President Xi Hunts Big Prey the Boa Constrictor Way

Something remarkable is happening in China. It’s not just that tens of thousands of officials have been caught in President Xi Jinping’s corruption dragnet, or that the crackdown continues unabated even though contributors to this blog and former Chinese Presidents alike have long wondered, “surely this can’t go on much longer?” Instead, I’m talking about how President Xi is using his anticorruption program to slowly and methodically take down Zhou Yongkang, the “most powerful man in China.”

The targeting of Mr. Zhou is at once both extraordinary and routine. On the one hand, his downfall is more about politics than corruption, retribution for backing the wrong man in the transition that catapulted Mr. Xi to power in 2012. On the other, the purging of rivals is seemingly a rite of passage for Chinese leaders; Mao did it aplenty in the 1950s and Presidents Hu Jintao and Jiang Zemin “each engineered a high-profile sacking of a political rival (Shanghai boss Chen Liang and Beijing boss Chen Xitong, respectively).” But even then, there’s something different about Zhou’s fall from power — he’s not a provincial party chief, he’s a former member of the almighty Politburo Standing Committee, the former head of China’s feared domestic security services, and the biggest “tiger” yet targeted by President Xi.

And it’s that realization — that Zhou’s fall is momentous — that raises the most interesting question in this dramatic collision of corruption and politics: How did a President, who came to power without a solid independent base within the factionalized Communist Party, manage in just three years to take down the “most powerful man in China”? The answer lies in an intuitive but methodically executed four-step plan developed by President Xi and his Central Commission for Discipline Inspection. In the hope of shedding some light on how other nations might similarly take down the simultaneously corrupt and dangerously powerful without undermining political stability, let’s examine how President Xi has slowly choked off Mr. Zhou’s power.

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The ATS, the FCPA, and Being Thankful for Criminal & Civil Liability

In a recent post, Matthew teased out a counterintuitive worry that has bothered FCPA supporters in recent years — the fear that increased enforcement against individuals might actually be bad for the FCPA on the whole. Matthew’s argument is straightforward and intuitive: DOJ has long been able to press expansive interpretations of some of the statute’s more ambiguous provisions because corporations have been unwilling to litigate FCPA liability. But as the Esquenazi, Shot Show, and Aquilar cases show, individual defendants are far more likely to go to trial to combat FCPA charges. So, as DOJ prosecutes more individuals, we’re likely to see more extended legal challenges to the FCPA and, perhaps, more sympathetic defendants. Maybe the decisions will continue, like Esquenazi, to go DOJ’s way. The fear, though, is that they may not, and that narrowing constructions of the statute could undercut its deterrent force.

Matthew’s post drew my thoughts to another statute — specifically, the Alien Tort Statute (“ATS”) — which has graced our pages a couple times courtesy of Maryum (here and here). Over the past few decades, the ATS — a two-centuries-old statute that permits aliens to sue in U.S. courts for torts committed in violation of the law of nations — has followed a path that is, in a way, the inverse of the FCPA: at first it was used primarily to sue individual foreign officials who often fled U.S. jurisdiction rather than litigate; only after a few decades was the ATS commonly used to target corporations, and these targets began to push back in court. Unfortunately for ATS plaintiffs, that inverse story arc hit its climax in the Supreme Court’s 2013 decision in Kiobel, a case that did to the ATS what Matthew fears might happen to the FCPA.

Fret not, though, supporters of the FCPA! Yes, the rise and fall of the ATS might teach us something about the fate of the FCPA — but I think the lesson is to be thankful, not fearful. Here’s why: Continue reading

Shoddy Craftsmanship: How Not to Design an Independent Prosecutor

There is a reason that New York Governor Andrew Cuomo has graced the pages of the Global Anticorruption Blog so many times in recent months (see here, here, here, and here): life just isn’t easy for a candidate who campaigns on promises to clean up politics only to drown in allegations once in office. Today I offer another installment in our (entirely unofficial) series on the trials and tribulations of New York’s Governor: “Designed to Fail: Andrew Cuomo’s Interactive Guide to Building an Independent Anticorruption Prosecutor. (Parts Sold Separately).”

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Williams-Yulee and Why It’s Time for America to Stop Electing Judges

For casual news fans and avid U.S. Supreme Court junkies alike, the past week’s headlines have been dominated, not surprisingly, by stories about Obergefell v. Hodges, the same-sex marriage case.  But there’s another story that emerged from the Court this week that deserves special attention in this forum:  Williams-Yulee v. Florida Bar Association. In that case — issued the day after oral argument in Obergefell — the Court once again waded into America’s longstanding but peculiar experiment with judicial elections.

For more than 150 years, the United States has stood apart from most of the world in its practice of electing judges; today, 39 U.S. states elect at least some judges and 87% of state court judges will stand for an election at some point in their careers. Why this fascination with judicial elections? Well, it can be chalked up to the populist origins of the practice — as a measure for combating corrupt patronage networks in the mid-1800s — and the belief that elections render judges more democratically accountable.

But as states like Florida have learned, judicial elections never lived up to their populist promise. In fact, there was a time, not so long ago, when corruption ruled Florida’s judiciary. The stories abound: There was the judge in the late 1960s who required lawyers to contribute to his campaign before they could argue. Even more embarrassing were the three members of the Florida Supreme Court who resigned in the early 1970s after getting caught pressuring lower courts to rule in favor of the justices’ campaign donors, allowing an interested party to ghostwrite an opinion, and enjoying a gambling spree in Las Vegas courtesy of a dog track that was litigating a case before the court. The reason for this gap between theory and practice: the need to raise campaign funds undercuts judicial integrity and invites quid pro quo corruption.

Now, Williams-Yulee turned out to be a victory for anticorruption: the Court held that Florida could bar judicial candidates from personally soliciting campaign contributions. Unfortunately, though, the victory is small and fleeting: the Court’s reasoning focused on the extremely narrow nature of the Florida rule and impliedly rejected most campaign finance restrictions in judicial elections (beyond contribution limits). So even after Williams-Yulee, states still have little in their arsenal with which to combat the evils of judicial elections. Maybe then, in an era when more and more money is flowing into judicial campaigns, Williams-Yulee ought to be our wake-up call — a sign that its time for the United States to kick the “insanely and characteristically American” habit of electing judges.

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Why International Double Jeopardy Is a Bad Idea

In a recent post, I argued that U.S. authorities investigating British pharma giant GlaxoSmithKline (“GSK”) should consider criminally prosecuting GSK but partially offsetting any attendant penalty in light of the $490 million fine already imposed by China. This option is only available to the DOJ, though, because it stands on one side of a crucial divide in the global anticorruption regime: the U.S. — unlike Canada, the U.K., and the European Union — does not recognize an international variant of ne bis in idem (“not twice for the same thing”) (also known as “international double jeopardy”).

Recognizing an international double jeopardy bar can have a dramatic impact on a country’s capacity to combat international corruption. For countries like the U.K., being second-in-line to target an instance of transnational bribery often means not being able to prosecute the conduct at all. (For example, in 2011, the U.K. had to forego criminal sanctions against DePuy International because the U.S. had already prosecuted the British subsidiary.) In recent years, though, a spike in the number of parallel and successive international prosecutions has inspired a small but growing chorus of commentators calling for countries like the U.S. to formally embrace international double jeopardy.

To these commentators’ credit, many of their arguments sound in basic notions of fairness: you shouldn’t punish someone twice for the same crime. But before we jump on the double jeopardy bandwagon, I want to spend a few minutes explaining why, when it comes to the global fight against transnational bribery, double jeopardy probably isn’t all it’s cracked up to be.

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Prosecuting Elected Officials for Corruption: A Tale of Four Governors

As Phil and Rick pointed out a few months ago, America’s domestic anti-bribery laws and the attendant court interpretations are, for lack of a better term, a hot mess. In principle, the crime of bribery is straightforward: To secure a conviction, the prosecutor need only convince the jury that (1) there was some agreement (explicit or otherwise) whereby (2) the official would receive something of value (3) in exchange for using his official position in some manner. Unfortunately, though, that burden of proof often becomes far more complicated when the alleged bribe recipient is a high-ranking elected official. When a politician regularly solicits campaign contributions and simultaneously wields political influence to the benefit of constituents, it is often hard to see where politics ends and corruption begins. And after the U.S. Supreme Court’s decisions in cases like Citizens United and Skilling, prosecutors are left wondering when the corrupting influence of money on politics can still be prosecuted as “corruption.”

Today, I want to step back from this confusion and distill a few lessons that I believe still hold true for any US prosecutor investigating an elected official for bribery. To do that, I consider allegations that have been made against four past and present governors — Rod Blagojevich (Illinois), Andrew Cuomo (New York), Don Siegelman (Alabama), and Robert McDonnell (Virginia) — and ask one loaded question: what does it take to prove that an elected official misused his position in exchange for something of value?

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Prosecuting GSK: How to Deal with Being Second in Line

As followers of the anticorruption blogosphere know, China recently fined British pharmaceutical giant GlaxoSmithKline (“GSK”) $490 million for bribing Chinese doctors and hospital administrators. There is no need rehash here what many others have already said: this case is likely a watershed moment marking China’s emergence as a force in the global fight against corruption.

But there is another aspect of the story that has gone unnoticed: With rare exceptions, the U.S. Government’s corporate FCPA settlements have either preceded any foreign enforcement action (e.g., Total) or been announced as part of a coordinated global settlement (e.g., Siemens). But China’s prosecution of GSK has put U.S. regulators in a relatively unfamiliar position: that of the second mover. And in doing so, China has forced the Department of Justice to confront a difficult question: Should it care that China has already fined GSK for the same conduct that DOJ is investigating.

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