Friday, October 30, 2020

Former Alstom Executive Asks Judge to Throw Out Foreign Bribery Charges


A federal court is facing a raft of thorny legal questions—including what it should tell jurors about the definition of a key word in the U.S. Foreign Corrupt Practices Act—on the eve of the trial of a former Alstom SA executive.

Lawyers for Lawrence Hoskins, a former Alstom senior vice president, this week asked a judge to dismiss charges against their client over delays that they say have violated his constitutional right to a speedy trial. Mr. Hoskins, who was arrested in 2014, is charged with helping organize a scheme to bribe Indonesian government officials to win a $118 million power contract for Alstom.

The latest round of pretrial motions in the case—one of the longest-running FCPA cases currently being litigated—demonstrates the obstacles prosecutors face in bringing charges of bribery that occurred outside the U.S., as well as the obstacles faced by executives in defending themselves against those charges.

RelatedThree Alstom executives guilty of conspiracy to corrupt

Mr. Hoskins, a British national who worked for Alstom in a Paris suburb for less than three years, has made his tenuous links to the U.S. central to his defense. He says he never set foot in the U.S. while at Alstom, which has its headquarters in France.

- Advertisement -

“Mr. Hoskins is living proof of the significant challenges faced by foreign nationals defending charges in the United States that are premised on old, extraterritorial conduct,” Chris Morvillo, a lawyer representing Mr. Hoskins, said at a pretrial hearing Wednesday.

The case is being heard in the U.S. District Court in Connecticut, where an Alstom subsidiary was based. Alstom agreed to pay $772 million in 2014 to resolve the Justice Department probe. Mr. Hoskins’s trial is scheduled to begin Sept. 3.


Faced with criminal charges, most companies choose to settle with prosecutors. But the case against former Alstom SA executive Lawrence Hoskins has demonstrated how, for many companies, a settlement might not be the end of the matter.

Alstom’s $772 million Foreign Corrupt Practices Act settlement required the French company to cooperate with prosecutors in any related investigations. General Electric Co. inherited the terms of that agreement after it bought Alstom’s power business in 2015.

In a recent twist to the Hoskins case, GE in April told prosecutors that it had a trove of 50,000 documents and emails from Mr. Hoskins’s time at Alstom. Prosecutors also told Mr. Hoskins that GE would allow him to review another 8,300 documents in France that couldn’t be removed from the country without a court order.

Lawyers for Mr. Hoskins have accused the Justice Department of withholding further evidence needed for his defense, and they disagree with prosecutors over whether GE is still required to search for more documents, since the three-year Alstom settlement has expired.

A representative for GE’s power business didn’t immediately respond to a request for comment.

The case has garnered interest from companies and lawyers because it has brought the Justice Department’s interpretation of U.S. foreign bribery law under judicial scrutiny. It also has given rise to a landmark legal ruling that set limits on who prosecutors can charge with conspiring to violate the law, as opposed to violating it directly.

As a result of that ruling, the case against Mr. Hoskins rests on the Justice Department’s ability to prove at trial that he was an agent of Alstom’s U.S. subsidiary.

- Advertisement -

The U.S. foreign bribery law doesn’t define what an agent is. Like many other aspects of the bribery law, the definition has been largely unaddressed by courts.

Prosecutors and lawyers for Mr. Hoskins have agreed to use a common legal definition of agent, which requires an agreement whereby the agent acts under the control of a principal. But they continue to disagree on exactly what jurors should be told about the nature of the control that is required for someone to be an agent.

Mr. Hoskins’s defense team is expected to argue at trial that since the executive worked for Alstom’s parent company, the Connecticut subsidiary that secured the contract in Indonesia was his agent—not the other way around.

The four-hour hearing on Wednesday also focused on constitutional questions over the amount of time that has passed since Mr. Hoskins was arrested, and the impact the delays might have on his ability to defend himself at trial.

Mr. Hoskins took part in the Indonesian bribery scheme between 2002 and 2004, according to prosecutors. The amount of time that has passed since the alleged misconduct has made it difficult for the former executive to recall the events, Mr. Hoskins’s lawyers wrote in a surprise brief last month.

The delays have also affected the case’s witnesses, Mr. Morvillo said. One witness, a former vice president at Alstom’s Connecticut-based subsidiary, died after pleading guilty in 2014. Another returned to France after two years in prison in the U.S. and is unlikely to return to testify at Mr. Hoskins’s trial, according to prosecutors.

Prosecutors said the absence of the two witnesses worked in Mr. Hoskins’s favor, since both had cut deals with the government and given testimony implicating him in the bribery scheme. “It’s hard to see how this hurts anyone other than the government,” Daniel Kahn, an official with the department’s criminal fraud section, argued.

The case also has stalled because of the difficulty faced by Mr. Hoskins in gathering evidence he says is critical for his defense.

The Justice Department says it has turned over more than one million pages of documents related to the Alstom project in Indonesia. But Mr. Hoskins has continued to ask prosecutors to use a term in their settlement agreement with Alstom to search for more.

Mr. Kahn said Wednesday that Mr. Hoskins’s requests for more documents undercut the claim that his constitutional rights had been violated.

“He has benefited from this delay,” Mr. Kahn said.


Ukraine’s court strips critical power from anti-corruption agency

Ukraine's Constitutional Court has stripped the country’s anti-corruption agency of some of its critical powers. The high court’s ruling published on October 28 declared it...

Former South Korean President Lee Myung-bak sent back to prison for 17 years in corruption case

Former South Korean president Lee Myung-bak was ordered back to prison on Thursday (Oct 29) as the country's Supreme Court upheld a 17-year jail...

Nigerian court declines to issue international arrest warrant for fugitive ex-Petroleum Minister in corruption case

The Abuja Division of the Federal High Court, on Wednesday, refused an application by the Economic and Financial Crimes Commission, EFCC, for an arrest...

South Korea’s former Vice Justice Minister sentenced to jail for bribery and sexual favors

Former Vice Justice Minister Kim Hak-eui, the figure at the center of one of Korea’s biggest political sex scandals, was placed under pretrial detention...

Beam Suntory Inc. fined $19.6 million in foreign bribery case

Beam Suntory Inc. (Beam), a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World


Latest News

This Week

Former Jacksonville City Council members set for sentencing in fraud case

Former Jacksonville City Council members Katrina Brown and Reggie Brown are scheduled to be in federal court Tuesday to begin a hearing on their...

Texas AG Ken Paxton fires second whistleblower who accused him of bribery

A second whistleblower has been fired from the Texas attorney general’s office after reporting his boss, Texas Attorney General Ken Paxton, to law enforcement for...

Former Columbus mayor Eisenga charged with bank fraud

A former Columbus mayor and businessman who was once at the center of a controversial bill aimed at reducing child support payments for wealthy...

Greek ex-minister Tsochadzopoulos, wife sentenced for money laundering

Former minister Akis Tsochadzopoulos, his wife and his cousin were found guilty of money laundering by a criminal appeals court on Tuesday. Each was served...

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks