Corruption

As you’ve likely heard, there’s a Southern governor on trial for public corruption.

Shockingly, he’s not from Louisiana.

Former Virginia governor Bob McDonnell and his wife Maureen are on trial for, in essence, taking gifts from a guy named Johnnie Williams in exchange for doing things in the governor’s mansion (there are also some bank fraud charges and obstruction charges, but frankly, in comparison to the public corruption stuff the bank fraud is terribly dreary). After five weeks of trial and testimony, the case just went to the jury.

UPDATE (5:40 p.m.): And the McDonnells got convicted.

There has been a lot of commentary on the McDonnell trial (see, e.g., here, here, here, and here). One thing that hasn’t been talked about during the trial much: the defense severance motion that was denied at the very start.

And, as the trial has continued, that motion looks more and more important in hindsight….

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A few weeks ago, China’s police accused GlaxoSmithKline’s former head of China operations of making  illegal payments to Chinese doctors to boost GSK drug sales. Last fall witnessed the high-profile trial, conviction, and life sentence of Bo Xilai, the former head of the Chongqing Communist Party, on bribery charges. These two cases send a clear warning: Beijing is cracking down on corruption. Hard.

The GSK case shows that China will not tolerate corrupt activities by foreigners in sensitive industries, especially when such activities result in higher consumer prices. Beijing going after a foreign company for allegedly increasing health care prices is a smart political move, especially since the Chinese web is rife with complaints about exactly that.

But at the same time, it has become clear that Beijing is serious about rooting out corruption. The Party leaders in Beijing know that widespread corruption weakens their legitimacy and they are looking for ways to combat it. The important link between the Bo Xilai and the GSK cases is that they both involve defendants — a political elite and a foreign entity — whose arrests have engendered widespread discussion and sent a strong signal that no one in China is safe from prosecution. While Westerners are mostly complaining about the GSK arrests (multiple GSK employees have been arrested in addition to its former head of China operations), the Chinese internet is mostly loving it.

As a foreign company doing business in China, how should you react to the recent corruption crackdown?

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U.S. Attorney Preet Bharara

* U.S. Attorney Preet Bharara wants to know more about why Governor Andrew Cuomo shut down an anticorruption commission. [New York Times]

* The ABA weighs in on the “unfinished business” controversy affecting bankrupt law firms, their lawyers, and their clients. [WSJ Law Blog]

* Better late than never: students and professors at UC Davis Law are pushing for the posthumous admission to the California bar of Hong Yeng Chang, who was denied a law license in 1890 solely because of his Chinese heritage. [Associated Press; South China Morning Post]

* Speaking of late, a robber sent to prison 13 years late because of a clerical error just got released. [ABA Journal]

* Drones could claim another victim: the First Circuit nomination of Harvard law professor David Barron. [How Appealing]

* Who still wants a landline phone? The jury foreman in the latest Apple-Samsung battle, who is sick and tired of cellphones after the month-long trial. [The Recorder (sub. req.)]

* Not such a Great Adventure: “Cadwalader To Pay $17M In Six Flags Malpractice Fight.” [Law360 (sub. req.)]


Is there no end to the hidden musical talents of legal luminaries? With all their left-brained success, we forget that legal smarties can also have a well-developed creative side. For example, Judge Learned Hand cut a single back in the day. And Judge Richard Owen wrote an opera about Abigail Adams.

Now a giant of the legal academy has entered the music biz. The composer not only performs the short ditty for us all, but also fully annotates the lyrics to provide background to the song….

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SLU Law’s recent deanship drama?

* The Department of Justice announced federal charges against suspected Boston bomber Dzhokhar Tsarnaev yesterday, leaving the decision of whether the death penalty will be sought in Eric Holder’s hands. [National Law Journal]

* Andrew Ceresney, most recently of Debevoise, was appointed to run the SEC’s enforcement bureau alongside George Canellos, an agency veteran. Maybe they’ll both be able to boost morale. [DealBook / New York Times]

* “[T]he best way to find Albany on a map is to look for the intersection of greed and ambition.” Preet Bharara is mad as hell about corruption, and he’s not going to take it anymore. [New York Law Journal]

* If Anthony Weiner decides to join the New York City mayoral race, partners from Am Law 200 firms will be responsible for his second coming thanks to their pre-wiener scandal funding. [Am Law Daily]

* “It’s done. Turn the page. The distraction is over.” The new dean of St. Louis University’s law school would like to move forward from the “slow-motion train wreck” of years past. [St. Louis Post-Dispatch]

You really don’t want to be sued in a corrupt, backwater swamp.

No, no! I don’t mean Louisiana! I mean a truly corrupt backwater swamp like, say, Sudan.

(I pick Sudan because it’s subject to sanctions by most first-world countries, so I don’t have to worry about someday being dragged before a Sudanese judge who isn’t tickled by my having called his country a “corrupt, backwater swamp.” I may well pay a price for having tarred Louisiana with that label, but my opening two sentences just wouldn’t have been funny if I hadn’t named a specific state. I’ll have to hope that judges in Louisiana have a sense of humor.)

You get sued in Sudan. You hire Sudanese counsel. You probe him about Sudanese substantive law, Sudanese procedure, and whether the Sudanese judicial system can be trusted. He answers your questions about corruption with vague assurances about how he’s a pretty well-connected lawyer, and most judges aren’t too bad, and corruption isn’t quite as rampant as outsiders seem to think. Then he goes on to explaining how he’ll defend your lawsuit.

That advice may be okay as far as it goes, but it’s missing the global perspective. Here’s one place where in-house lawyers — and sophisticated outside counsel — can add real value in litigation….

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Suppose you’re doing business in a country that is perceived as being corrupt. For example, Myanmar, North Korea, and Somalia take the bottom three slots in the 2010 Corruption Perceptions Index.

Okay, let me rephrase that: Suppose you’re doing business in a country where it’s actually lawful to do business, but the country is perceived as being corrupt. Cambodia or Zimbabwe might fit the bill. (On reflection, it strikes me that my own company may actually do business in those two places. If we do, then I, naturally, love the judicial systems in Cambodia and Zimbabwe. If my company is ever in court in one of those places, please don’t hold this column against us. It’s just that terribly unfair perception of corruption that gives you guys a bad name.)

How do you conduct business there?

Very carefully, of course.

As a matter of compliance, your company must implement policies that forbid payments that are customary in the corrupt place, but forbidden by U.S. law. And your company must enforce those policies, perhaps by having a regional group that approves third parties with whom you do business or otherwise strives to comply with the law.

But that’s the front end. What do you do at the back end, if you find yourself in a dispute in the corrupt place?

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Earlier today, the former top brass at the prosecutor’s office for Arizona’s largest county felt the long arms of the law pick them up, shake them hard, and toss them out the building.

The former Maricopa County attorney and one of his deputies were disbarred for a strikingly long list of ethical violations (a second deputy’s law license was suspended as well). What did they allegedly do? And did they show any remorse to their alleged victims?

Without further ado, let’s learn the scandalous story behind our ex-lawyers of the day….

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Legal outsourcing makes her happy.

* Demand for attorneys well-versed in animal law is on the rise as pet owners push for recognition of their pets as family members rather than ordinary property. Which reminds me of my dog Rascal. He ate his own crap, licked furniture, and once peed on a baby. And when he died, my parents looked at me and said, “It should have been you.” [Baltimore Sun]

* Yesterday in the life of Mikhail Khodorkovsky has American diplomats crying about a traveshamockery. [Bloomberg]

* Joe Miller may allow Lisa Murkowski to be certified as the winner of Alaska’s contested U.S. Senate seat, but Miller isn’t done scrapping and a’clawing. Shine on you crazy diamond. Shine on. [Washington Post]

* 200 massholes in the Massachusetts Legislature and only 52 of them are attorneys. [Boston Globe]

* Sotomayor, so hot right now. Sotomayor. [New York Times]

* Another article about legal outsourcing. Better bone up on your trivia, slumdogs. Ouch. That one barely makes sense. [Chicago Tribune]

* The Brits have beefed up their laws against companies bribing foreign officials. Reached for comment, Mr. Bean made a stupid face. [Wall Street Journal]

This morning the United States Senate voted to convict Judge G. Thomas Porteous of Louisiana on all four articles of impeachment he faced. These convictions will remove him from his lifetime seat on the federal bench, making him only the eighth federal judge in U.S. history to suffer this fate, and strip him of the $174,000 pension he would have otherwise enjoyed.

Article I accused Judge Porteous, 63, of bringing the federal judiciary “into scandal and disrepute,” as a result of his “corrupt financial relationship” with attorneys appearing before him (who gave him “gifts”). The vote was unanimous: 96-0. Ouch.

Apparently the senators were not persuaded by Professor Jonathan Turley’s argument that Judge Porteous (E.D. La.) wasn’t guilty of high crimes and misdemeanors, but simply “something of a moocher.” Think Kato Kaelin, but in a black robe.

Judge Porteous fared a bit better on the other three articles of impeachment….

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