FCPA Compliance and Ethics Blog

July 10, 2013

Dog Bite Defense No. 4 and the Defense of an FCPA Claim

As most readers of this blog know, I am a recovering trial lawyer. I almost always acted as defense counsel for corporations in my trial lawyer career. In the trial lawyer world, there are four recognized defenses to any claim which are known as the “Dog Bite Defenses”. They are:

  1. My dog didn’t bite you.
  2. Even if my dog did bite you, it’s because you provoked him.
  3. Even if my dog did bite you, you really aren’t injured.
  4. My dog didn’t bite you because I don’t have a dog.

The fourth version of the Dog Bite defense is certainly an ‘all-in’ move. You had either (1) better be right or (2) have some big kahunas to make that argument to a jury with a straight face.

I recently saw a couple of examples of the ‘Dog Bite’ defense which caught my eye. The first was in an article in the most recent issue of The New Yorker, entitled “Buried Secrets”, by Patrick Radden Keefe. His article discussed the ongoing situation involving the Beny Steinmetz Group Resources Group (BSGR), its mining concession in the country of Guinea and its representative Frederic Cilins, who is in jail in New York, denied bail and awaiting jail for obstruction of justice charges. In an exhaustively reported article, Keefe wrote about his interviews with many of the principal players in this saga including BSRG founder Beny Steinmetz, its representative Cilins and the current President of Guinea, Alpha Condé.

As reported in two Financial Times (FT) articles, entitled “Contracts link BSGR to alleged bribes” (the “mine rights article”) and “FBI sting says that ‘agent’ sought to have mining contracts destroyed” (the “FBI sting article”), by the same triumvirate of FT reporters Tom Burgis, Misha Glenny and Cynthia O’Murchu; there are allegations that “The resources arm of Beny Steinmetz Group agreed to pay $2m to the wife of an African president to help it secure rights to one of the world’s richest untapped mineral deposits, according to documents seen by the Financial Times”. These payments were allegedly memorialized in “Copies of two contracts from 2007 and 2008, apparently signed by BSGR’s representatives in the mineral-rich west African nation of Guinea, set out agreements for the company to make payments and transfer shares to Mamadie Touré, wife of the then president Lansana Conté.”

The FBI sting article reported that on Sunday April 14, 2013, “Frederic Cilins held the last of a series of meetings with the widow of an African dictator to discuss what she was going to do with some sensitive documents.” Unfortunately for Cilins he “did not realise that the woman he was talking to was wearing a wire and that FBI agents were watching. As he left the meeting, the agents arrested him carrying envelopes filled with $20,000 in cash, the indictment says. That was a pittance compared with the $5m he was taped offering the dictator’s widow during what US authorities say was a two-month campaign to tamper with a witness and destroy records.”

So how does the Dog Bite defense come into play here? As reported by Keefe during his interview with Beny Steinmetz, Steinmetz said “the documents that were discussed in Jacksonville did not prove anything, he said-they were forgeries”, these were the ‘alleged documents’ that Cilins was so keen to get back from Mamadie Touré. Keefe also reported that the BSGR representative, Asher Avidan, when presented with a photograph of a signature told Keefe that the signature “was identical to his own but dismissed it as “a simple Photoshop.”

While it might not be anything new to claim that a signature on a contract is a forgery, especially if you do not want to acknowledge that you signed the document in question, the next line of defense is certainly an ‘all-in’ play. During the interview with Avidan, he said that Mamadie Touré was “not his [the deceased President’s] wife. Not even sleeping with him. Then he added, “She is a lobbyist. Like a thousand others.” What this means for a defense under the Foreign Corrupt Practices Act (FCPA) is if the payments were made but they were not to a foreign government official or spouse, it might not be covered under the FCPA. The problem with this defense is that you do have to admit that (1) the contracts exist and (2) the payments were made or promised. So you had better hope that the jury believes it when you claim the counter-party to the contract was not the wife of the President.

And that ladies and gentlemen is Dog Bite defense No. 4.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2013

Blog at WordPress.com.