Wednesday, December 12, 2012
Gregory M. Gilchrist (Todelo) has a forthcoming article in Hastings Law Journal titled, "Condemnation Without Basis: An Expressive Failure of Corporate Prosecutions." The abstract describes it as:
This is the second of two articles on the expressive aspects of corporate criminal liability. The first article argued that to justify imposing criminal liability on corporations we must refer to the expressive function of criminal liability. This Article considers the expressive function of actual corporate prosecutions, and identifies aspects of corporate prosecutions that generate expressive costs rather than benefits. These are the expressive failures of corporate prosecutions. The article identifies a number of these failures and introduces a model of perceived legitimacy and the expressive function of punishment that explains how expressive failures harm the legal system. Mere respondeat superior liability – holding corporations criminally liable where there is no basis to condemn the corporate qua corporation – is the most significant expressive failure. It is also the easiest to fix: allow corporations a good faith defense against criminal liability. Good faith defenses have been proposed before, but this is the first proposal based on the expressive impact of the defense. A good faith defense will limit the application of corporate criminal liability to those instances where there is a basis to condemn the corporation as a whole, thus realigning the expression inherent in criminal punishment with commonly-held views about blaming corporations.
Friday, December 7, 2012
New Article - Unregulated Corporate Internal Investigations: Achieving Fairness for Corporate Constituents
Professor Bruce Green (Fordham) and I have a new article coming out in Boston Colleg Law Review, titled Unregulated Corporate Internal Investigations: Achieving Fairness for Corporate Constituents. You can download the article here. The SSRN abstract states:
This Article focuses on the relationship between corporations and their employee constituents in the context of corporate internal investigations, an unregulated multi-million dollar business. The classic approach provided in the 1981 Supreme Court opinion, Upjohn v. United States, is contrasted with the reality of modern-day internal investigations that may exploit individuals to achieve a corporate benefit with the government. Attorney-client privilege becomes an issue as corporate constituents perceive that corporate counsel is representing their interests, when in fact these internal investigators are obtaining information for the corporation to barter with the government. Legal precedent and ethics rules provide little relief to these corporate employees. This Article suggests that courts need to move beyond the Upjohn decision and recognize this new landscape. It advocates for corporate fair dealing and provides a multi-faceted approach to achieve this aim. Ultimately this Article considers how best to level the playing field between corporations and their employees in matters related to the corporate internal investigation.
New Article - Can the CEO Learn from the Condemned? The Application of Capital Mitigation Strategies to White Collar Cases
Todd Haugh has a forthcoming article in the American University Law Review titled, Can the CEO Learn from the Condemned? The Application of Capital Mitigation Strategies to White Collar Cases
. The Abstract states:
Ted Kaczynski and Bernie Madoff share much in common. Both are well-educated, extremely intelligent, charismatic figures. Both rose to the height of their chosen professions — mathematics and finance. And both will die in federal prison, Kaczynski for committing a twenty-year mail-bombing spree that killed three people and seriously injured dozens more, and Madoff for committing the largest Ponzi scheme in history, bilking thousands of people out of almost $65 billion. But that last similarity — Kaczynski’s and Madoff’s plight at sentencing — may not have had to be. While Kaczynski’s attorneys tirelessly investigated and argued every aspect of their client’s personal history, mental state, motivations, and sentencing options, Madoff’s attorneys offered almost nothing to mitigate his conduct, simply accepting his fate at sentencing. In the end, Kaczynski’s attorneys were able to convince the government, the court, and their client that a life sentence was appropriate despite that he committed one of the most heinous and well-publicized death penalty-eligible crimes in recent history. Madoff, on the other hand, with almost unlimited resources at his disposal, received effectively the same sentence — 150 years in prison — for a nonviolent economic offense. Why were these two ultimately given the same sentence? And what can Madoff, the financier with unimaginable wealth, learn from Kaczynski, the reclusive and remorseless killer, when it comes to federal sentencing?
The answer lies in how attorneys use sentencing mitigation strategies. This Article contends that federal white collar defendants have failed to effectively use mitigation strategies to lessen their sentences, resulting in unnecessarily long prison terms for nonviolent offenders committing financial crimes. The white collar defense bar has inexplicably ignored the mitigation techniques perfected by capital defense attorneys, and in the process has failed to effectively represent its clients. After discussing the development of the mitigation function in capital cases and paralleling it with the evolution of white collar sentencing jurisprudence, particularly post-Booker, this article will present seven key mitigation strategies currently used by capital defense teams and discuss how these strategies might be employed in federal white collar cases. The goal throughout this Article will be to highlight new strategies and techniques available in defending white collar clients and to enhance sentencing advocacy in federal criminal cases.
Sunday, November 4, 2012
T. Markus Funk, Perkins Coie Partner and former federal prosecutor, and Chicago Assistant U.S. Attorney Andrew S. Boutros examine the growing - but still largely under-recognized - international phenomenon of what Funk and Boutros term "carbon copy prosecutions." A country’s incentive to vindicate its own laws is not insubstantial, especially when a company or individual has already admitted, in a foreign proceeding, to having violated local law. With the increase in FCPA and money laundering cases, globalization presents many new concerns. Check out - Andrew S. Boutros & T. Markus Funk, "Carbon Copy" Prosecutions: A Growing Anticorruption Phenomenon in a Shrinking World
Maurice E. Stucke has a piece on SSRN titled, Is Competition Always Good? The abstract states:
Competition is the backbone of U.S. economic policy. The U.S. Supreme Court observed, "The heart of our national economic policy long has been faith in the value of competition." Competition advocacy is also thriving internationally. Promoting competition is broadly accepted as the best available tool for promoting consumer well-being. Competition officials, who regularly try to protect the public from anticompetitive special interest legislation, are justifiably jaded about complaints of excess competition. Although the economic crisis has prompted some policymakers to reconsider basic assumptions, the virtues of competition are not among them.
Nonetheless to effectively advocate competition, officials must understand when competition itself is the problem's cause, not its cure. Market competition, while harming some participants, often benefits society. But does competition always benefit society? This is antitrust’s blind spot. After outlining the virtues of competition, and discussing some well-accepted exceptions to competition law, this Article addresses four scenarios where competition yields a suboptimal result.
Saturday, July 21, 2012
By - Lucian Dervan & Markus Rubenstahl - available here
Abstract: Written for a European publication focusing on internal investigations, this piece seeks to introduce the reader to the fundamental elements of the American FCPA, including discussion of available defenses under the statute. Further, this piece discusses some of the collateral considerations that must be made during the investigation of an FCPA matter, particularly given the existence of overlapping anti-bribery provisions in various countries throughout the world and the likelihood of concurrent parallel proceedings both in the United States and abroad during the pendency of any international bribery matter. Finally, this piece offers some thoughts regarding FCPA compliance programs.
Friday, July 6, 2012
Check out Daniel D. Sokol's new article titled, Cartels, Corporate Compliance and What Practitioners Really Think About Enforcement available here and to be appearing in the Antitrust L.J.
The SSRN abstract states:
This article shows the limitations to the optimal deterrence-inspired cartel enforcement policy currently used by the Department of Justice Antitrust Division. This article employs both quantitative and qualitative survey evidence of cartel practitioners to shed light upon the realities of US cartel enforcement policy. The empirical evidence provided by the practitioner surveys challenges the traditional assumptions behind the success of the DOJ’s cartel program. Perhaps the most interesting finding is that firms regularly game the leniency program to punish their competitors. For various reasons, firms and the DOJ have strong incentives to settle rather than to litigate cases in which the legality of cartel conduct may be in doubt. The surveys also expose limitations to the optimal deterrence framework for firms and individuals regarding incentives and behavior. These findings suggest the need for an enforcement focus on sub-units within the firm as well as various processes to change behavior that would improve enforcement and deterrence. Finally, the surveys suggest certain structural limitations in organizational behavior within firms that have prevented antitrust compliance programs from becoming embedded in a way that would reduce cartel activity. Additionally, this article provides an analysis of media coverage of cartel enforcement from 1990-2009. The analysis suggests that successful enforcement has not created sufficient awareness of cartel behavior among the public. Relative to other types of financial crimes, such as accounting fraud, the public seems unaware or uninterested in cartel activity. The conclusion summarizes the article’s findings and outlines potential future steps in cartel research."
Sunday, April 22, 2012
Check out this new article by Mike Koehler here. His abstract states:
"Bringing criminal charges and marshalling the full resources of law enforcement agencies against an individual is an awesome power that our government possess. Because that power alters the lives of real people and their families, sidetracks real careers, empties real bank accounts in mounting a defense, and causes often irreversible damage to real reputations, it ought to be exercised with real discipline and prudence.
While it is unrealistic (and probably not desirable from a policy perspective) to expect the Justice Department to win 100 percent of its Foreign Corrupt Practices Act prosecutions against individuals when put to its burden of proof, given the above referenced dynamics, it is realistic (and desirable from a policy perspective) to expect the department to win a very high percentage of its FCPA prosecution against individuals. However, several recent DOJ FCPA prosecutions against individuals have fallen short of this desirable objective, often in spectacular ways. This raises the question - what percentage of DOJ FCPA losses is acceptable?
To borrow from Justice Potter Stewart's classic reasoning in Jacobellis v. Ohio, I don't know what level of DOJ FCPA losses is acceptable and the answer may be indefinable. But I know it when I see it, and the number and magnitude of DOJ's recent FCPA losses is unacceptable."
Saturday, January 28, 2012
Mike Koehler has a forthcoming article in the Wisconsin Law Review, titled, "Revisiting a Foreign Corrupt Practices Act Compliance Defense." The abstract states:
This article asserts that the current FCPA enforcement environment does not adequately recognize a company’s good faith commitment to FCPA compliance and does not provide good corporate citizens a sufficient return on their compliance investments. This article argues in favor of an FCPA compliance defense meaning that a company’s pre-existing compliance policies and procedures, and its good faith efforts to comply with the FCPA, should be relevant as a matter of law when a non-executive employee or agent acts contrary to those policies and procedures and in violation of the FCPA. This article further argues that a compliance defense is best incorporated into the FCPA as an element of a bribery offense, the absence of which the DOJ must establish to charge a substantive bribery offense.
Part I of this article contains a case study to demonstrate the type of conduct that would be covered by an FCPA compliance defense. Contrary to the claims of some, an FCPA compliance defense would not eliminate corporate criminal liability under the FCPA or reward "fig leaf" or "purely paper" compliance programs. A compliance defense would not apply to corrupt business organizations, activity engaged in or condoned by executive officers, or activity by any employee if it occurred in the absence of pre-existing compliance policies and procedures.
Part II of this article places an FCPA compliance defense in the context of the broader issue of corporate criminal liability and acknowledges the work of other scholars and commentators who have called for a general compliance defense to corporate criminal liability. This section channels that work into the specific context of the FCPA and argues that the unique aspects and challenges of complying with the FCPA in the global marketplace warrant a specific FCPA compliance defense.
Part III of this article highlights that an FCPA compliance defense is not a new idea or a novel idea. This section contains an overview of the FCPA legislative history of a compliance defense, most notably the compliance defense passed by the House of Representatives in the 1980’s. The justification and rationale for a compliance defense then pales in comparison to now as most U.S. companies engage in international business during an era of aggressive FCPA enforcement. This section also demonstrates that several countries, like the U.S. that are signatories to the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the "OECD Convention"), have a compliance-like defense in their domestic laws.
Against this backdrop, Part IV of this article details the DOJ’s institutional opposition to an FCPA compliance defense, yet argues that the DOJ already recognizes a de facto FCPA compliance defense albeit in opaque, inconsistent and unpredictable ways. Thus, an FCPA compliance defense accomplishes, among other things, the policy goal of removing factors relevant to corporate criminal liability from the opaque, inconsistent, and unpredictable world of DOJ decision making towards a more transparent, consistent, and predictable model best accomplished through a compliance defense amendment to the FCPA. This section concludes by highlighting the growing chorus of former DOJ officials who support an FCPA compliance defense and argues that the DOJ’s current opposition to a compliance defense seems grounded less in principle than an attempt to protect its lucrative FCPA enforcement program.
Part V of this article concludes by highlighting certain policy objectives advanced by an FCPA compliance defense. This section argues that an FCPA compliance defense will better incentivize more robust corporate compliance, reduce improper conduct, and thus best advance the FCPA’s objective of reducing bribery. An FCPA compliance defense will also increase public confidence in FCPA enforcement actions and allow the DOJ to better allocate its limited prosecutorial resources to cases involving corrupt business organizations and the individuals who actually engaged in the improper conduct.
Sunday, January 22, 2012
Attorney Jack Fernandez (Zuckerman Spaeder LLP) has an interesting Essay for the the ABA's White Collar Book entitled, An Essay Concerning the Indictment of Lawyers for Their Legal Advice. It is here - Download 3533275_1 DOCX (3) (3)
Friday, January 20, 2012
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."
Sunday, January 15, 2012
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.
Saturday, January 14, 2012
New Article - Big Law's Sixth Amendment: The Rise of Corporate White-Collar Practices in Large U.S. Law Firms
Check out Charles D. Weisselberg and Su Li's article available on SSRN here.
Over the last three decades, corporate white-collar criminal defense and investigations practices have become established within the nation’s largest law firms. It did not used to be this way. White-collar work was not considered a legal specialty. And, historically, lawyers in the leading civil firms avoided criminal matters. But several developments occurred at once: firms grew dramatically, the norms within the firms changed, and new federal crimes and prosecution policies created enormous business opportunities for the large firms. Using a unique data set, this Article profiles the Big Law partners now in the white-collar practice area, most of whom are male former federal prosecutors. With additional data and a case study, the Article explores the movement of partners from government and from other firms, the profitability of corporate white-collar work, and the prosecution policies that facilitate and are in turn affected by the growth of this lucrative practice within Big Law. These developments have important implications for the prosecution function, the wider criminal defense bar, the law firms, and women in public and private white-collar practices.
Monday, December 19, 2011
Saturday, December 17, 2011
In August 2011, the United States brought a landmark antitrust lawsuit to prevent the merger of two of the nation’s four largest mobile wireless telecommunications services providers, AT&T Inc. and T-Mobile USA, Inc. But why are so many elected officials asking the Obama administration to intercede in the Department of Justice’s lawsuit to force a settlement? Why are they approving a merger that would likely lead to higher prices, fewer jobs, less innovation, and higher taxes for their constituents? Does it have anything to do with the money they are receiving from AT&T and T-Mobile?
This Essay examines the recent lobbying efforts in the AT&T/T-Mobile merger. AT&T spent $11.69 million on political lobbying in the first six months of 2011. In addition to hefty campaign contributions, it lobbied lawmakers with $52 steaks and $15 gin-and-cucumber puree cocktails.
But lobbyists, as this Essay outlines, are not the problem. The problem is the combination of lax campaign finance rules and antitrust’s prevailing legal standard, a flexible fact-specific rule of reason.
Sunday, December 11, 2011
Intersesting new article (available on Lexis and Westlaw) by Dr. Thomas White, JD, PHD. titled, "Limitations Imposed on the Dual Sovereignty Doctrine by Federal and State Governments." He states:
"To ameliorate some of the unfairness inherent in multiple prosecutions by different sovereigns, the federal government and many states have established limitations, or even prohibitions, on subsequent prosecutions after an initial prosecution in which double jeopardy has attached. Part I of this inquiry discusses the dual sovereignty doctrine, focusing on its relationship to the Fifth Amendment prohibition of multiple prosecutions and punishments. Part II addresses the greater potential for multiple prosecutions occasioned by the increasing "federalization" of criminal law. Next, Parts III and IV, respectively, examine how the federal and state governments have addressed (or failed to address) the prospect of multiple prosecutions under the dual sovereignty doctrine. Part V concludes with suggestions aimed at resolving the issues of double jeopardy and dual sovereignty."
Saturday, December 10, 2011
Over the past several years, the marketing practices of large pharmaceutical companies have come under intense scrutiny. The government spends years investigating and building cases against pharmaceutical manufacturers that engage in illegal promotional activities to promote their drugs but does not prosecute them. Instead, the government enters into Corporate Integrity Agreements (CIAs) with the pharmaceutical giants. As a result, the pharmaceutical manufacturers are able to avoid the collateral consequences of conviction, such as exclusion from Medicare and Medicaid. Participation in Medicare and Medicaid is crucial for a pharmaceutical manufacturer because the government spends over $60 Billion per year through those programs on reimbursements for prescription drugs. In return for remaining eligible for Medicare and Medicaid reimbursements for their drugs, the manufacturer pays the government a huge fine and agrees to structural changes to the company designed to prevent future marketing violations.
The CIA seems like a reasonable response to the marketing violations until the pharmaceutical company engages in illegal marketing practices while still under the CIA for the previous marketing violation. In those situations, the government remains unwilling to pursue the pharmaceutical manufacturers in court and seek exclusion from Medicare and Medicaid. Rather than pursue exclusion, the government has entered into successive CIAs with pharmaceutical manufacturers and collected additional fines. The government enters into these agreements because exclusion of the manufacturer from participating in Medicare and Medicaid has devastating consequences that spill over to innocent patients, employees, and stockholders. Not only does the impact of the exclusion hit innocent third parties, but its imposition on the manufacturer substantially outweighs the harm the manufacturer inflicts through its improper marketing practices. The penalty for improperly marketing one drug is exclusion of all drugs produced by that manufacturer from Medicare and Medicaid. It is the government’s unwillingness to harm innocent third parties and its reluctance to impose a disproportionate penalty on drug manufacturers that leads them to CIAs. Thus, the problem is not that the government uses CIAs to combat health care fraud; it is that the government lacks penalties of increasing severity to impose when a manufacturer violates an existing CIA.
This Article argues that neither the exclusion of manufacturers from Medicare and Medicaid nor the use of Corporate Integrity Agreements coupled with large fines is an effective deterrent for pharmaceutical manufacturers that repeatedly engage in illegal marketing activities to promote their drugs. In particular, it argues that CIAs fail to deter drug manufacturers from engaging in illegal promotional practices because the penalty imposed and the cost of compliance with the CIA are significantly lower than the profits that a pharmaceutical company can obtain by illegally marketing its drugs. Further, the government’s willingness to enter into multiple CIAs with repeat offenders of the marketing rules rather than exclude them from Medicare and Medicaid substantially diminishes the ability of CIAs to deter illegal promotional activities. Finally, this Article argues that there are viable alternatives to be used in place of or in conjunction with CIAs, such as funding clinical trials, compulsory licensing, corporate officer liability, and targeted exclusion, that would be more effective deterrents for repeat offenders. Each of these remedies could be used to increase the severity of punishment when a one-time offender becomes a repeat offender. This Article concludes that these proposed measures would be more successful than CIAs at increasing compliance and enforcing integrity in drug promotion.
Sunday, December 4, 2011
Saturday, October 8, 2011
New Scholarship -New Crimes and Punishments: A Case Study Regarding the Impact of Over-Criminalization on White Collar Criminal Cases
Lucian Dervan, Southern Illinois, has a new article titled, "New Crimes and Punishments: A Case Study Regarding the Impact of Over-Criminalization on White Collar Criminal Cases." The abstract states in part:
"While much has been written about the plethora of negative consequences resulting from over-criminalization generally, it is worth noting that not everyone believes these negative consequences outweigh the potential benefits that might flow from the two types of over-criminalization discussed in this article. First, some might argue that repeatedly increasing the statutory maximums for white collar offenses is justified because doing so means culpable individuals will receive longer prison sentences reflective of their conduct and, in addition, others will be deterred from committing such crimes. Second, some might argue that enacting broad new criminal provisions in areas already criminalized is justified because such enactments provide prosecutors with the tools necessary to ensure that creative and sophisticated white collar criminals are brought to justice in larger numbers, thereby deterring others from committing similar offenses. This article will examine the accuracy of the underlying premises utilized by both of these “justifications” for the over-criminalization discussed herein – (a) the assumption that increasing statutory maximums results in ever lengthening sentences for individual white collar defendants, and (b) the assumption that enacting additional laws that are vague and overlapping in areas already criminalized results in increased levels of enforcement against white collar criminals. Through such an examination, this article seeks to understand whether new crimes and punishments really achieve their intended goals and, if not, what this means for the over-criminalization debate and, in particular, the over-criminalization “justifications” discussed above."
Monday, September 19, 2011
New Scholarship - Overcriminalization 2.0: The Symbiotic Relationship Between Plea Bargaining and Overcriminalization
Lucian Dervan (Southern Illinois) has a new article titled, "Overcriminalization 2.0: The Symbiotic Relationship Between Plea Bargaining and Overcriminalization" that appears in George Mason's Journal of Law, Economics and Policy. The abstract states:
"In discussing imperfections in the adversarial system, Professor Ribstein notes in his article entitled Agents Prosecuting Agents, that "prosecutors can avoid the need to test their theories at trial by using significant leverage to virtually force even innocent, or at least questionably guilty, defendants to plead guilty." If this is true, then there is an enormous problem with plea bargaining, particularly given that over 95% of defendants in the federal criminal justice system succumb to the power of bargained justice. As such, this piece provides a detailed analysis of modern-day plea bargaining and its role in spurring the rise of overcriminalization. In fact, this article argues that a symbiotic relationship exists between plea bargaining and overcriminalization because these legal phenomena do not merely occupy the same space in our justice system, but also rely on each other for their very existence."