The u.s. justice department is 5 times more likely to prosecute you if you cannot afford an attorney. If you have a legal department and maybe some lobbiests you have practical immunity from federal prosecution. See the story below of Wal-Mart bribery, and a federal appeals judge who has sanctions the use of false testimony by federal prosecutors.
VIEWS » MAY 16, 2012
The U.S. Department of Double Standards
On April 21, The New York Times reported that Wal-Mart de Mexico paid $24 million in bribes to local land use officials in exchange for allowing the company to build stores in virtually every corner of the country, and to make environmental objections vanish. Although its top executives apparently approved of and helped conceal the bribery scheme – in violation of the Foreign Corrupt Practices Act – the chances that any of them will face criminal prosecution is remote.
It’s not that the U.S. Department of Justice (DOJ) doesn’t criminally prosecute people who pay bribes to avoid land-use restrictions on their property. Rather, the feds prefer to bring such cases against people who don’t have access to corporate lobbyists – or even to private lawyers. According to Bureau of Justice statistics, just one in five felony defendants has private counsel.
Consider the case of Dumitru Curescu, a former janitor who recently faced two federal trials for the crime of paying $10,000 to an expediter for help obtaining a permit to build two additional garden apartments in his 13-unit building on Chicago’s North Side. Curescu, an immigrant from communist Romania who became a naturalized U.S. citizen in 1988, was advised by his architect in 2006 to hire the expediter Catherine Romasanta, when he did his first renovation project. But when he called her again in 2007, she was working as an informant for the feds and recording their calls.
In the fall of 2007, Curescu paid Romasanta the agreed-upon fee and received his building permit. Seven months later, with the renovations nearly complete, federal agents arrested Curescu and his wife Lavinia and seized their building. The feds charged both husband and wife with five counts of bribery and conspiracy.
Financially ruined, the couple chose to fight the case; I was Curescu’s court-appointed counsel. During a three-week jury trial, federal prosecutors played tapes of Curescu’s negotiations with Romasanta and argued to the jury that he and Lavinia knowingly passed a bribe through Romasanta to a city official to get around Chicago’s zoning restrictions.
The jury acquitted Lavinia on all charges but failed to reach a verdict on her husband. The government decided to try again. At the retrial, the prosecutors elicited false testimony from Romasanta about the number of apartments Dumitru Curescu had added during his first renovation project in 2006, thereby making a tape-recorded comment by Curescu about the fees he had paid her sound like a comment about a bribe payment. The prosecutors then falsely argued to the jury that this comment was proof that Curescu knew that his expediter bribed officials. Curescu was convicted on two of five counts and sentenced to six months in prison.
On March 21, Curescu’s appeal was denied. In a groundbreaking opinion authored by Judge Richard Posner, the U.S. Court of Appeals ruled that federal prosecutors may present false testimony to prove their case “hoping the error would not be caught” as long as they can establish on appeal that the “error [did not] reduce the defendant’s likelihood of being acquitted.” “Judges are not to use reversal to punish governmental misconduct,” Posner declared.
New York Times columnist James B. Stewart has written extensively about corporate executives at companies such as Wal-Mart and Tyson Foods, which regularly pay bribes to avoid troublesome regulations. In his recent column about the Wal-Mart scandal, Stewart reports that he “couldn’t find a case of an executive at a major American-based, publicly traded company who was successfully prosecuted and sent to jail.”
Yet the feds spared no expense or ethical restraints to make sure that Curescu went to jail, despite the testimony of his architect that the former janitor had “no knowledge” about the permitting process.
On April 2, after two lengthy and expensive federal trials and an unsuccessful appeal, Curescu entered a federal prison in Oxford, Wis. Three weeks later his bank sent notice that it is foreclosing on the Curescus’ home where Lavinia lives with their three children. Meanwhile, in a recent SEC filing, Wal-Mart predicted its bribery scandal will not have a “material adverse effect on [its] business … or cash flows.”
Judge Richard Posner:
Legal career
In 1968, Posner accepted a position teaching at Stanford Law School.[2] In 1969, Posner moved to the faculty of the University of Chicago Law School, where he remains a Senior Lecturer and where his son Eric Posner is a Professor. He was a founding editor of the Journal of Legal Studies in 1972.
On October 27, 1981, Posner was nominated by President Ronald Reagan to a seat on the United States Court of Appeals for the Seventh Circuit vacated by Philip Willis Tone.[3]Posner was confirmed by the United States Senate on November 24, 1981, and received his commission on December 1, 1981. He served as Chief Judge of that court from 1993 to 2000 but remained a part-time professor at the University of Chicago.[3]
Posner is a pragmatist in philosophy and an economist in legal methodology. He has written many articles and books on a wide range of topics including law and economics, law and literature, the federal judiciary, moral theory, intellectual property, antitrust law, public intellectuals, and legal history. He is also well known for writing on a wide variety of current events including the 2000 presidential election recount controversy, Bill Clinton's affair with Monica Lewinsky[3] and his resulting impeachment procedure, and the 2003 invasion of Iraq.
His analysis of the Lewinsky scandal cut across most party and ideological divisions. Posner's greatest influence is through his writings on law and economics, The New York Times called him "one of the most important antitrust scholars of the past half-century." In December 2004, Posner started a joint blog with Nobel Prize-winning economist Gary Becker.[4] He also has a blog at The Atlantic, where he discusses the financial crisis.[5]
Posner was mentioned in 2005 as a potential nominee to replace Sandra Day O'Connor because of his prominence as a scholar and an appellate judge. Robert S. Boynton has written in The Washington Post that he believes Posner will never sit on the Supreme Court because despite his "obvious brilliance," he would be criticized for his occasionally "outrageous conclusions," such as his contention "that the rule of law is an accidental and dispensable element of legal ideology" his argument that buying and selling children on the free market would lead to better outcomes than the present situation, government-regulated adoption, and his support for the legalization of marijuana and LSD.[6]
By DAVID LUHNOW And ANTHONY HARRUP
MEXICO CITY–The office of Mexico's attorney general said Thursday that it has started an investigation into allegations of bribery involving officials of retailer Wal-Mart de Mexico SAB and government officials.
In a statement, the attorney general's office said it had begun an inquiry to establish whether a criminal investigation was warranted. It added that no complaint had yet been lodged against the company, a unit of U.S.-based Wal-Mart Stores Inc.
Wal-Mart's Woes
Take a look at some past issues the world's biggest retailer by sales has confronted.
Walmex, as the retailer is known in Mexico, is at the center of an investigation by its parent company into allegations that officials used bribery to secure permits for its rapid store expansion south of the border, where the retailer now accounts for more than half of all supermarket sales. Walmex has said it is cooperating with that probe.
The investigation marks an abrupt turnaround for the government, which initially said it wouldn't investigate the allegations, first reported over the weekend in the New York Times.
In the days after the scandal broke, the attorney general's office said it didn't have jurisdiction, and other officials said the matter couldn't be investigated by federal authorities because it probably involved bribes to local and state officials, rather than federal officials.
But the government changed tack when local newspapers began to point out that Wal-Mart Stores was facing investigation in the U.S, but not in Mexico, where the alleged corruption took place. Mexico's leading daily, Reforma, said the government's attitude about the scandal was "relaaaax."
The change in tone began on Wednesday, when Mexican's Ministry of Public Functions, which acts as a watchdog for the public sector, said it would analyze federal permits secured by Walmex for store openings.
President Felipe Calderón, on a visit to Texas, also said on Wednesday he was "indignant" about the alleged corruption.
Thursday, more government agencies lined up to add their voice. The Environmental Protection Ministry said it has asked the comptroller's office to review six permits it has granted Walmex for any irregularities.
In response, Walmex said in a statement that it had "set up a process to guarantee that all requests from competent Mexican authorities that wish to review the permits and licenses issued to the company for the operation of its stores in Mexico are properly satisfied. "
Still, many analysts say the Mexican government would be unlikely to come down hard on Walmex. Legal experts say Mexican law makes proving allegations of corruption very difficult. If bribes were paid only at the state and local level, then state and local judicial officials would have to prosecute them, not federal officials.
Mexico's National Banking and Securities Commission has said it has no plans to investigate Walmex.
Write to David Luhnow at david.luhnow@wsj.com and Anthony Harrup atanthony.harrup@dowjones.com
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