trial.
Even if these allegations of trial misconduct prove to be true, one has to wonder why this wasn't handled via cross-examination or through objections to the admission of the evidence at trial. Is this a professional responsibility problem, a contempt problem, or should this be considered criminal? And did counsel do anything wrong?
When defense counsel is charged with a crime for trial misconduct, it needs to be scrutinized carefully as the process can have a chilling effect on the right to counsel. And it certainly needs to be looked at very closely when the case is premised on a former client's cooperation. So isn't this just the kind of case that all discovery should be turned over to the defense so that justice can occur?
January 18, 2012
In the News & Around the Blogosphere
Basil Katz, Reuters, 7 charged in $62 million Dell insider-trading case
In the News & Around the Blogosphere
Shannon Green, Corporate Counsel, DOJ Collected $1 Billion-Plus in 2011 Antitrust Fines
Newsday (Published by LATimes), Illness postpones Edwards corruption trial
NYTimes, Op Ed, On the Trail of Mortgage Fraud
Edvard Pettersson, Bloomberg, Foreign Bribery Defendants May Fight More as Cases Falter (w/ a hat tip tp Ivan Dominguez)
DOJ Press Release, Marubeni Corporation Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay a $54.6 Million Criminal Penalty - $1.7 Billion in Total Penalties and Forfeiture Orders Obtained for Scheme to Bribe Nigerian Government Officials to Obtain Contracts
January 17, 2012
Post-Skilling Remand Includes Spillover
The Third Circuit in United States v. Wright held that the Skilling decision requires an new trial in this case on the honest services fraud convictions and that "prejudicial spillover tainted their traditional fraud convictions." The court stated:
"An honest services fraud prosecution for bribery after Skilling thus requires the factfinder to determine two things. First, it must conclude that the payor provided a benefit to a public official intending that he will thereby take favorable official acts that he would not otherwise take. Second, it must conclude that the official accepted those benefits with the intent to take official acts to benefit the payor."
The court also stated that, "[i]n light of Skilling, the jury should have been instructed on the bribery theory but not the conflict-of-interest theory."
January 15, 2012
Federal Organizational Plea Agreements Website
Professors Brandon Garrett and Jon Ashley have an incredible new website that is a library of 1495 federal corporate plea agreements in which an organization was convicted. They intend to update this collection of agreements. The site has the agreements by date, U.S. Attorney Office district and name. The site also provides links to other helpful data concerning corporate convictions. This is an amazing website that provides a wealth of information.
More Discovery Issues - Petition for Cert Filed in Brown Case Looks at Brady
The cert petition in James A. Brown v. United States (11-783) raises interesting questions regarding Brady. Brown, a former Merrill Lynch executive "was convicted of perjury and obstruction of justice for his testimony before the Enron grand jury about a transaction between Merrill and Enron in late 1999." This case was part of the "Enron barge transaction" investigation. The cert petition states that "prosecutors steadfastly denied that they possessed any Brady evidence and claimed that their production of nineteen pages of court-ordered 'summaries' exceeded their constitutional obligations." The Fifth Circuit later found the "evidence was exculpatory and 'plainly suppressed,' but 'not material.'" This was despite the fact that items had been "yellow-highlighted" by prosecutors as "selected exculpatory statements in the evidence they submitted for the district judge's pretrial in camera review." Years after the trial "new prosecutors disclosed thousands of pages of actual notes, 302s, and testimony." This cases raises the issue of what is the correct standard of review under Brady and Kyles.
The petition asks the Court to "establish three clear rules to enforce the crucial constitutional protections established in Brady v. Maryland." It states:
"First, consistent with the majority of Circuits, this Court should establish that Brady decisions must be reviewed de novo. Second, this Court should reject the Fifth Circuit's novel and dangerous approach to determining materiality, and thereby refine and reinforce the Kyles test. Third, this Court should adopt and mandate the majority rule that exculpatory evidence is material per se if the government corrupts the adversary process by providing deficient summaries or affirmatively capitalizing on its suppression at trial."
Discovery issues need to be examined by the Court. This is a good case for the Court to stress the importance of defendants receiving timely discovery to allow for a fair and proper defense to the charges.
Petition for Cert - Download 2011 CERT PETITION FILED
Funk and Minder's Bloomberg Article Serves Up Comprehensive Defense of Incremental, Common Sense FCPA Reform
ABA Global Anti-Corruption Task Force Co-Chair T. Markus Funk and his Perkins Coie colleague M. Bridget Minder just authored "Bribery of Foreign Officials: The FCPA in 2011 and Beyond: Is Targeted FCPA Reform Really the “Wrong Thing at the Wrong Time”? in the Bloomberg Law Reports. This in-depth (6,000+ word) piece summarizes 2011 enforcement trends, but, more importantly, addresses head-on the various arguments raised against the growing call for targeted FCPA reform. For example, is incremental domestic FCPA reform really going to impact foreign anti-corruption efforts? To what extent should we care if it does? Why do the "Busting Bribery" authors' criticisms fall short of the mark? What public policy arguments favor targeted reform? For those following the reform debate, this publication represents the latest fresh thinking on this critically important subject.