Eric Grannon, Partner, White & Case LLP; Washington Legal Foundation Legal Policy Advisory Board Member
A troubling trend has developed in white-collar crime cases where prosecutors either (i) use leverage outside of the case—that is, not based on the merits of the evidence—to secure a conviction, or (ii) stretch the traditional elements of criminal law to secure a conviction. One breathtaking example of both tactics is the so-called “Memorandum of Understanding” between the Antitrust Division of the Department of Justice and the former Immigration and Naturalization Service (or what is now known as ICE, the Immigration and Customs Enforcement division of the Department of Homeland Security). In this Memorandum of Understanding (or “MoU”) the government says that it: “Considers criminal violations of the Sherman Act . . . to be crimes involving moral turpitude, which may subject an alien to exclusion or deportation from the United States.”
Conspicuously, the overwhelming majority of DOJ antitrust convictions are obtained against non-U.S. executives—and every single one of these convictions has been by plea agreement rather than trial. Why? Because if the defendant pleads guilty, the government agrees to waive application of the MoU, so the person can travel freely to the United States after serving his sentence.
For these non-U.S. executives, it is the threat of this U.S. travel ban—rather than concern about the strength of the government’s antitrust evidence—that drives the defendant to plead guilty. For example, even if the defendant were to go to trial and be convicted, he could very well be sentenced to less than the 3 or 4 years that DOJ has recently demanded in plea bargains with antitrust defendants, particularly because most of these defendants have no prior criminal record. But if the defendant goes to trial and loses—even if he were sentenced to only one year—he would still face the 15-year minimum ban on travel to the United States as a result of the MoU, which for many executives would be a career killer.
No legal basis whatsoever exists supporting the government’s declaration that Sherman Act violations are crimes involving moral turpitude. The prevailing case law on this issue in fact strongly weighs against that conclusion. Crimes involving moral turpitude are typically crimes that existed at common law involving depraved conduct or fraud, such as murder or grand theft. Sherman Act offenses, of course, are entirely a creature of statute and did not exist at common law. Even statutory rape, for example, recently has been held by the Ninth Circuit not to constitute a crime involving moral turpitude because the offense derives entirely from statute (that is, of course, when the common-law elements of rape are not met).
So it seems far-fetched to suppose that antitrust violations are actually crimes involving moral turpitude. Even within the Department of Justice, the Bureau of Justice Statistics disagrees with the Antitrust Division, labeling antitrust violations mere “regulatory offenses.” Furthermore, even though the European Commission pursues billions of Euros in antitrust fines against companies every year, the Commission does not have a criminal antitrust offense, which also suggests that antitrust violations are not crimes involving moral turpitude.
Convictions by plea agreement pursuant to the MoU are textbook examples of prosecutorial leveraging beyond the facts of the case as well as prosecutorial manipulation of the traditional elements of criminal law. If the United States persists in this treatment of non-U.S. executives, it may be only a matter of time before we invite reciprocal targeting of U.S. executives abroad.
The full text of the Memorandum of Understanding can be viewed here.