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The biggest Foreign Corrupt Practices Act prosecution of all time, United States v. Giffen, just fizzled out. The Associated Press reports:
A businessman once accused of paying tens of millions of dollars in bribes to officials in Kazakhstan pleaded guilty Friday to a misdemeanor tax count.
James H. Giffen, 69, left U.S. District Court in Manhattan smiling after his $10 million bail was reduced to $250,000. He pleaded guilty to failing to note on his U.S. taxes that he controlled a bank account in Switzerland. He faces up to a year in prison and a $25,000 fine at his November sentencing. However, Giffen’s small New York merchant bank pleaded guilty to violating the Foreign Corrupt Practices Act. It admitted trying to influence Kazakhstan officials to favor it in contracts by sending two snowmobiles worth a total of $16,000 to a senior Kazakhstan official as a New Year’s gift in 1999. The bank can be fined $2 million or twice the gain or loss that resulted from the crime.
The outcome is a huge embarrassment to federal prosecutors, who had invested a decade in resources in the effort to convict Giffen of FCPA and related violations. The guilty plea arrangement involves a misdemeanor offense for which jail time is not unheard of but still unusual.
The Giffen case has been the focus of political manipulation concerns for years. In a July 2001 feature, “The Price of Oil,” Seymour Hersh documented the wrangling by the Kazakh and American governments that surrounded the criminal investigation. The New York Times’s Jeff Gerth subsequently reported that former Vice President Dick Cheney was involved in efforts to appease Kazakh concerns about the case. Afterwards, prosecutors on the case found themselves suddenly stripped of resources, and it lumbered along agonizingly as Giffen perfected a classic “graymail” defense—arguing that he was collaborating with the American intelligence community in all his dealings, and the U.S. government had approved. As the case approached trial, another stunner emerged: the CIA acknowledged that it had failed to turn over all of its documents relating to the case. With the prosecution sabotaged from within the government, prosecutors have been forced to accept a fig-leaf of a settlement from Giffen.
Kazakhs have long claimed that their government’s strategy of resolving the Giffen case by using the right levers with the American administration–a process that led them to hire former attorneys general and high-profile retired prosecutors, private investigators, and public-relations experts–would be successful. The outcome in the Giffen case appears to ratify that view. The notion of an independent, politically insulated criminal-justice administration in America has just taken another severe hit.
More from Scott Horton:
Conversation — August 5, 2016, 12:08 pm
Sidney Blumenthal on the origins of the Republican Party, the fallout from Clinton’s emails, and his new biography of Abraham Lincoln
Conversation — March 30, 2016, 3:44 pm
Joseph Hickman discusses his new book, The Burn Pits, which tells the story of thousands of U.S. soldiers who, after returning from Iraq and Afghanistan, have developed rare cancers and respiratory diseases.
Years ago, I lived in Montana, a land of purple sunsets, clear streams, and snowflakes the size of silver dollars drifting through the cold air. There were no speed limits and you could legally drive drunk. My small apartment in Missoula had little privacy. In order to write, I rented an off-season fishing cabin on Rock Creek, a one-room place with a bed and a bureau. I lacked the budget for a desk. My idea was to remove a sliding door from a closet in my apartment and place it over a couple of hastily cobbled-together sawhorses.
Amount the inventor of the yellow “smiley face” had received for it by the time of his death in April:
An astrophysicist observed that the early universe looked like vegetable soup.
In North Korea, a missile capable of striking U.S. bases overseas blew up immediately after a test launch, and in North Carolina, a G.O.P. headquarters was firebombed.
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“Matt was happy enough to sustain himself on the detritus of a world he saw as careening toward self-destruction, and equally happy to scam a government he despised. 'I’m glad everyone’s so wasteful,' he told me. 'It supports my lifestyle.'”