A former Alstom executive’s controversial book about his foreign bribery prosecution in the US has become a best-seller in China. His account is packed with tart observations about prosecutors and defence lawyers.
Frédéric Pierucci’s “The American Trap: My Battle to Expose America’s Secret Economic War Against the Rest of the World” (“Le Piège Américain,” in its original French) details the former Alstom executive’s journey through the US criminal justice system from his arrest at a New York airport in 2013. Pierucci spent over two years in prison for authorising bribes to Indonesian officials, a violation of the Foreign Corrupt Practices Act.
The former executive at French engineering company Alstom unspools many gripes over his prosecution, including his view that the US uses the FCPA as an economic weapon. Pierucci theorises that prosecutors helped US conglomerate General Electric secure its 2015 purchase of Alstom’s power and grid business by holding the pending foreign bribery settlement over the French company in Damoclean fashion.
But FCPA unit chief Dan Kahn (now senior deputy chief of the fraud section) told the BBC: "We certainly didn't force Alstom to plead guilty in order to help out GE. That never entered into consideration.”
Pierucci sees himself as a pawn who was used by prosecutors to encourage Alstom to cooperate with the investigation. Alstom settled with the Department of Justice in 2014 for $772 million – the largest-ever FCPA penalty at the time. The company pleaded guilty in a broad scheme to pay tens of millions of dollars in bribes in Indonesia, Saudi Arabia, Egypt and the Bahamas.
In “The American Trap”, Pierucci recounts his quarrels with Alstom-appointed defence lawyers and detailed interviews with prosecutors.
“You’re not going to rewrite American law”
Pierucci unveils his interactions with his lawyers: Stan Twardy, a partner at Day Pitney and a former US attorney for the District of Connecticut; and Liz Latif, a former Day Pitney partner turned solo-practitioner.
Pierucci described Twardy as appearing strong and competent with a “Hollywood smile”, but he sniffed at Latif’s youth and purported “lack of experience” in FCPA matters.
The book details a series of disagreements between Pierucci and his lawyers, one of which he says left Latif “red and ready to explode”. Pierucci was pushing back on what he saw as preposterous sentencing guidelines when Latif told him: “You’re not going to rewrite American law,” the book says.
Pierucci also describes doubts he had about his lawyers’ allegiance to his defence as they were former prosecutors. Pierucci recounts that his cellmate – a former player in the French Connection drug ring – advised him to “never trust” his lawyers because they may be too aligned with the DOJ. Pierucci was imprisoned in Wyatt Detention Facility, a high-security prison in Rhode Island.
Pierucci’s suspicions brew throughout “The American Trap”; he said he wondered “if lawyers, judges [and] prosecutors are not all united by the same ‘commercial’ links”. He also said he was “under surveillance” by Alstom, and said he felt rattled when one of the company’s lawyers from Squire Patton Boggs observed him at a court hearing.
Pierucci complained that another former Alstom executive, Lawrence Hoskins, appeared to have had better representation. Pierucci said Hoskins’ Clifford Chance lawyers helped Hoskins avoid a guilty plea because they knew more about the FCPA than his counsel did.
Hoskins, who has denied related charges, is heading for a September trial in federal court in Connecticut. In a July filing, Hoskins's counsel Christopher Morvillo criticised the book for what he called “numerous false and misleading characterizations”. But in an email to GIR, Pierucci questioned the firm's impartiality, because it represented GE against him in a labour lawsuit he brought in France.
Pierucci says in the book that he was advised to plead guilty, but his decision to do so was tortured.
Lamenting that it would take him almost 70 years to read all of the documents prosecutors produced in his case, he argued prosecutors know time is in their favour and “intentionally drown” defendants in paper.
But the clock was ticking for Pierucci, and the pressure was on. Pierucci’s lawyers warned him that he would lose his value to prosecutors trying to build their case if he didn’t plead guilty before another Alstom employee, the book says.
Pierucci, who called the situation “diabolical”, explained his bind: Alstom would stop paying his legal fees if he pleaded guilty, but going to trial could lead to a substantial prison sentence.
“Are you serious?” he asked his lawyers.
A "fly stuck in glue"
Pierucci describes meetings with Dan Kahn, who was then a line prosecutor; and David Novick, a prosecutor in the Connecticut US attorney’s office.
Kahn impressed Pierucci as “young, ambitious and brilliant”. During their first brief meeting, every word Kahn spoke made Pierucci feel like “an unfortunate fly stuck in glue”, the book says.
Kahn and Novick didn’t ask him any questions initially, Pierucci wrote, but seemed mainly to want to “flex their muscles”.
When Kahn and Novick met again with Pierucci, the interview did not get off to a good start, according to the book. Pierucci’s responses were not what the prosecutors were expecting, the book says, and they eventually took a break to give him “some time to reflect”.
Pierucci says Twardy advised him to tell prosecutors what they want to hear and “stop beating about the bush” regarding the bribery scheme, according to the book. After Pierucci heeded his lawyer’s advice, Novick and Kahn were “over the moon”, he wrote.
At the next interview prosecutors asked “extraordinarily precise” questions, Pierucci wrote, including: “Why does this person call their correspondent ‘friend’? Have you met this person? If so, when? And who was with you? Did you use consultants for this business? If so, who? With what remuneration? And what were the terms of the payment?”
Pierucci’s fortunes took another bad turn when his lawyer informed him his request for conditional release would be denied. The book says Twardy had reached a gentleman’s agreement with Novick, the assistant US attorney, that Pierucci would be released after six months. But “orders came from Washington, from Kahn” that he stay in prison for another few months, Pierucci wrote.
Twardy told Pierucci he was “furious” that Kahn had reneged on their verbal agreement, the book says, apparently stunned by such perfidy. Twardy theorised that Kahn’s reversal could be related to Alstom’s DOJ settlement negotiations, according to the book.
A transcript of Pierucci's plea hearing in 2013, however, contradicts the book's account. The presiding judge asked Pierucci whether anyone had made promises to him that caused him to plead guilty. "No, your honour," Pierucci said. The federal judge asked whether anyone had made any promises about his sentence, and again the Frenchman said no.
Pierucci ended up serving approximately two years of a 30-month sentence.
A surprising audience
The French book has quickly become a best-seller in a country mindful of US enforcement: China. The book was recently translated into Mandarin and benefited from a promotion after it was spotted on the desk of Huawei founder Ren Zhengfei.
Chinese readers have discerned similarities between the Alstom case and US-China tensions over tech giant Huawei.
The December arrest in Canada of Zhengfei’s daughter, Meng Wanzhou, the company’s CFO, has sparked suspicions in China that the US is using criminal law for economic purposes. Meng is accused of helping Huawei evade sanctions on Iran; the US is seeking her extradition. She denies wrongdoing. The US considers Huawei an economic and national security threat.
Pierucci recently told China’s state-run news agency Xinhua that the book describes his “descent into hell”, and shows how in his view the DOJ used him to shake-down Alstom through the FCPA settlement – hobbling the company so General Electric could purchase it on more favorable terms.
Readers with concerns about the US’s wide jurisdictional net are undoubtedly taking note of Pierucci’s encounters with prosecutors.
Twardy declined to comment, saying he does not discuss advice he gives to clients. Latif did not respond to requests for comment.
The book, meanwhile, is slated to be translated into English. It is advertised for sale in the United States in March.
- James Thomas contributed to this report.