On Monday, January 16, 2012, Judge Lynn Hughes granted defendant John O’Shea’s motion for acquittal in the FCPA case, dismissing the FCPA charges case against him. According to a Press Release from defense counsel, Judge Lynn Hughes "found that the Government’s chief witness, … could not tie Mr. O’Shea to the alleged crimes. The judge found that O’Shea’s conduct, including efforts to renew an ABB-Esimex contract, was reasonably explained by lawful motives." The decision by Judge Hughes marks the second loss in less than two months for the Government in cases related to the Comisión Federal de Electricidad ("CFE") – Judge A, Howard Matz had previously vacated the guilty verdict in the Lindsey Manufacturing case, as discussed here. UPDATED (on January 19, 2012): While Judge Hughes’ Order dismisses the 12 FCPA counts, the Judge has scheduled a status conference for the remaining counts (conspiracy, money laundering and creating a false document) for January 20, 2012.
Mr. O’Shea was indicted in November 2009 on one count of conspiring to violate the FCPA, twelve counts of violating the FCPA, four counts of money laundering and one count of creating a false document to obstruct the Government’s investigation. Specifically, the Indictment alleges that Mr. O’Shea, while serving as the General Manager for Sugar Land, the Texas business unit of ABB, Inc., a U.S. subsidiary of Swiss corporation ABB, Ltd., arranged and authorized payments through a Mexican sales agent, Esimex, to multiple officials at the CFE, an electric utility company owned by the government of Mexico, in exchange for contracts to provide products and services to CFE.
In March 2011, Mr. O’Shea moved to dismiss the Indictment, arguing that, because the CFE was a state-owned company, its employees did not fall under the definition of a "foreign official." As discussed here, in a Management Order entered on January 3, 2012, Judge Hughes denied Mr. O’Shea’s Motion to Dismiss in a single sentence, without explanation.
The trial began on January 11, 2012. During the Government’s Case-in-Chief, the prosecutors, did not call as a witness Fernando Basurto, Sr. (the President of Esimex, a Mexican sales agent, whom had been granted immunity), but called his son as witness instead. According to the defense team, Judge Hughes "expressed concern that the Government had granted immunity" Mr. Basurto, Sr., "allowing him to disclose selective information to the Government, while refusing to grant immunity to an important defense witness even six to seven years after the facts at issue."
Defense counsel Joel Androphy of Berg & Androphy said it was unfair to deflect "blame for bribery in corruption-ridden countries unto unknowing business executives," and hoped that Mr. O’Shea’s acquiital "will encourage others wrongfully accused under the FCPA to fight the charges against them."
