The DOJ announced last week that a retired U.S. Army colonel, Joseph Baptiste, was charged in a complaint for his alleged role in a foreign bribery and money laundering scheme in connection with “a planned $84 million port development project in Haiti.”
While we know that Baptise was on the board of a company whose mission was to promote the development project, it’s hard to tell right now if that project was real or a scam. But we do know that the person who was interested in investing in the project, and the person Baptiste allegedly solicited the bribe from, wasn’t a businessman at all but an FBI undercover agent, also known as a UC.
That would make the Baptiste case an FCPA sting. And as the Wall Street Journal’s Sam Rubenfeld recently wrote, in the FCPA world that’s “an unusual tactic.”
My immediate reaction to the Baptiste case was also, “Uh oh, here we go again.”
An earlier FCPA sting, which involved 22 defendants, was known as the Africa sting. In that operation, which ended in January 2010, FBI UC agents had posed as intermediaries and representatives of the government of Gabon, Africa. The DOJ said the defendants agreed to pay bribes to the undercover agents to win contracts to sell body armor, weapons, and military gear.
But the cases collapsed. In two separate Africa sting trials that lasted a total of six months, there was a dismissal, and a mix of acquittals and deadlocked juries without a single conviction. In a series of evidentiary rulings, and courtroom issues that have been well reported, including the handing of the cooperating witness (me), the DOJ finally, in 2012, dismissed all of the indictments.
And as Sam Rubenfeld said last week, “The only person associated with that case to serve prison time was businessman Richard Bistrong, who was the cooperating witness in the sting after pleading guilty to his own unrelated bribery crimes.”
After my sentencing came speculation that we had seen the last of the FCPA stings, which brings us back to Joseph Baptiste.
After reading the affidavit of one of the FBI’s Special Agents on the case, I could see that all FBI stings aren’t created equal, even though undercover operations in FCPA cases are not new or unique. For example, in the 2014 prosecution of Joseph Sigelman, the former co-chief executive officer Petrotiger, the company’s attorney, Gregory Weisman, was a covert human source for the FBI, or what we think of as an informant. Weisman wore undercover video and audio devices when meeting with Sigelman.
But while Sigelman’s conversations with the company lawyer were covertly monitored, the elements of that case and those monitored conversations addressed real-world situations which would ultimately be charged. In contrast, in a sting operation, at least some of the structural components of the alleged crime are fabricated by the government, even when the cash is the real thing. That is certainly the case with the Haiti port operation in the Baptiste case. In other words, all stings are undercover, but not all undercover operations are stings.
So how is the Joseph Baptiste case different from the Africa sting?
In the FBI affidavit, there does not appear to be an informant who, like myself, would have been working down what might be a long jail sentence as part of cooperating with the Justice Department. And if there was an informant cooperating with the FBI, his or her role doesn’t appear to have been significant.
The absence of a critical cooperating witness dramatically reduces the reliance on testimony from a person whose past, and prior criminal conduct would be subject to long and brutal cross examination that could impact the jury. In my case, cross-examination in the second Africa sting trial went on for almost three calendar weeks.
In the Baptiste case, however, it appears that evidence would be presented on direct examination by FBI agents who are trained to provide testimony. While there would likely still be robust cross examination, it wouldn’t be mixed with questions about colorful tales of past behavior, which are fair game when an informant is testifying.
For example, when I was sworn-in during the second Africa sting trial, I was so nervous that my hand was shaking. I would later be scolded on cross-examination by a defense attorney who proclaimed to the court that the reason for my shaking was that I was still high on drugs (I wasn’t). Those are the types of distractions the government doesn’t have to deal with when using experienced agents to present their evidence instead of informants.
The Baptiste case is also different because the DOJ obtained court authorization to record the defendant’s phone calls under Title III provisions of the federal wiretap statute. That means a federal judge approved the intercepts based on the government’s detailed application. It also means neither Joseph Baptiste nor the person or persons he was speaking to knew that their conversations were being monitored and recorded.
In the Africa sting, calls were only consensually monitored, meaning that a judge didn’t approve the wiretaps because I had consented to having the calls recorded.
That’s a subtle difference. But typically Title III intercepts might carry more evidentiary value as opening a window into what transpires after conversations between the defendant and the UCs.
But despite those differences, there are still some telling similarities between the Africa sting and the Baptiste case. In both those cases, including numerous others, we see how the world of foreign bribery involves many colorful and interesting words used to describe a bribe. In the Baptiste case, according to the DOJ, there was “tipping,” making sure to “take care of a lot of people on the ground,” “advances,” and the well-known “grease.”
In my testimony in the Africa sting trials, I was subject to draining cross-examination as to why I never used the word “bribe” in my conversations with the defendants. For several evidentiary reasons I couldn’t share those details in the courtroom, but I share them now, especially when addressing compliance and commercial teams: It’s because people don’t say bribe!
Another similarity: The DOJ said Joseph Baptiste allegedly used money he took from the undercover FBI agent for personal expenses but “he intended to seek additional money from the undercover agents to use for future bribe payments in connection with the port project.”
As I found out the hard way, FCPA prosecutions can be all about “the promise.” I was convicted of conspiring to bribe a Nigerian official on a deal that never happened, and no money ever changed hands.
While the Baptiste case isn’t another Africa sting, it’s still a dramatic FCPA prosecution. I’ll be writing more as it unfolds.
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As a final note, I am not presenting a commentary on the Baptiste case or the veracity of the evidence, just my observations (as a former cooperator), contrasting and comparing certain aspects of that case and the Africa sting. And as the DOJ says, an indictment is merely an accusation and the defendant, Joseph Baptiste, is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
Richard Bistrong is a contributing editor of the FCPA Blog and CEO of Front-Line Anti-Bribery LLC. In 2010 he pleaded guilty to a conspiracy to violate the FCPA and served fourteen-and-a-half months at a U.S. federal prison camp. He was named to Compliance Week’s list of Top Minds in 2017 and was one of Ethisphere’s 100 Most Influential in Business Ethics in 2015.
His popular real-life compliance training video, Behind the Bribe, produced in cooperation with Mastercard, was released in June.
To request a demo of the full eleven-minute video or a licensing fee schedule, please click here.