As of yesterday, BAE has a compliance monitor. He’s David Gold, a former senior partner of Herbert Smith.
His term is three years, but BAE wants it cut short by 90 days.
A monitor was supposed to be in place by the end of June. That didn’t happen. The company blamed the DOJ for rejecting qualified candidates. The DOJ said BAE proposed the wrong people.
Judge John Bates granted BAE a 90-day extension for appointing the monitor. He also changed the description of the monitor’s term to make sure he or she would serve a full three years, as called for in the plea agreement, and not three years minus 90-days. But BAE objected. It said the judge could extend the appointment deadline but lacked authority to change the way the monitor’s term is described. The judge called BAE’s position “odd.”
In March, BAE paid a $400 million fine after pleading guilty to conspiracy, including lying to the U.S. government about its FCPA compliance program. Under federal sentencing guidelines, it could have been fined $720 million.
With Gold’s appointment, is BAE any happier? It doesn’t look like it. As far as we can tell, it’s still appealing the part of Judge Bates’ order that made sure the monitor would serve three full years.
We thought the U.S. government was generous with BAE. It let the company plead guilty to a single conspiracy count instead of a substantive FCPA charge. It reduced the criminal fine by $320 million, and allowed BAE to appoint a non-U.S. compliance monitor. But as Judge Bates might say, BAE’s way of showing gratitude is odd.
Dowload a copy of the judge’s June 4, 2010 order in US v. BAE Systems plc here.
Download a copy of BAE’s June 16, 2010 notice of appeal here.