U.S. prosecutor says tough tactics to remain in bribery fight

Reuters News
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Posted: Mar 01, 2012 7:23 PM
U.S. prosecutor says tough tactics to remain in bribery fight

By Kevin Gray

MIAMI (Reuters) - A U.S. Justice Department official steering the department's anti-bribery efforts signaled on Thursday the agency would continue to use aggressive tactics to pursue prosecutions despite recent setbacks in some high-profile cases.

Charles Duross, the deputy chief of the DOJ's Fraud Section, said "there are lessons to be learned" after prosecutors failed to win convictions in several cases involving violations of the Foreign Corrupt Practices Act (FCPA), which bars U.S.-linked firms from bribing foreign officials.

"I know there is a lot of commentary out there about what this portends for the FCPA program, the use of certain law enforcement techniques," he said speaking at a white collar crime conference in Miami.

"I would caution everybody not to draw too much from that," Duross added. "In terms of pursuing cases moving forward, I don't think a lot is going to change."

Federal prosecutors have stepped up the pursuit of foreign bribery cases in recent years, occasionally using undercover agents and sting operations in an effort to gather evidence.

Most of the cases have resulted in settlements or plea agreements with large penalties instead of trials. In 2010, 23 companies paid out $1.8 billion in fines and settlements, according to an industry blog, the FCPA blog.

But in an embarrassing defeat last month, prosecutors moved to dismiss charges against more than a dozen defendants in a major bribery case involving military equipment sales to FBI agents posing as government officials from an African country.

Prosecutors failed to convince two juries what the executives did was illegal and the judge in the case criticized the government's handling of the investigation.

In January, another federal judge dismissed without sending to a jury the case against a Texas man accused of authorizing bribes to government officials in Mexico, on behalf of his former employer, a unit of ABB Group.

"It's been an interesting few months to say the least," Duross said. "We have had some disappointing results and I'd be kidding you if I didn't think those were significant."

After the setbacks, some analysts and lawyers questioned whether the government would stop using undercover stings, a suggestion Duross dismissed.

"It's not the first time and it won't be the last," he said about the sting operations and other methods. "Those are tried and true law enforcement techniques."

Law enforcement officials are currently pursuing several high-profile investigations, including a probe into whether Avon Products used bribes to win the first-ever license given by China to a Western company to sell products door-to-door.

The anti-bribery law was signed into law in the 1970s in the wake of the Watergate scandal and separate revelations that U.S. corporations were making illegal payments to foreign government officials.

The law languished for years but found renewed interest as federal prosecutors stepped up enforcement since the mid-2000s.

That enforcement has since come under heavy criticism from the U.S. Chamber of Commerce, a powerful business lobby, and some lawmakers on Capitol Hill who say the law is too vague and does not adequately spell out what constitutes a bribe.

In a letter sent to the government last week, U.S. companies called for more specifics, including details on what instances covering flight costs on a business trip or making donations to charities connected to foreign governments could be considered a bribe.

The Justice Department has said it would not support any legislation to change the law, but Lanny Breuer, who heads the department's criminal division, promised in a November speech the agency would soon offer "detailed new guidance" on the criminal and civil enforcement provisions of the law.

Asked when the guidance will be unveiled, Duross said officials were still working on it. "It's going to be sooner rather than later," he said.

(Additional reporting by Aruna Viswanatha in Washington; Editing by Bernard Orr)