Tuesday, February 1, 2011

Picking and Choosing?

The sentencing memos in the Ousama Naaman matter are interesting reads. Naaman's memo (here), submitted by Abbe Lowell of McDermott Will & Emery (here), provides a glimpse into cooperation by an individual FCPA defendant.

The DOJ's memo (here), while requesting a downward departure, details how Naaman's cooperation was not great at all and how Naaman is seemingly contesting various facts and issues he agreed to in pleading guilty.

The DOJ seeks a recommended sentence of 90 months (7.5 years) which would result in 79 months of additional incarceration given that Naaman has already 11 months of time served.

As previously reported (here), Naaman's sentencing has been delayed until April 18th.

One aspect of the DOJ's sentencing memo I found interesting is where the DOJ warns the judge that a "minimal sentence could not only possible be construed as a violation of U.S. treaty obligations [...] but could do much to undermine the efforts by the United States Departments of Commerce and State to educate U.S. businesses about the harm caused by and risk of engaging in transnational bribery." (See pgs. 34-36).

The treaty reference is to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (see here) and the DOJ specifically cites Art. 3 Sec. 1 - "The bribery of a foreign public official shall be punishable by effective, proportionate and dissuasive criminal penalties. The range of penalties shall be comparable to that applicable to the bribery of the Party's own public officials."

Is the DOJ picking and choosing which articles of the OECD Convention it wants to abide by?

Article 5 of the same OECD Convention, under the heading "Enforcement," states that investigation and prosecution of bribery offenses "shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved."

Are we to believe that the Giffen prosecution (see here for prior posts) was not influenced by considerations on the "potential effect upon relations with another state."?

Are we to believe that the BAE prosecution and the lack of FCPA charges (see here for the prior post) was not influenced by "considerations of national economic interest" or the "identity of the natural or legal persons involved."

It would seem that every time the DOJ specifically states in a sentencing memo (i.e. Siemens, BAE, Daimler, etc.) that, in deciding how to resolve a case, it considered the collateral consequences - including the risk of debarment and exclusion from government contracts - that prosecution of the offense is being "influenced by considerations of national economic interest" or the "identity of the natural or legal persons involved."

In an effort to avoid yet another rejection of its FCPA sentencing recommendation, the DOJ is now warning a judge that a "minimal sentence" could be "construed as a violation of U.S. treaty obligations."

In doing so, is the DOJ picking and choosing which articles of the OECD Convention it will abide by?

1 comment:

  1. Mike,

    What a nice way to put it: "Is the DoJ picking and choosing....?"

    The DoJ's outrageous stretching of applicable law re overseas bribery is an abomination.

    As you have pointed out many times there is little settled law in this area. The DoJ prosecutors get to do as they please in many cases while looking to their future employment on the defense side. [Think "moral hazard."] There is no incentive for the DoJ to actually exercise even-handed prosecutorial discretion."

    We can assume that the sentencing judge will not be impressed by the absurd argument that a light sentence in an FCPA proceeding will violate the OECD Bribery Convention. After all U.S. senior government officials, including Congressmen, are regularly not punished at all for their violations of law. [Sandy Berger's treatment of classified documents, Charles Rangel's tax oversights, other cabinet members in prior and current administrations who have tax problems uncovered in the confirmation process.]

    I think being so polite in your blog is fine. But let's not forget what is going on- the cowboys, not the courts, are writing the rules under the FCPA.

    Prof. Bruce W. Bean
    MSU Law School