Much has been made of Carol Lam’s favorable reputation in public corruption cases, and by all accounts – including off-the-record comments -- rightly so. Lam was recently characterized at a congressional hearing as the foremost prosecutor in the country in regard to public corruption. But it looks as though Lam’s office also moved forcefully against other powerful entities as well as against public officials.

On March 1, 2005, the U.S. Attorney’s office of the Southern District of California in San Diego – Lam’s office – announced that major military contractor Titan Corporation, based in California, had pled guilty to three felony counts.

Titan pled guilty to one felony count of Bribery under the Foreign Corrupt Practices Act (“FCPA”); one felony count of Falsification of Books and Records under the FCPA; and one felony count of Aiding or Assisting in the Filing of a False Tax Return.

According to the Information by the U.S. Attorney’s office, Titan had embarked on a project to build and operate a wireless telephone network in the small and poor nation of Benin, Africa, which would have paid Titan millions in management fees. To get the project, Titan hired an agent who claimed to have close ties to the President of Benin, and then through the agent paid more than $2 million towards the election campaign of the President, who is not alleged to have known about the corrupt payments.

“The FCPA requires issuers of publicly-traded securities to refrain from making corrupt payments to foreign government officials and candidates for foreign political office, and to implement policies and practices that reduce the risk that employees and agents will engage in bribery.”

Just in general, publicly traded corporations are also supposed to keep clean books:

“At the request of Titan, the Benin agent submitted false invoices to Titan totaling over $2 million for these funds, and Titan paid the bribes to the Benin agent in several installments between January 2001 and May 2001.”

Also, if you pay an illegal bribe to a foreign official or agent, you are not supposed to write off the expense in your tax filings:

“In addition, as outlined in the Information, Titan violated federal tax laws by claiming the bribes as deductible business expenses on its federal income tax return.”

Titan entered a plea agreement at the U.S. District Court in San Diego where Judge Roger T. Benitez sentenced Titan to pay a criminal fine of $13,000,000 on the FCPA anti-bribery count and to serve 3 years of supervised probation, running concurrently, on each of the 3 counts, to run concurrently. Titan was also ordered to institute a strict compliance program and internal controls to prevent future violations.

Titan paid a $13 million criminal fine in the case and another $15.4 million in disgorgement and prejudgment interest in a parallel civil case filed by the SEC in the District Court in Washington, D.C., a total of $28 million in criminal and civil penalties.

The principals involved in the investigation announced the penalties at a press conference where Lam stated, “Titan’s payment of the largest combined FCPA criminal and civil penalty in history demonstrates both the severity and scope of the misconduct in this case. All United States companies should take note that attempting to bribe foreign officials is criminal conduct and will be appropriately prosecuted.” Lam also noted that the investigation would continue.

The FBI Special Agent in Charge, Daniel R. Dzwilewski, said, “Titan admitted corruptly making payments intended to influence the outcome of the election in Benin. Titan’s egregious acts warranted the use of this particular measure and should send a clear message that corporations will be held accountable both criminally and civilly for their actions, not only within the confines of the United States, but also their dealings in foreign countries.”

The DCIS agent, Rick W. Gwin, stated, “Titan is a major Department of Defense contractor, and is commonly referred to as a ‘Top 100 Defense Contractor,’ with annual sales to the Department of Defense of over $1 billion. This plea demonstrates the Department of Defense’s commitment to ensuring that its contracting parties play by the rules.”

Given how much of that commitment we’ve seen from the White House, 2005 through now, one might wonder whether the law enforcement coup achieved by Lam’s office was viewed with unmixed joy in the administration.