On Thursday, Dec. 22, 2011, Judge Richard Leon in the U.S. District Court in the District of Columbia dismissed conspiracy charges against six defendants in the high-profile “Gabon sting” Foreign Corrupt Practices Act case.
After 12 weeks of trial in which the government put on its case, the judge found that there was insufficient evidence that these six defendants had conspired to violate the FCPA. In addition, Judge Leon exonerated one of the defendants entirely, since he was charged only with participating in the conspiracy and not with a direct FCPA violation. The other five defendants will now put on their defense when the trial resumes on Jan. 3, 2012.
The Justice Department has touted this case as the first FCPA “sting” operation and as a major example of its seriousness in enforcing the FCPA and getting tough on foreign bribery. In all, 22 defendants were charged with conspiring to violate the FCPA, violating the FCPA, and conspiring to launder money.
All these charges stemmed from an agreement to pay a $1.5 million bribe to the Minister of Defense of Gabon in order to win a $15 million contract to outfit the country’s national guard. However, that West African nation didn’t actually participate in the run-up to the alleged crimes. The purported minister of defense was actually an undercover FBI agent.
This was the second group of defendants tried in the Gabon case. The first group went to trial last summer before Judge Leon, but after the jury failed to reach a unanimous verdict, the judge declared a mistrial. Three defendants pleaded guilty earlier.
On Dec. 22, Judge Leon said that there wasn’t enough of a common goal among the defendants to justify a conspiracy charge.
“In the final analysis, the evidence does not adequately demonstrate that these defendants who were aggressively pursuing their own individual programs had a necessary stake and interest in the success of their competitors’ individual programs,” Leon said.
While the government has suffered a setback here at the hands of a judge, no one in a company’s legal or compliance department should think for a minute that the Justice Department is any less interested in enforcing the FCPA. Judges are always going to require prosecutors to put on sufficient evidence to prove their case, but the Justice Department, we can be assured, is still looking for opportunities to bring FCPA cases and even to extend the reach of that law.
For example, in a speech on Nov. 8, 2011, Assistant Attorney General Lanny Breuer said, “The Justice Department has been vigorously enforcing the Foreign Corrupt Practices Act and achieving strong results. As we speak, in federal court in Washington, D.C., we are in the middle of our fourth FCPA trial of the year – more than in any prior year in the history of the Act. And just two weeks ago, we secured the longest prison sentence – 15 years – ever imposed in an FCPA case.”
The fact that this trial in federal court in D.C., to which Breuer was referring, has so far gone poorly for the department is not going to cool its interest in the FCPA.