On February 26, 2020, the US District Court for the District of Connecticut granted defendant Lawrence Hoskins’s motion for acquittal with respect to his convictions for violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and conspiring to violate the FCPA. The district court held there was insufficient evidence to prove that Hoskins acted as an agent for a U.S. subsidiary of Alstom, Alstom Power Inc. (API). Hoskins’s money laundering and conspiracy to commit money laundering convictions were upheld.
In October 2019, Hoskins was convicted by a jury of one count of conspiracy to violate the FCPA, six counts of violating the FCPA anti-bribery provisions, one count of conspiring to launder money, and three counts of money laundering; he was acquitted on one money laundering count. In trying the case, the Department of Justice (DOJ) argued that Hoskins, an employee of Alstom UK Ltd, acted as an agent of API and violated the FCPA through a scheme by which API and other Alstom entities bribed Indonesian government officials in exchange for assistance in securing a $118 million contract to provide power-related services to Indonesia. The district court granted Hoskins’s motion for acquittal for all six FCPA anti-bribery charges and for the charge of conspiracy to violate the FCPA.
The acquittal comes after years of litigation over whether Hoskins, a British citizen who was employed by a UK subsidiary of Alstom and “worked primarily for Alstom Resource Management SA, a French subsidiary of Alstom,” could have violated the FCPA for conduct committed outside of the US. In an earlier decision in this case, the Second Circuit had ruled that a foreign national can only violate the FCPA for conduct committed outside of the US if that individual was acting as an agent of an issuer or domestic concern. Under Second Circuit precedent, an agency relationship exists only if three elements are met: “(1) the manifestation by the principal that the agent shall act for him; (2) the agent’s acceptance of the undertaking; and (3) the understanding of the parties that the principal is to be in control of the undertaking.” Cleveland v. Caplaw Enter., 448 F.3d 518, 522 (2d Cir. 2006) (emphasis in original).
In this case, the district court, relying on Second Circuit precedent, held that the “right of interim control” is what distinguishes an agency relationship from a contractual relationship. A principal has interim control when the principal has the ability to control the agent’s performance beyond the initial instructions, including the ability to provide interim instructions on how the agent should perform his/her duties as well as the ability to terminate the agency relationship. The district court held that in viewing the evidence in the light most favorable to the government, the government had established that API controlled the hiring of third-party consultants for the proposed power project and that API gave Hoskins instructions in connection with the project, which Hoskins followed. API could not, however, terminate Hoskins’s authority to participate in the hiring of consultants.
The district court stated that the DOJ failed to establish that API had a right of interim control over Hoskins. The evidence demonstrated that API exercised broad control of the project in general and that Hoskins was willing to follow API’s instructions; however, neither of these was sufficient to prove that Hoskins was controlled by API as an agent, and the DOJ introduced no evidence that API could assess Hoskins’s performance or could terminate Hoskins’s authority to participate in the hiring of consultants, factors in assessing whether API had interim control over Hoskins. As a result, Hoskins’s motion for acquittal for the FCPA-related charges was granted. He was also conditionally granted a right to a new trial on the FCPA-related charges should the acquittal later be vacated or reversed.