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« Bourke Free For Appeals, Previews SCOTUS Pitch | Main | Shifting The FCPA Reform Debate Into High Gear »
Thursday
Jan122012

'It's A Growth Industry, Isn't It?'

Jack Stanley's admissions when he pleaded guilty three years ago to conspiracy to violate the FCPA and commit mail and wire fraud were staggering.

The former CEO of KBR helped funnel $182 million in bribes to government officials in Nigeria. 

Judge Keith P. Ellison gave Stanley a preliminary sentence of 84 months in prison (subject to final review after his cooperation) and ordered a $10.8 million restitution payment.

On February 3, Stanley is set to appear again before the judge to learn his final sentence.

Here's a look at what happened during Stanley's initial appearance, arraignment, and plea before Judge Ellison on September 3, 2008. William Stuckwisch was the prosecutor.

*      *      *

THE COURT: Unless I have forgotten how to do multiplication, six and a half years would be what, 78 months?

MR. STUCKWISCH: That's correct, Your Honor. The [Federal Sentencing] Guidelines range calculated by the Government for Count Two would be 78 to 97 months.

THE COURT: So it is within that Guideline range?

MR. STUCKWISCH: It would be within the Guideline range on Count Two, and then --

THE COURT: I know, Count One would be a lot higher.

MR. STUCKWISCH: Correct.

THE COURT: And in terms of the purposes of punishment, do you think this is primarily as a matter of
general deterrence? I doubt he's a continuing risk, is he?

MR. STUCKWISCH: No, Your Honor, we don't believe he's a continuing risk. It's both -- it's general deterrence in the area of enforcement of the Foreign Corrupt Practices Act. A sentence such as this would send a message to other executives that foreign bribery is taken very seriously and penalties will be paid for violators of the Act. In terms of Mr. Stanley himself, I should note that his conduct here was egregious.

THE COURT: I'm concerned about the conduct. I'm concerned about it.

MR. STUCKWISCH: Yes, Your Honor.

THE COURT: Is this comparable to other sentences that have been imposed pursuant to the Foreign Corrupt Practices Act?

MR. STUCKWISCH: This would be the longest sentence to date in a Foreign Corrupt Practices Act.

THE COURT: That's what I wondered about. I know it's a growth industry, isn't it, the Foreign Corrupt Practices Act? It's keeping a lot of white collar lawyers busy; is that fair?

MR. STUCKWISCH: I think that's fair. I believe the previous longest sentence of an individual in an FCPA case was I believe 60-odd months here in Houston. [Editor's note: sentence of Douglas Murphy, American Rice Inc., 63 months.]

THE COURT: The distinguishing aspects of this one are the dollar volume and the far-ranging nature of the conspiracy?

MR. STUCKWISCH: Those are distinguishing factors, and Mr. Stanley's position at the company. He was the CEO and chairman of his company.

THE COURT: Was it a Halliburton subsidiary; is that right?

MR. STUCKWISCH: We haven't identified the company in the public papers, Your Honor, because of Justice Department Guidelines about identifying uncharged wrongdoers.

THE COURT: Okay.

MR. STUCKWISCH: But if that's important to your consideration --

THE COURT: No, no. I know something about that corporation. He wasn't the chairman of the corporation. It's set forth in the Pretrial Report he was chairman of some subsidiary, I have to believe.

MR. STUCKWISCH: That's right, Your Honor, he was the chairman of a major global engineering and construction services company, business around the world, constructing, among other things, large liquefied natural gas plants, which were at issue in these projects. This case is distinguishable also because of the wide range and high level of the officials, the foreign government officials whom were to be bribed. This scheme is distinguish able from previous cases by the sophistication of the scheme, funneling the bribes through agents and Swiss bank accounts, other foreign bank accounts, shell companies, nominee accounts. I think it's fair to say that this is the largest FCPA prosecution to date.

THE COURT: Well, I'm not trying to play defense counsel, I'm really not, but I'm concerned about this proceeding, as I am about all proceedings. But it appears Mr. Stanley was dealing with a substantial physical dependency during much of this time. Was that factored in?

MR. STUCKWISCH: Yes, Your Honor.

THE COURT: I know the Guidelines don't allow you to, but --

MR. STUCKWISCH: No, it was factored in, Your Honor. We considered not only his conduct here, but his personal circumstances, including his alcoholism and his current health. We've also considered our ongoing investigations and the needs of our investigation and our desire that Mr. Stanley cooperate --

THE COURT: All right. Do you think a 5K [downward sentencing departure based on Substantial Assistance to Authorities] is realistic?

MR. STUCKWISCH: If Mr. Stanley provides substantial assistance, I think a 5K is realistic, yes, Your Honor. And we have every expectation that Mr. Stanley is going to provide substantial assistance, to be perfectly honest. We wouldn't be doing the deal unless we believed that.

Reader Comments (1)

Now I wonder why the Judge was so interested in the identity of the parent company? Just who was the CEO at the time of the initial Bonny Island negotiations?
January 13, 2012 | Unregistered Commenterthebungblog

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