A Washington federal judge this afternoon dismissed a high-profile foreign bribery prosecution as he questioned the government’s litigation tactics and legal theories underpinning the case.
The conspiracy prosecution lodged against 22 individuals in Washington’s federal trial court marked the largest-ever Foreign Corrupt Practices Act case against individuals.
Two earlier trials ended in deadlocked panels; three businessmen were acquitted in January, two years after their arrest at a military and law enforcement equipment show in Las Vegas. DOJ heralded the prosecution as part of a new era of FCPA enforcement.
“This appears to be the end of a long and sad day in the annals of white-collar enforcement,” U.S. District Judge Richard Leon said in court this afternoon, several hours after prosecutors asked him to dismiss the case with prejudice. “Unlike take-down day in Las Vegas, there will be no front page story in The New York Times.”
Leon said he is hopeful the Justice Department takes the opportunity to learn from the botched prosecution. “I, for one, hope this very long and I’m sure very expensive ordeal will be a true learning experience for both the department and the FBI as they regroup to investigate and prosecute FCPA cases,” Leon said.
Leon said he was concerned at the start about what he described today as the government’s “very aggressive conspiracy theory.” His ruling in the case limited the ability of prosecutors to tell jurors about earlier business deals involving the defendants and any earlier alleged crime.
At the last trial, Leon dismissed the conspiracy count, leaving only substantive violations of the foreign bribery laws. Defense lawyers in the case argued that participants in the underlying business deal did not all know each other.
Leon today applauded the department for “the wisdom, the courage, the conviction to face up to the limitations of this case.” The judge said he is confident the failed case will have a “positive, if painful” result leading to better prosecutions.
He called the defense lawyers in the case “tireless and spirited.”
“Their hard work and effective advocacy is a testament to how strong our criminal defense bar is nationwide,” Leon said.
The DOJ trial team, including Laura Perkins and Joey Lipton of the Fraud Section, and Assistant U.S. Attorney Matthew Solomon, declined to comment about the decision to walk away from the case. Lipton addressed Leon in court today.
Assistant Attorney General Lanny Breuer of the Criminal Division and U.S. Attorney Ronald Machen Jr. reviewed the history of the case, including the past two trials, before reaching a decision to end the litigation.
The abrupt end of the case comes as the Justice Department prepares to release new guidance on the Foreign Corrupt Practices Act.
The U.S. Chamber of Commerce today sent a letter (PDF) to the U.S. Securities and Exchange Commission and to DOJ regarding the government’s ongoing review of FCPA enforcement.
Numerous groups, including the National Association of Criminal Defense lawyers and the National Association of Manufacturers, signed the letter. The business and trade groups are urging DOJ to address successor liability and the definition of “foreign official.”
Photo by staff photographer Diego M. Radzinschi