After six years, the indictment was dismissed because of President Trump’s direction that the DOJ tighten up guidelines for FCPA prosecutions.

In one of her first official acts after President Trump appointed her as the acting United States attorney for New Jersey, Alina Habba asked a federal judge to dismiss the indictment charging two Cognizant executives with having paid a $2 million bribe to an Indian official, an alleged violation of the Foreign Corrupt Practices Act (FCPA).

Yesterday, Judge Michael Farbiarz granted the request.

With the trial scheduled to begin Monday, April 7, Habba advised Judge Farbiarz (a Biden appointee) two days ago that the government was dropping the case against defendants Gordon Coburn and Steven Schwartz as a result of the president’s February 10 executive order. That EO directed Attorney General Pamela Bondi to pause FCPA prosecutions for six months, with tighter DOJ enforcement guidelines to be crafted during that time.

While the media were quick to accuse Trump of green-lighting the bribery of foreign governments, there is  — as usual — more to it than that. After his experience as a lawfare defendant, Trump has become especially sensitive to elastic statutes that he believes (with justification) creative prosecutors stretch to cover factual scenarios that Congress did not intend to criminalize. (Trump, for example, was charged in Biden DOJ special counsel Jack Smith’s 2020 election interference case with violating a civil rights law originally meant to criminalize the menacing of black Americans to prevent them from voting.)

Cognizant is an international IT-consulting company that operates mainly in the U.S. and India. In 2019, the Trump 45 Justice Department charged two of its executives, Coburn and Schwartz, with causing a construction company to pay government officials in India a $2 million bribe to obtain a permit necessary to open a new office campus. The executives then allegedly caused Cognizant to reimburse the construction company through payments that were camouflaged by phony invoices. This was said to violate the FCPA (Title 15, U.S. Code, §§ 78dd-1, et seq.), which makes it a crime to pay foreign officials to influence their government for the purpose of “obtaining or retaining business.”

Trump’s EO asserts that, since its 1977 enactment, the FCPA has been “systematically, and to a steadily increasing degree, stretched beyond proper bounds and abused” by federal prosecutors. He has a point — although his conclusion that such contortions harm American interests and impede the president’s conduct of foreign policy seems overblown.

The statute was not meant to cover all kinds of payments businesses make to officials of foreign governments (including corrupt regimes, the bribery of which is a cost of doing business). It narrowly targeted payments made to government officials to obtain or retain business contracts. As detailed in this useful post by law professor Mike Koehler (who blogs as “FCPA Professor”), a House report on the bill stressed that “the bill’s coverage does not extend to so-called grease or facilitating payments,” nor does it “reach payments made to secure permits, licenses, or the expeditious performance of similar duties” (emphasis added).

At root, the Cognizant case payment, while unsavory, was for the purpose of securing a permit. Consequently, advocates for the indicted execs argue that it is an example of the Justice Department’s exploiting the looseness of statutory text to capture conduct Congress not only didn’t contemplate covering but actually considered and rejected. Criminal statutes are supposed to be sufficiently clear that a person of average intelligence can grasp what conduct is prohibited.

Of course, proponents of the prosecution (and, I’d bet, the prosecutors who’ve spent years getting the case ready for the now-canceled trial) would counter that the statutory language is very clear and that the bribe in this instance fits within it. Courts, moreover, should not resort to congressional committee reports or other legislative history to override statutory text.

The prosecution of the Cognizant execs has a long, tortured history. But the case was finally poised to go to trial, with the judge having rejected a request by Habba’s predecessor, acting U.S. attorney John Giordano, for a lengthy delay while the Justice Department developed new prosecutorial guidelines, as the EO directs. Obviously, that is why Habba acted, after consulting with AG Bondi’s office. Judge Farbiarz, who had told the government to either be ready for trial on Monday or file a motion to dismiss, quickly granted the latter when Habba submitted it.