Lessons Learned from the Africa Sting Case
The FCPA paparazzi is at it again. FCPA bloggers and white collar defense counsel are hyper-ventilating on the future of DOJ’s criminal FCPA prosecutions. Exagerration is now the commodity of marketing on the blogosphere.
The government’s dismissal of the Africa Sting cases is a setback to the government’s FCPA enforcement program but it is not an event which will in any way slow the government’s criminal enforcement efforts. The dismissal reflects some unfortunate events outside the government’s control and exemplary work by my talented colleagues in the defense bar.
In full disclosure, I represented one of the defendants in the case but withdrew several months ago. I know the prosecutors involved in the case, and worked with some of them in the US Attorney’s Office in the District of Columbia. They are terrific lawyers, dedicated public servants of first rate, and my analysis has nothing to do with their performance.
While the Africa Sting case was not the first proactive undercover operation involving the FCPA, it certainly was the most significant in terms of scale. The prosecution suffered from a series of setbacks, some of which reflected a couple of strategic decisions which did not work out well and some were just the luck of the draw.
Any federal prosecutor who worked in the District of Columbia knows one thing – undercover “stings” are extremely difficult and unpopular in front of DC juries. I had my own experience with such a case when I had to try a client three times before he was ultimately convicted. The first two trials deadlocked even though the defendant was videotaped handing the drugs over to the informant — as clear as could be on the videotape.
Given this significant obstacle, many federal prosecutors in the District of Columbia, Maryland and Virgina region know that, if given a choice, it is better to bring such a case in the Eastern District of Virginia. It would have been easy to establish venue in Virginia. In my view, the prosecution team would have had much more success in the Eastern District of Virginia or even in Maryland, where there is far less skepticism in undercover sting cases.
The Africa Sting case raised some difficult issues and relied on some questionable tactics.
First, why was it necessary to conduct an undercover operation at all? Traditionally, undercover operations are used when a historical case, based on testimony and documents, may be insufficient to warrant prosecution. An undercover operation should be used when such a tactic is needed to build cases against individuals who are known to be engaged in illegal conduct but against whom there is insufficient evidence.
The Africa Sting case was not conducted in accordance with this basic principle. The informant, Richard Bistrong, was allowed to troll in the industry and “inform” the FBI if he discovered any potential illegal conduct. That gave far too much control to the informant and cut out the investigators and the prosecutors from the overall decision on who to target and to ensure that there was a proper basis — meaning there was sufficient evidence of predisposition to commit the crime (rather then mere bluster about prior bribery).
As a result, the government cast far too wide a net – selecting certain defendants without carefully ensuring that they had the requisite “predisposition” to commit the particular crime. A sting should be designed to permit the defendant to commit a crime he or she would otherwise commit; not to create the crime by enticing the defendant to commit something he or she would not otherwise commit. This was underscored by the recorded telephone calls in which several of the defendants asked the informant, Richard Bistrong, if the transaction violated the FCPA. In addition, the language used in the operation itself was unnecessarily vague — The informant and the defendants used the word “commission” to equate to “bribe.” That was a mistake and defense counsel plenty of room to challenge the government on intent.
The Africa Sting case also suffered some significant setbacks at the hands of the judge assigned to the case. The case was delayed for many months and the defense counsel were better able to fashion a common strategy and devote more time and energy to uncovering facts which would help them fight the case.
But the most significant problem was the judge’s pretrial ruling which prevented the government from offering evidence on the video and audiotapes showing that the defendants had bribed foreign officials on other occasions. This evidence would have been devastating to the defense because it would have shown that some of the defendants were “predisposed” to commit the crime and were not “manipulated” by the government informant. The judge’s ruling was a body blow to the government’s case and tied the government’s hand. It also was incorrect on the law and the facts. In my view, the government was entitled to put on that evidence since intent was the core issue of the trial.
If such evidence had been allowed, the defendants would have been forced to argue that such statements were just “bluster” by defendants seeking to make a deal.
The prosecutors in the Africa Sting case, some of whom I have known for many years, are some of the best the Justice Department has. It would be a mistake for anyone to suggest that the results will lead to any change in the Justice Department’s efforts.