Carson - Motion To Strike State Department Declaration

Case 8:09-cr-00077-JVS Document 352 Filed 05/02/11 Page 1 of 12 Page ID #:5953
1 Kimberly A. Dunne (SBN 142721) kdunne@sidley.com

SIDLEY AUSTIN LLP
2 555 W. Fifth Street, Suite 4000
Los Angeles, CA 90013-1010
3 Phone: 213 896-6000, Fax: 213 896-6600
Attorneys for Defendant, HONG CARSON
4
Nicola T. Hanna (SBN 130694) nhanna@gibsondunn.com
5 GIBSON DUNN & CRUTCHER LLP
3161 Michelson Drive, Suite 1200
6 Irvine, CA 92612
Phone: 949 451-3800, Fax: 949 451-4220
7 Attorneys for Defendant, STUART CARSON
8 Thomas H. Bienert, Jr. (SBN 135311) tbienert@bmkattorneys.com
BIENERT, MILLER & KATZMAN, PLC
9 903 Calle Amanecer, Suite 350
San Clemente, California 92673
10 Phone: 949 369-3700, Fax: 949 369-3701
Attorneys for Defendant, PAUL COSGROVE
11
David W. Wiechert (SBN 94607) dwiechert@aol.com
12 LAW OFFICES OF DAVID W. WIECHERT
115 Avenida Miramar
13 San Clemente, CA 92672
Phone: 949 361-2822, Fax: 949 496-6753
14 Attorneys for Defendant, DAVID EDMONDS
15
16
UNITED STATES DISTRICT COURT
17
CENTRAL DISTRICT OF CALIFORNIA
18
SOUTHERN DIVISION
19
UNITED STATES OF AMERICA CASE NO. SA CR-09-0077-JVS
20
Plaintiff, EX PARTE APPLICATION TO
21 STRIKE DECLARATION OF
v. CLIFTON M. JOHNSON IN
22 SUPPORT OF GOVERNMENT’S
STUART CARSON, HONG CARSON, OPPOSITION TO DEFENDANTS’
23 a/k/a “Rose Carson,” PAUL AMENDED MOTION TO DISMISS
COSGROVE, DAVID EDMUNDS, COUNTS ONE THROUGH TEN OF
24 FLAVIO RICOTTI, and HAN YONG THE INDICTMENT OR, IN THE
KIM, ALTERNATIVE, FOR AN ORDER
25 REQUIRING MR. JOHNSON TO
Defendants. APPEAR AT THE HEARING ON
26 DEFENDANTS’ MOTION
27
28
EX PARTE APPLICATION TO STRIKE DECLARATION OF CLIFTON M. JOHNSON OR FOR AN ORDER
REQUIRING MR. JOHNSON TO APPEAR AT THE HEARING ON THE MOTION
1 TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS

2 OF RECORD:
3 Defendants Stuart Carson, Hong “Rose” Carson, Paul Cosgrove and David
4 Edmonds (“Defendants”) hereby apply ex parte to strike the Declaration of Clifton M.
5 Johnson, which the Government submits in support of its Opposition to Defendants’
6 Amended Motion to Dismiss Counts One Through Ten of the Indictment (the
7 “Opposition,” Doc. No. 332). In the alternative, Defendants apply for an order
8 requiring that Mr. Johnson appear at the May 9, 2011 hearing on Defendants’ motion
9 to dismiss. Counsel for Paul Cosgrove and Hong Carson notified the Government of
10 this Application and the relief sought, and inquired whether the Government is going
11 to make Mr. Johnson available to testify at the hearing on May 9, 2011. On May 2,
12 2011, the Government informed Counsel for Defendant Cosgrove that it would not
13 agree to strike Mr. Johnson’s declaration, and would inquire whether the government
14 is going to make Mr. Johnson available. As of the time of this filing, the Government
15 has not confirmed the Government’s position with defense counsel. See Declaration
16 of Andrew J. Dunbar (“Dunbar Decl.”) ¶ 7. Accordingly, pursuant to this Court’s
17 “Procedures and Schedules,” the Government’s Opposition to this ex parte application
18 “must be filed not later than 24 hours” after this ex parte application is served. This
19 Application is based on the attached Memorandum of Points and Authorities, the
20 declaration of Andrew J. Dunbar, the Court’s entire file in this case, and any
21 additional evidence or argument offered at the hearing on this matter.
22
23 DATED: May 2, 2011 Respectfully submitted,
24 SIDLEY AUSTIN LLP
25
By: S/Kimberly A. Dunne
26 Kimberly A. Dunne
27 Attorneys for Defendant HONG CARSON
28
1 GIBSON, DUNN & CRUTCHER LLP

2
By: S/Nicola T. Hanna
3 Nicola T. Hanna
4 Attorneys for Defendant STUART CARSON
5
6 BIENERT, MILLER & KATZMAN PLC
7
By: S/Thomas H. Bienert, Jr.
8
Thomas H. Bienert, Jr.
9
Attorneys for Defendant PAUL COSGROVE
10
11
LAW OFFICES OF DAVID W. WIECHERT
12
By: S/David W. Wiechert
13
David W. Wiechert
14
Attorneys for Defendant DAVID EDMONDS
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2
1 MEMORANDUM OF POINTS AND AUTHORITIES

2 Defendants hereby apply ex parte to strike the declaration of Clifton M.
3 Johnson, which the Government submits in support of its Opposition to Defendants’
4 Amended Motion to Dismiss Counts One Through Ten of the Indictment (“Johnson
5 Decl.,” Doc. No. 333). The Government attached the declaration to provide this
6 Court with an opinion on the impact of the Court’s interpretation of the Foreign
7 Corrupt Practices Act (“FCPA”) on the United States’ relations with the international
8 community. Johnson Decl. ¶ 7. Specifically, Mr. Johnson states that the term
9 “foreign public official” in the Organization for Economic Co-operation and
10 Development (“OECD”) Convention on Combating Bribery of Foreign Public
11 Officials in International Business Transactions (the “Convention”) includes
12 employees of state-owned entities and that construing the FCPA in a way that is non-
13 compliant with the Convention would have “serious consequences” to U.S. foreign
14 policy. Id. at ¶¶ 3-4, 7. In reaching his conclusion, Mr. Johnson discusses the United
15 States’ role in negotiating the Convention’s provisions and the United States’
16 interpretation of them, and the United States’ efforts to conform its domestic
17 legislation to the requirements of the Convention. Id. at ¶¶ 2 (history of the United
18 States’ negotiation of the Convention), 3 (text of the Convention), 4 (text of selected
19 Commentaries to the Convention), 5 (United States’ interpretation of its obligations
20 under the Convention), 6 (history of United States’ assertions relating to the
21 Convention), 7 (argument on the foreign policy impact of interpreting the FCPA
22 inconsistently with the Convention). The Government attempts to use Mr. Johnson’s
23 declaration as a means to introduce into evidence inadmissible hearsay, unqualified
24 expert testimony, and wholly irrelevant information. For these reasons, Defendants
25 request that the Court strike Mr. Johnson’s declaration or, in the alternative, order Mr.
26 Johnson to appear at the hearing on Defendants’ motion to dismiss.1
27 1
Notably, the Government offers this declaration just one month after Johnson’s
identical declaration was stricken by the court in United States v. Aguilar. Dunbar
28 Decl., Exh. A (Johnson Declaration); Id., Exh. B (Order Granting Application to
1 I. Mr. Johnson’s Declaration Is Inadmissible

2 A. Mr. Johnson’s Declaration Is Based On Inadmissible Hearsay
3 Declarations are required to “be made on personal knowledge [and] set out facts
4 that would be admissible in evidence.” Fed. R. Civ. Proc. 56(c)(4); Local Rule Civ.
5 Proc. 7-7 (“Declarations shall contain only factual, evidentiary matter and shall
6 conform as far as possible to the requirements of F.R.Civ.P. 56(c)(4).”); Local Rule
7 Crim. Proc. 57-1. Mr. Johnson’s declaration should be stricken because it is based
8 largely on inadmissible hearsay. See Fed. R. Evid. 801 (defining “hearsay” as an out
9 of court statement offered to prove the truth of the matter asserted). For example, Mr.
10 Johnson offers the statements of “the United States,” and at least one United States
11 official, regarding the United States’ interpretation of the Convention, its compliance
12 with the Convention’s provisions, and its motivation in entering into the Convention.
13 Johnson Decl. ¶¶ 2, 5, 6. None of these statements falls within an exception to the
14 hearsay rule. See Fed. R. Evid. 803. Mr. Johnson’s declaration should therefore be
15 stricken.
16 B. Mr. Johnson’s Declaration Offers Inadmissible Expert Testimony
17 Mr. Johnson’s declaration should also be stricken because it includes improper
18 alleged expert testimony regarding the Convention, the FCPA, and the foreign policy
19 impact should the Court adopt an interpretation of the FCPA that is inconsistent with
20 the Government’s present view. In order for Mr. Johnson to offer his opinions on
21 these subjects, he must be “qualified as an expert” and his opinions must be reliable
22 and “based upon sufficient facts or data.” Fed. R. Evid. 702. Neither of these
23 requirements are met.
24 The Government has made no effort to qualify Mr. Johnson as an expert on the
25 issues he is addressing, beyond stating his title and that he is “familiar with
26 international anti-corruption law and practice.” Moreover, the Government has failed
27
Strike). The same declaration is also the subject of a pending motion to strike in
28 United States v. O’Shea. Id., Exh. C (Johnson Declaration); Id., Exh. D (Motion).
2
REQUIRING MR. JOHNSON TO APPEAR AT THE HEARING ON DEFENDANTS’ MOTION
1 to sufficiently identify the facts or data upon which Mr. Johnson relied in reaching a
2 number of his conclusions. See Johnson Decl. ¶ 2-7. Mr. Johnson’s declaration fails
3 to satisfy the requirements for expert testimony and should be stricken.
4 II. Mr. Johnson’s Testimony Is Irrelevant To These Proceedings And Should
5 Be Stricken
6 In addition to striking the declaration because it contains inadmissible hearsay
7 and unqualified expert opinions, the Court should strike Mr. Johnson’s declaration
8 because the information he provides is irrelevant. Mr. Johnson’s declaration is
9 purportedly being offered to aid the Court in determining whether Defendants’
10 interpretation of the FCPA complies with the Convention. Opposition 32:15-20. The
11 Government contends this information is relevant because, pursuant to the Charming
12 Betsy doctrine, “an act of Congress ought never to be construed to violate the law of
13 nations if any other possible construction remains.” Opposition 28:23-25 (emphasis
14 added). 2 But the opinion of one employee of the Department of State, or even of the
15 Department of State as a whole, regarding the terms of the Convention and what the
16 treaty required of the United States, as well as the meaning of the FCPA, has no
17 bearing on the matter before the Court.
18 Evidence is relevant if it aids the trier of fact in making a factual determination.
19 Fed. R. Evid. 401 (“‘Relevant evidence’ means evidence having any tendency to make
20 the existence of any fact that is of consequence to the determination of the action more
21 probable or less probable.”). Determinations regarding the proper interpretation of the
22 law, including treaty provisions, are not factual in nature. Rather these determinations
23 are legal matters within the exclusive jurisdiction of the courts. Wang v. Masaitis, 416
24 F.3d 992, 998 (9th Cir. 2005) (holding that the judicial branch, rather than Congress
25 2
The Government misstates the principles outlined in Murray v. The Schooner
26 Charming Betsy, 6 U.S. (2 Cranch) 64, 2 L. Ed. 208 (1804). Charming Betsy is “not
an inviolable rule of general application, but a principle of interpretation that bears on
27 a limited range of cases.” Serra v. Lappin, 600 F.3d 1191, 1198 (9th Cir. 2010). As
discussed in Defendants’ reply, this is not such a case.
28
3
1 or the President, was endowed with the duty of interpreting constitutional provisions
2 (citing Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L. Ed. 60 (1803))); United
3 States v. Washington, 774 F.2d 1470, 1481 (9th Cir. 1985) (“Treaty interpretation is
4 the province of the courts”); Hopson v. Kreps, 622 F.2d 1375, 1380 (9th Cir. 1980)
5 (endorsing the government’s observation that “[i]t is the role of the judiciary to
6 interpret international treaties”).
7 Mr. Johnson’s declaration is not relevant for any purpose, but especially to
8 determining the consistency of the FCPA and the Convention, because this is a purely
9 legal determination that should be unaffected by any of the factual matters addressed
10 by Mr. Johnson’s declaration (e.g. the United States’ motivations in enacting the
11 Convention, the positions it has taken with respect to the Convention’s terms, its
12 efforts to amend the FCPA, or the alleged foreign policy ramifications of non-
13 compliance). See Johnson Decl. ¶¶ 2-7. Similarly, Mr. Johnson’s opinion that “the
14 United States would be out of compliance with… [the] Convention” if the Court
15 adopts Defendants’ interpretation of the term ‘foreign official’ constitutes an
16 impermissible legal conclusion and should be stricken. Opposition 32:18-19; See
17 Plush Lounge Las Vegas LLC v. Hotspur Resorts Nevada Inc., 371 Fed. Appx. 719,
18 720 (9th Cir. 2010) (striking expert declaration that “presented legal conclusions”);
19 Wang, 416 F.3d at 998. Mr. Johnson’s declaration is therefore irrelevant, as it does
20 nothing to aid the court in resolving the relevant issue raised by the Government’s
21 argument regarding the Charming Betsy doctrine: whether by law the FCPA must be
22 interpreted identically with the Convention.
23 Mr. Johnson’s testimony about the foreign policy implications associated with
24 not extending the FCPA to employees of state-owned entities is similarly irrelevant
25 (and misplaced). Contrary to Mr. Johnson’s suggestion, the United States has never
26 entirely adopted the requirements of the Convention. For example, the United States
27 excepts all facilitation payments, while the Convention criminalizes all but “small”
28 facilitation payments. See Hanna Decl. (Doc. No. 307), Exh. G (OECD’s Phase II
4
1 Report on the U.S.) at ¶ 114 (“The language in the FCPA, which excludes from the
2 definition of bribery those payments which are necessary to facilitate the performance
3 of routine administrative actions, is not limited to ‘small’ facilitation payments as in
4 the Convention”).3 Moreover, while Mr. Johnson asserts that if the FCPA excludes
5 payments to employees of state-owned enterprises the United States will be non-
6 compliant with the Convention, the Government has suggested there is at least one
7 alternative theory for prosecution of Defendants’ alleged conduct via the Travel Act.
8 Mr. Johnson’s prediction that there will be serious consequences to United States
9 foreign policy if the Court decides in favor of Defendants is also belied by the fact that
10 United States enforcement of the FCPA was minimal for over five years after it
11 adopted the Convention and no serious harm was done to United States’ relations with
12 its neighbors. Indeed, none of the Convention signatories have prosecuted foreign
13 bribery as aggressively as the United States. Dunbar Decl., Exh. E (OECD ANNUAL
14 REPORT 2010) at 17 (noting that 24 of 38 signatories have never sanctioned an
15 individual or company for violating foreign bribery laws). Even if the signatories had
16 any concerns, Congress can quickly remedy the situation by amending the FCPA if
17 that is its desire. Finally, despite Mr. Johnson’s assertions otherwise, the alleged
18 detrimental effects of excluding payments to employees of state-owned enterprises are
19 likely to be minimal because, as pointed out by Special Agent Smith, there are anti-
20 bribery provisions in many countries that apply to domestic commercial bribery
21 involving state owned-corporations that can be used to combat excesses by foreign
22 corporations. See Smith Declaration (Doc. No. 334) ¶ 7 (discussing the Chinese
23 Criminal Code provisions criminalizing payments to employees of state-owned and
24 privately-owned enterprises).
25
26
3
Facilitation payments are those payments intended “to expedite or to secure the
27 performance of a routine governmental action by a foreign official, political party, or
party official.” 15 U.S.C. § 78dd-1(b).
28
5
1 Mr. Johnson’s declaration also should not be relied upon to the extent it offers
2 excerpts from the text of the Convention. The full text of the Convention is already
3 before the Court. See Koehler Decl. (Doc. No. 305), Exh. 85 (OECD Convention).
4 Indeed, Mr. Johnson fails to identify all the relevant provisions of the Convention in
5 his declaration. For example, Mr. Johnson discusses Commentary 14 to the
6 Convention (which defines ‘public enterprises’), Johnson Decl. ¶ 4, but fails to
7 mention Commentary 15’s exception for enterprises that “operate[] on a normal
8 commercial basis in the relevant market” (which is an exception that is especially
9 relevant to Defendants’ position in this matter). Koehler Decl. (Doc. No. 305), Exh.
10 85 (OECD Convention) [hereinafter “OECD Convention”], Commentaries ¶ 15. Mr.
11 Johnson also fails to mention Article 5 of the Convention, which grants countries
12 leeway in determining the rules and principles governing prosecutions of the acts
13 covered under the Convention. See Koehler Decl. (Doc. No. 305), Exh. 85 (OECD
14 Convention), Article 5 (“Investigation and prosecution of bribery of a foreign public
15 official shall be subject to the applicable rules and principles of each Party.”). He
16 similarly ignores the fact that the United States has made clear its position that
17 political and economic considerations should not influence prosecutive decisions
18 under the FCPA. McCormick Decl. (Doc. No. 335), Exh. E (U.S. Response to OECD
19 Questions Concerning Phase I) ¶ 5.2 (“FCPA prosecution decisions are based on the
20 merits of the case, not political or economic considerations”).4 Finally, he omits any
21 discussion of the provisions of the Convention and the FCPA addressing facilitation
22 payments, which as discussed above, are relevant to demonstrating that the FCPA has
23 never criminalized all the conduct covered by the Convention. See OECD
24 Convention, Article 1 (establishing criminal liability for payments to foreign public
25 officials); OECD Convention, Commentaries ¶ 9 (excepting “small facilitation
26
4
To the extent Mr. Johnson’s declaration asserts that foreign policy considerations are
27 relevant to determining whether to prosecute payments to employees of state-owned
entities, it directly contravenes this provision.
28
6
1 payments”); 15 U.S.C. § 78dd-1(b) (excepting all facilitation payments). Given Mr.

2 Johnson’s incomplete description of the Convention, the Court should not rely on his
3 declaration for its terms.
4 III. If Mr. Johnson’s Declaration Is Accepted Into Evidence, Mr. Johnson
5 Should Be Required To Appear
6 Even though the Government submitted Mr. Johnson’s declaration and urges
7 this Court to rely on his testimony to deny the Motion to Dismiss, the Government has
8 not informed Defendants if Mr. Johnson will be available for cross-examination. See
9 Dunbar Decl. ¶ 7. If the Court accepts Mr. Johnson’s declaration into evidence,
10 Defendants request that the Court order that Mr. Johnson appear for cross-examination
11 at the hearing on Defendants’ Motion to Dismiss. See Local Rule Civ. Proc. 7-6
12 (“[T]he Court may, in its discretion, require or allow oral examination of any
13 declarant or any other witness.”); Local Rule Crim. Proc. 57-1.
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7
1 IV. Conclusion
2 For the reasons set forth above, Defendants respectfully request that the Court
3 grant Defendants’ Application to Strike the Declaration of Clifton M. Johnson.
4
5 DATED: May 2, 2011 Respectfully submitted,
6 SIDLEY AUSTIN LLP
7
By: S/Kimberly A. Dunne
8 Kimberly A. Dunne
9 Attorneys for Defendant HONG CARSON
10
11 GIBSON, DUNN & CRUTCHER LLP
12
By: S/Nicola T. Hanna
13 Nicola T. Hanna
14 Attorneys for Defendant STUART CARSON
15
16 BIENERT, MILLER, WEITZEL & KATZMAN PLC
17 By: S/Thomas H. Bienert, Jr.
Thomas H. Bienert, Jr.
18
Attorneys for Defendant PAUL COSGROVE
19
20
LAW OFFICES OF DAVID W. WIECHERT
21
22 By: S/David W. Wiechert
23 David W. Wiechert
Attorneys for Defendant DAVID EDMONDS
24
25
26
27
28
8
1 CERTIFICATE OF SERVICE
2 I hereby certify that on May 2, 2011, I electronically filed the foregoing EX
3 PARTE APPLICATION TO STRIKE DECLARATION OF CLIFTON M.
JOHNSON IN SUPPORT OF GOVERNMENT’S OPPOSITION TO
4
DEFENDANTS’ AMENDED MOTION TO DISMISS COUNTS ONE
5 THROUGH TEN OF THE INDICTMENT OR, IN THE ALTERNATIVE, FOR
6 AN ORDER REQUIRING MR. JOHNSON TO APPEAR AT THE HEARING
7 ON DEFENDANTS’ MOTION with the Clerk of the Court by using the CM/ECF
system, which will send a notice of electronic filing to the following:
8
Andrew Gentin — andrew.gentin@usdoj.gov
9
Douglas F. McCormick — USACAC.SACriminal@usdoj.gov,
10 doug.mccormick@usdoj.gov
11 Hank Bond Walther — hank.walther@usdoj.gov
12 Charles G. LaBella — charles.labella@usdoj.gov
13 Kimberly A. Dunne — kdunne@sidley.com
14 David W. Wiechert — dwiechert@aol.com
15 Thomas H. Bienert, Jr. — tbienert@ bmkattorneys.com
16 Kenneth M. Miller — kmiller@bmkattorneys.com
17 Teresa C. Alarcon — talarcon@ bmkattorneys.com
18 Marc S. Harris — mharris@scheperkim.com, vkirkland@scheperkim.com
19 Jean M. Nelson — jnelson@scheperkim.com
20
21 /s/Andrew J. Dunbar
Andrew J. Dunbar
22
23
24
25
26
27
28
LA1 2075192
PROOF OF SERVICE

Carson - Motion To Strike State Department Declaration

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Carson - Motion To Strike State Department Declaration

Uploaded by

Copyright:

Available Formats

Case 8:09-cr-00077-JVS Document 352 Filed 05/02/11 Page 1 of 12 Page ID #:5953

1 Kimberly A. Dunne (SBN 142721) kdunne@sidley.com

1 TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS

1 GIBSON, DUNN & CRUTCHER LLP

1 MEMORANDUM OF POINTS AND AUTHORITIES

1 I. Mr. Johnson’s Declaration Is Inadmissible

1 payments”); 15 U.S.C. § 78dd-1(b) (excepting all facilitation payments). Given Mr.

You might also like