Last week, a federal judge declared a mistrial in a case involving four arms salesmen caught in a foreign bribery sting operation. After a six-week trial, jurors were unable to reach a unanimous verdict.
POGO blogged about this case 18 months ago, when 22 employees and executives of defense and law enforcement supply companies were arrested and charged with violating the Foreign Corrupt Practices Act (FCPA). The Department of Justice called it “the largest single investigation and prosecution against individuals in the history of DOJ’s enforcement” of the FCPA. The government says it will retry all four defendants—Pankesh Patel, John Benson Wier III, Andrew Bigelow, and Lee Tolleson. Three other people nabbed in the sting have pleaded guilty. The rest of the defendants are scheduled for later trials.
POGO’s original motivation for blogging about this case was to determine whether any companies in our Federal Contractor Misconduct Database were implicated. None of the defendants were working for FCMD companies, although it turns out that one of the “plants” in the sting and one of the defendants had formerly worked together at Armor Holdings, which was acquired by BAE Systems in 2007.
Although FCPA enforcement has increased in recent years (there are now 23 FCPA instances in our FCMD), there are concerns that the government is fighting with one hand tied behind its back. A few months ago, we blogged about South Texas College of Law professor Drury Stevenson and student Nicholas Wagoner, who wrote an article about the government’s reluctance to impose companywide suspensions and debarments in FCPA cases. The problem, as they discussed in this podcast, isn’t merely that the government is not sufficiently punishing foreign corruption, but that it has grown too dependent on contractors. Meanwhile, big business has declared war on the FCPA, engaging in a misinformation campaign in hopes of weakening the law.
Neil Gordon is a POGO Investigator.