By Dylan Tokar
NEW HAVEN, Conn. -- A former Alstom SA executive mounted a
direct challenge to the long reach of the U.S. Foreign Corrupt
Practices Act on Monday, the first day of a trial in a case that
has raised legal questions about who is subject to the foreign
Lawrence Hoskins, a former senior vice president for the French
company, was charged in 2013 with helping organize a scheme to
bribe Indonesian officials for a $118 million power contract, in
violation of the FCPA.
The U.S. government's investigation of Alstom ended when the
company resolved its own FCPA violations in 2014, but the case
against Mr. Hoskins has lingered for more than six years, with the
former executive attacking prosecutors' application of the
The case, which already has led to a ruling that placed more
defined limits on who the government can charge with conspiring to
violate the statute, has been closely watched by FCPA lawyers.
During opening arguments at the U.S. District Court for the
District of Connecticut, a lawyer for Mr. Hoskins told jurors that
the FCPA did not apply to the former executive. "Why are we here?"
the lawyer, Dan Silver of Clifford Chance LLP, repeatedly asked
The FCPA applies to companies listed on U.S. stock exchanges and
private companies organized under U.S. laws, as well as their
shareholders, directors, employees and agents. Other companies or
individuals can be found to have violated the statute if they act
within the territory of the U.S.
Mr. Hoskins was a British national who worked in suburban Paris
and never set foot in the U.S. during his three years at Alstom,
Mr. Silver said. Prosecutors were trying to fit a square peg into a
round hole, he said.
Prosecutors allege that Mr. Hoskins acted as an agent of Alstom
Power Inc., a former Alstom subsidiary in Windsor, Conn. Alstom
sold its power business to General Electric Co. in 2015, after
agreeing to pay $772 million to resolve the FCPA probe.
Lawyers for Mr. Hoskins have disputed prosecutors'
characterization of his role at Alstom and what it means to be an
agent under the statute, which doesn't define the term.
The former executive didn't work for the Windsor, Conn.,
subsidiary, Mr. Silver said during his opening argument Monday.
Instead, his job in part consisted of approving requests by Alstom
subsidiaries to hire outside consultants, he said.
"When it came to hiring outside agents, Lawrence got to tell
Alstom Power Inc. what to do," Mr. Silver said. Mr. Hoskins was
never under the subsidiary's control, he said.
The former Alstom executive previously asked to have the bulk of
the charges against him thrown out before trial on similar grounds,
but a judge overseeing the case said the nature of his role at
Alstom was a factual matter that had to be determined by a
Mr. Hoskins's lawyers also tried to portray the former executive
as a scapegoat. "Guilt by association is exactly what the
government is trying to prove here," Mr. Silver told jurors. Mr.
Hoskins didn't stand to gain financially from the bribery scheme,
A prosecutor on Monday said Mr. Hoskins was much more central to
the scheme. One of his roles was to help Alstom Power bribe
government officials to win contracts by finding the right
middlemen, said Lorinda Laryea, an assistant chief in the Justice
Department's FCPA unit.
Alstom called the middlemen it hired consultants, but they were
essentially bagmen, she said. Executives sometimes used codewords
like "candy" to describe the bribes, she added.
Between 2005 and 2009, Alstom paid nearly $2 million to two
consultants in Indonesia, who in turn paid bribes to officials at
the country's state-owned energy company and a key member of its
parliament, Izedrik Emir Moeis, Ms. Laryea said.
Mr. Moeis was convicted in Indonesia for taking bribes from
Mr. Hoskins's trial will resume Tuesday with the cross
examination of David Rothschild, a former executive of Alstom
Mr. Rothschild, who was interviewed by the FBI in 2010 after he
was laid off by Alstom and agreed to record conversations with
other current and former executives, previously pleaded guilty to
conspiring to violate the FCPA.
Write to Dylan Tokar at firstname.lastname@example.org
(END) Dow Jones Newswires
October 28, 2019 21:04 ET (01:04 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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