By Carlyn Kolker

Everything you need to know about the FCPA in 2011

1/6/12

Well, Summary Judgments might be a bit late with its take on Shearman & Sterling's FCPA Digest, but you'll have to forgive us: it is 692 pages long. That's a lot of reading. (And we almost wonder why they didn't write eight more pages to make it a cool 700). To say the report is a comprehensive look into government enforcement of the Foreign Corrupt Practices Act, the U.S.'s primary tool to prosecute foreign bribery, is well, an understatement.

Summary Judgments has done its best to cull a few important trends and factoids from the report.

-There were 16 new enforcement actions against corporations in 2011, a drop from previous years. In 2010, there were a total of 20 corporate cases.

-The average FCPA penalty was less than $25 million. That's consistent with previous years, according to the report.

-Of the 18 individuals charged for FCPA violations this year, 12 were not U.S. citizens. That means that down the road, the U.S. will likely be making extradition requests to the countries where those people reside, such as Germany, Argentina, Switzerland, Israel and Hungary. The U.S.'s history in prevailing in extradition requests is "mixed," according to the report, by Shearman partners Philip Urofsky and Danforth Newcomb.

-The government brought its biggest forfeiture action in an FCPA case, ordering $148 million seized from the bank accounts of Jeffrey Tesler, a British man accused of participating in a scheme to bribe Nigerian officials for a joint venture run by engineering firm KBR Inc.

-The government brought its first FCPA case against a major drug company - Johnson & Johnson, for allegedly bribing doctors at state-run hospitals. J&J settled.

-According to Shearman & Sterling's analysis, companies receive between 3 percent and 67 percent reductions in settlement amounts for cooperating with the government. Johnson & Johnson, for example, got a 25 percent discount; it paid $70 million in the end to both the Justice Department and SEC.

-U.S. District Judge Jed Rakoff's rejection of the civil settlement between the Securities and Exchange Commission and Citigroup, while wholly unrelated to the FCPA, could have an effect in that arena, too, since the SEC negotiations similarly-structured settlements with defendants in FCPA cases.

-The report contains a summary of every enforcement action the U.S. brought, with details on the jurisdictions involved, the amount of bribes allegedly paid, and the settlement value.

Legal sector takes a hit

1/6/11

File under bad economic news for lawyers, paralegals and law clerks:

-The legal sector lost 1,800 jobs in December, according to the monthly jobs report released by the Department of Labor today. It's a tiny sliver -- .2 percent -- of overall legal services jobs, but brings the total number of legal sector jobs lost to 2,700 since December 2010.

-What's more, the legal sector also struggled in 2010, according to data released by the Department of Commerce in December, the most recent available. Although the profession grew 2.34 percent in 2010 to generate $3.9 billion, or 1.31 percent of GDP, the rate of growth was less than the economy as a whole says Matt Leichter in this piece in the American Lawyer. Plus, the sector is still smaller than it was in 2000, says Leichter, and recent law grads probably didn't benefit from the bump up, he says. "True, we don't know what happened in 2011, but with painfully slow growth overall and the fade out of the 2009 stimulus, I don't think 2011 will look better than 2010," Leichter writes. "In short, the U.S. legal sector is going nowhere." Leichter, by the way, runs the Law School Tuition Bubble blog, which can be found here.

With that, we're off to find some positive news for the day.

Lawyer faces prison and $1,000 fine over court delays

1/6/12

Now that's rough. A Minneapolis lawyer faces three months in prison and a $1,000 fine after allegedly lying to a judge over courtroom delays, the Minneapolis Star Tribune reports. M. Tayari Garrett allegedly told Hennepin County Judge William Howard that she had to postpone her client's mortgage fraud trial because she was sick, but hopped on a plane to Paris instead. Garrett has called the charges "preposterous and vindictive," said she was indeed hospitalized on the eve of trial and has called the judge biased. Undeterred, Howard found Garrett in contempt and referred her for criminal charges -- which is how the lawyer landed in the pickle she's in today.

N.J. Senator holds up 3rd Circuit nomination

1/6/12

The nomination of U.S. Magistrate Judge Patty Shwartz to a federal appeals court post is being held up by Shwartz's home state Senator, Robert Menendez, The New York Times reports in a front page story. President Obama nominated Shwartz for a seat on the 3rd Circuit Court of Appeals in October, but Menendez, a Democrat, has failed to return a so-called blue slip on Shwartz -- a home state senator's stamp of approval of a judge that allows a nomination to proceed through the Senate. Shwartz's longtime companion is a federal prosecutor in New Jersey who headed a unit that investigated Menendez in a public corruption inquiry. Menendez declined to comment to the Times, but his failure to lend his approval to Shwartz's nomination is seen as "acting out of resentment," for the inquiry the Times says.

Steven Donziger gets The New Yorker treatment

1/6/12

He's Harvard-educated, he's brash, he's representing the indigenous and the indigent -- and he's potentially in a lot of hot water. Now, Steven Donziger, the plaintiffs' lawyer who has spent years battling oil giant Chevron over alleged environmental damage in Ecuador, is also the subject of a profile in The New Yorker. The magazine this week tells how Donziger may have gone too far in his zealous representation of the Ecuadoreans, and how he is caught in the cross-hairs of Chevron's high-priced legal team, which has accused him of racketeering, colluding with Ecuadorean forces to extort money from Chevron.

The New Yorker piece is hardly the first in-depth look at the crusading lawyer; Bloomberg Businessweek's Paul Barrett dug deep in this March story, also telling of a daring plaintiffs' attorney who, too deep in a murky legal system, pushes the boundaries of legality. (Businessweek and the New Yorker both even feature the same photograph of Donziger surrounded by indigenous Ecuadorean clients). It's hard to think of any media outlet that hasn't shuttled off to the jungle to dig into the tale of the hard-nosed U.S. lawyer representing indigenous tribes in an environmental lawsuit against an oil behemoth. Vanity Fair did it, too. And Summary Judgments admits that she, too, journeyed to the Amazon more than five years ago to take a look at the litigation in action. (That story in The American Lawyer is here, but requires a subscription.)

Most of these pieces don't reveal much that hasn't been uncovered elsewhere -- they all tell of Donziger's push-the-envelope attitude; the incredible-seeming toxicity that plagues the Amazon; the down-and-dirty litigation that has spilled over into U.S. courts.

But what Summary Judgments concludes here is that there are just some stories that, no matter how often they are told, if they are told well, are worth reading. Did the New Yorker tell a totally new story? No. But it added rich context to a tale that keeps on giving. It discovered some new details about past settlement talks between the parties. It peppered the story with entries from Donziger's personal diary ("We all have too much invested to stop [the lawsuit]," is the coda that ends the piece. And it captured the lawyer with spot-on quotes, like this one, from a friend, on Donziger's tactics: "Knives are effective for cutting through things. But sometimes you can slice your own finger."

Summary Judgments for Jan. 5

Summary Judgments for Jan. 4

Summary Judgments for Jan. 3

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