A Connecticut federal judge at a 19 February hearing probed evidence that former Alstom executive Lawrence Hoskins had been an agent of the French power conglomerate’s US subsidiary, as she weighed a motion to dismiss his conviction or grant him a new trial.
The questions from US District Judge Janet Arterton seemed intended to drill down into the specific definition of “agency” as she mulled her decision. The judge said she was trying to test how evidence in the case “fits in the cubbyhole of agency” as opposed to another kind of relationship.
Hoskins’s December trial had hinged on whether the UK citizen, who’d worked for the Alstom parent company in France, had been an “agent of a domestic concern,” as defined by the US foreign bribery statue. Hoskins had argued that he wasn’t under the US company’s control and therefore the FCPA didn’t have jurisdiction over him as a non-US actor.
A jury however convicted Hoskins on a series of FCPA and money laundering counts related to his role in a scheme to bribe officials in Indonesia to secure a lucrative power contract known as the Tarahan project.
On Wednesday the judge asked lead prosecutor Dan Kahn, who previously led the DOJ’s foreign bribery unit, to outline the specific proof the government had presented to support its argument that Alstom’s Connecticut subsidiary, API, controlled Hoskins’s actions. Arterton said she wanted to clarify when an individual is an “agent" of a US company versus when he or she is simply taking occasional directions.
Kahn responded that there was an implicit agreement that Hoskins would work for API. Hoskins took instructions from API and frequently went back to the subsidiary to get “the all clear” on the hiring of consultants, Kahn said.
“If this is not an agency relationship, it’s hard to envision what could be,” Kahn said, stressing that the relationship was “very clear”.
Kahn reiterated a point he had made at trial, that Frédéric Pierucci, a former senior executive at the Connecticut subsidiary who managed the Tarahan project, was “calling the shots” on the project and the hiring of agents. Pierucci, while not Hoskins’s boss, essentially controlled his actions on the project, Kahn said.
Kahn also said the definition of agency in this case was particular to the “very unique organisation” that Alstom had structured for its employees.
In response, Hoskins counsel Christopher Morvillo also retrieved an argument he’d made at trial: that the Connecticut subsidiary couldn’t fire, demote, or in any way affect Hoskins’s position. “Those are the hallmarks you look for to see if someone was subservient,” said Morvillo, a partner at Clifford Chance.
Morvillo said that Hoskins’s role had included fielding requests from various business units across Alstom’s subsidiaries to hire consultants. “What Hoskins was doing was his job: to assist in the sales efforts and to ‘oversee’ – in the words of the indictment – the approval process” for consultants, he said.
The Connecticut employees, including Pierucci, “couldn’t overrule” Hoskins, Morvillo added. API “needed” Hoskins’s approval, which proves that he was not under the subsidiary’s control, Morvillo said.
“API didn’t control the entire aspect of the consulting process by a long shot,” Morvillo said.
In his rebuttal, Kahn said Morvillo’s argument was aired at trial and rejected by the jury.
Saying she wanted to take “a step back”, Judge Arterton posed questions about the reach of the FCPA. She questioned whether it’s appropriate for parent companies to be shielded from US jurisdiction when they “structure themselves” to have influence over a bribery scheme carried out by a subsidiary.
The defence and prosecution then disagreed over whether Alstom had purposely made attempts to evade US jurisdiction.
Kahn later added that he had “no concern here about any extraterritorial reach”.
“I don’t know what more we could have shown here to prove he was an agent,” Kahn concluded.
Judge Arterton thanked both sides for their “thoughtful and helpful arguments.” She noted that Hoskins’s scheduled 6 March sentencing is fast approaching, and that she would be issuing her opinion on the defence’s motions soon.
The evening before the hearing, the court unsealed charges against three more alleged conspirators in the scheme. A slew of documents and emails concerning the alleged co-conspirators had been presented at Hoskins’s trial.
Counsel to Lawrence Hoskins
Partners Christopher Morvillo and Daniel Silver in New York, assisted by Benjamin Peacock
Spears Manning & Martini
Partner Brian Spears
For the DOJ
Assistant US attorney David Novick in Connecticut, and fraud section deputy chief Dan Kahn and assistant chief of the FCPA unit Lorinda Laryea in Washington, DC