Final Countdown For O'Shea
Monday, January 9, 2012 at 7:28AM
Richard L. Cassin in ABB, Fernando Maya Basurto, Foreign Official, John O'Shea, Jury Instructions, Mexico

Jury selection in John O'Shea's trial is scheduled to start on January 11.

The former ABB manager is being tried in federal court in Houston before Judge Lynn N. Hughes.

He's charged with one count of conspiracy to violate the FCPA, twelve substantive FCPA counts, four counts of international money laundering, and one count of falsifying records in a federal investigation. He also faces a forfeiture count.

The conspiracy and substantive FCPA counts each carry a penalty of up to five years in prison. The money laundering and falsification of records counts each carry a maximum penalty of twenty years in prison.

Last week, O'Shea lost his 'foreign official' challenge. He argued that alleged recipients of the bribes were employees of Comisión Federal de Electricidad (CFE), a Mexican state-owned enterprise. SOEs aren't government 'instrumentalities' under the FCPA, O'Shea said, so their employees aren't 'foreign officials.'

Judge Hughes didn't issue a written ruling. But he accepted as facts that under Mexican law electricity is a public service, CFE has a monopoly over it, a Mexican ministry sets requirements for CFE, the President of Mexico appoints the general director of CFE, and CFE's governing board includes ministry secretaries.

The judge in the Lindsey case also ruled that CFE was an 'instrumentality' under the FCPA and its people were 'foreign officials.'

After the ruling in O'Shea's case, prosecutors asked Judge Hughes for this jury instruction:

The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality. An “instrumentality” of a foreign government includes state-owned or state-controlled companies.

Last year, O'Shea lost motions to dismiss based on the statute of limitations and on government misconduct for withholding evidence.

Fernando Basurto is expected to testify against O'Shea. He's a Mexican citizen O'Shea hired to act as ABB's sales agent. Basurto admitted in a guitly plea in 2009 that he paid kickbacks to officials at CFE in exchange for contracts for ABB.

In September 2010, ABB Ltd of Switzerland reached a $58 million settlement with the DOJ and SEC. Its U.S. unit that O'Shea worked for pleaded guilty to one count of violating the anti-bribery provisions of the FCPA and one count of conspiracy to violate the FCPA. Since then, ABB has been cooperating with prosecutors by handing over evidence developed during internal investigations.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
See website for complete article licensing information.