U.S. v. Stuart Carson el al. (Declaration of Professor Michael Koehler)

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Case 8:09-cr-00077-JVS Document 305

Filed 02/21/11 Page 1 of 152 Page ID #:2836

1 NICOLA T. HANNA, SBN 130694, nhanna@gibsondunn.com 2 3161 Michelson Drive, Suite 1200

GIBSON, DUNN & CRUTCHER LLP Irvine, CA 92612

3 Telephone: (949) 451-3800 / Facsimile: (949) 451-4220 4

Attorneys for Defendant STUART CARSON 555 W. Fifth Street, Suite 4000

5 SIDLEY AUSTIN LLP

KIMBERLY A. DUNNE, SBN 142721, kdunne@sidley.com Telephone: (213) 896-6000 / Facsimile: (213) 896-6600 BIENERT, MILLER & KATZMAN, PLC San Clemente, CA 92673

6 Los Angeles, CA 90013-1010

7 Attorneys for Defendant HONG CARSON

8 THOMAS H. BIENERT, JR., SBN 135311, tbienert@bmkattorneys.com 9 903 Calle Amanecer, Suite 350

10 Telephone: (949) 369-3700 / Facsimile: (949) 369-3701 11

Attorneys for Defendant PAUL COSGROVE 115 Avenida Miramar

12 LAW OFFICES OF DAVID W. WIECHERT 13 San Clemente, CA 92672

DAVID W. WIECHERT, SBN 94607, dwiechert@aol.com Telephone: (949) 361-2822 / Facsimile: (949) 496-6753 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION CASE NO. SA CR 09-00077-JVS DECLARATION OF PROFESSOR MICHAEL J. KOEHLER IN SUPPORT OF DEFENDANTS MOTION TO DISMISS COUNTS ONE THROUGH TEN OF THE INDICTMENT Hearing Date: March 21, 2011 Time: 8:00 A.M. Courtroom: 10C Trial Date: October 4, 2011 The Honorable James V. Selna

14 Attorneys for Defendant DAVID EDMONDS 15 16 17

18 UNITED STATES OF AMERICA, 19 20 21 22 23 24 25 26 27 28

Plaintiff, v. STUART CARSON, et al., Defendants.

Case 8:09-cr-00077-JVS Document 305

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TABLE OF CONTENTS Page BACKGROUND AND ISSUE CONSIDERED..................................................1 OVERVIEW OF OBSERVATIONS ...................................................................4 STRUCTURE OF DECLARATION ...................................................................8 LEGISLATIVE HISTORY RELEVANT TO ENACTMENT OF THE FCPA IN 1977 ....................................................................................................10 A. Hearings Before the Subcommittee on Multinational Corporations, United States Senate, 94th Congress, First Session (May 16 and 19; June 9 and 10; July 16 and 17; and September 12, 1975) (Political Contributions to Foreign Governments Hearings) ...............10 H.R. 7539 (Introduced June 3, 1975).......................................................12 Hearings Before the Subcommittee on International Economic Policy, House of Representatives, 94th Congress, First Session (June 5, July 17, 24, 29, September 11, 18 and 30, 1975) (the International Economic Policy Hearings) ............................................12 Hearings Before the Committee on Banking, Housing and Urban Affairs, United States Senate, 94th Congress, First Session (August 25, 1975) (the Lockheed Hearing)..........................................18 S. Res. 265 (Introduced September 25, 1975) .........................................21 Hearings Before the Subcommittee on International Trade of the Committee on Finance, United States Senate, 94th Congress, First Session (October 6, 1975) (the Trade Abroad Hearings) .....................22 Hearings Before the Subcommittee on Priorities and Economy in Government of the Joint Economic Committee, 94th Congress, First and Second Session (January 14 and 15, March 2 and 5, 1976) (the Abuses of Corporate Power hearings) ................................23 H.R. 11987 (Introduced February 19, 1976)............................................24 S. 3133 (Introduced March 11, 1976) ......................................................25 S. 3150 (Introduced March 16, 1976) ......................................................26i

II. III.

7 IV. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

B. C.

D.

E. F.

G.

H. I. J.

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K. L.

President Ford Establishes the Task Force on Questionable Corporate Payments Abroad (March 31, 1976) .......................................26 Hearings Before the Committee on Banking, Housing and Urban Affairs, United States Senate, 94th Congress, Second Session (April 5, 7 and 8, 1976) (the Foreign and Corporate Bribes Hearings) ................................................................................................27 S. 3379 (Introduced May 5, 1976) ...........................................................32 S. 3418 (Introduced May 12, 1976) .........................................................33 Report of the Securities and Exchange Commission on Questionable and Illegal Corporate Payments and Practices (May 12, 1976) (the SEC Report) .................................................................34 Hearings Before the Committee on Banking, Housing and Urban Affairs, United States Senate, 94th Congress, Second Session (May 18, 1976) (the Prohibiting Bribes to Foreign Officials Hearing) ..................................................................................................39 H.R. 13870 (Introduced May 18, 1976)...................................................41 H.R. 13953 (Introduced May 21, 1976)..................................................42 H.R. 14340 (Introduced June 11, 1976)...................................................42 Secretary Richardsons Letter to Senator Proxmire Regarding S. 3133 (June 11, 1976) (Secretary Richardsons Letter).........................43 President Fords Remarks Regarding Questionable Corporate Payments Abroad (June 14, 1976) ...........................................................45 H.R. 14358 (Introduced June 14, 1976)...................................................46 H.R. 14681 (Introduced July 1, 1976) .....................................................46 S. 3664 (Introduced July 2, 1976)............................................................47 Senate Report No. 94-1031 as to S. 3664 (July 2, 1976).........................48 President Fords Message Urging Enactment of Proposed Legislation to Require the Disclosure of Payments to Foreign Officials (August 3, 1976)........................................................................51

M. N. O.

P.

Q. R. S. T. U. V. W. X. Y. Z.

ii

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AA. Secretary Richardsons Statement on the Proposed Foreign Payments Disclosure Act (August 3, 1976) .............................................52 BB. S. 3741 (Introduced August 6, 1976).......................................................53 CC. H.R. 15149 (Introduced August 10, 1976)...............................................53 DD. H.R. 15481 (Introduced September 8, 1976) ...........................................54 EE. FF. Senate Passes S. 3664 (September 15, 1976)...........................................55 Hearings Before the Subcommittee on Consumer Protection, House of Representatives, 94th Congress, Second Session (September 21 and 22, 1976) (the Foreign Payments Disclosure Hearings) ................................................................................................55

GG. 1976 Elections ..........................................................................................60 HH. H.R. 1602 (Introduced January 10, 1977)................................................60 II. JJ. S. 305 (Introduced January 18, 1977) ......................................................62 H.R. 3815 (Introduced February 22, 1977)..............................................63

KK. Hearings Before the Committee on Banking, Housing, and Urban Affairs, United States Senate, 95th Congress, First Session (March 16, 1977) (the Foreign Corrupt Practices and Domestic and Foreign Investment Disclosure Hearing) ...............................................64 LL. Markup Session S. 305 (April 6, 1977) ...................................................68

MM. Hearings Before the Subcommittee on Consumer Protection and Finance, House of Representatives, 95th Congress, First Session (April 20 and 21, 1977) (the Unlawful Corporate Payments Act Hearings) ................................................................................................69 NN. Senate Report No. 95-114 as to S. 305 (May 2, 1977) ............................76 OO. H.R. 7543 (Introduced June 1, 1977).......................................................79 PP. Corporate Business Practices and United States Foreign Policy, Hearing Before the Subcommittee on International Economic Policy and Trade, 95th Congress, 1st Session (September 7, 1977) (the Corporate Business Practices Hearing) .........................................80

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QQ. House Report No. 95-640 as to H.R. 3815 (September 28, 1977) ..........82 RR. House Passes H.R. 3815 (November 1, 1977) ........................................85 SS. TT. Conference Report....................................................................................89 President Carter Signs S. 305...................................................................94

UU. The Foreign Corrupt Practices Act of 1977 (Public Law 95-213) ..........94 LEGISLATIVE HISTORY RELEVANT TO THE FCPAS 1988 AMENDMENTS ................................................................................................96 A. B. C. S. 2763 and Related Bills (96th-97th Congresse